FIANNA Fail leader Mr Bertie Ahern has urged a fundamental change in the planning of the public finances.

Speaking at a lunch hosted by the Irish Business and Employers Conference in Dublin yesterday, Mr Ahern said the central priorities must be to control expenditure and lower public indebtedness to ensure that the tax burden can be eased.

"Lower taxation, and reforms to its structure, will be essential to provide a greater incentive for enterprise and job creation, according to Mr Ahern. To maintain competitiveness, he stressed that Ireland must move to eliminate the current budget deficit and lower the overall level of borrowing.

"Public spending has to be held back for at least a couple of years, so that we can firmly establish a new economic equilibrium. To achieve a significant proportional shift of resources from the public to the private sector requires a steady reduction in the tax burden," he said.

Fiannn Fail is currently preparing "practical" and "innovative" new policies for the economy, he said, which would be presented in its election manifesto.