Colm McCarthy, lecturer in economics at UCD and chair of the committee that advised the Government on fiscal cuts last year, said elements of the so-called 'Bord Snip' report may need to be revisited.
Speaking on RTÉ's News at One programme, Mr McCarthy said it is not conceivable to balance the books in the next Budget without increasing or introducing taxes as the base of Government revenue is "too narrow".
He said politicians would have to start looking at things they don’t like to contemplate, such as the introduction of water rates.
“This notion that water is free because it falls out of the sky - we’re going to have to get over that. It’s very expensive to provide the residential water supply in Ireland and we pay for our other utilities.”
He also said residential property taxes need to be introduced, a view he said was shared by many politicians.
“I don’t know a politician who won’t agree privately that scrapping rates back in 1978 was a mistake and did no good to the local government system," he said. “Nobody wants to get up front and say 'vote for me I’m going to bring back rates'.”
Mr McCarthy added that in the interest of sharing the burden, State and public service pensions need to be looked at. “One group in Ireland that hasn’t done so badly are state pensioners and public service pensioners. It seems to me it’s reasonable if you believe the burden has to be shared, well there’s a group that hasn’t joined in yet.”
Mr McCarthy said while he would be against it, the Government could extend the tax net to the lower end of the income distribution.
“Personally, I think it would be a pity to do that…if it is done there are ways to try and minimise the adverse incentive effects.”
And he said the country needs to be “cute” about indirect tax rates. “Clearly you’ve got to have one eye on what’s going on in Northern Ireland and one of the things that’s going to happen is that their VAT rate is going to go up in January.”
Mr McCarthy also said that one of the features of the current fiscal situation, which started in July 2008, is that the country has “hardly had a lucky break” in that time.