A new report from IBEC shows the Irish economy is well in recovery mode with confident consumers spending again.
In its latest economic outlook, the business group says that although unemployment is still too high the government can afford to make a lower fiscal adjustment in next years budget of €200 million - and not €2 billion.
Adopting this lower amount would mean 10,000 additional people at work in 2015, IBEC says.
The body has increased this years GDP forecast from 2.9% to 3.1% - up from 2.9% - following stronger than expected exports.
It has also significantly revised up its 2015 GDP forecast from 3.1% to 3.9% on the basis that a lower fiscal adjustment is now required.
In its recommendations for Budget 2015, it says that less austerity is needed. "Ireland is required to reach a 2.9% budget deficit target in 2015, but IBEC believes that a prudent approach would be to target a 2.7% deficit" it says.
"Crucially, this will support Ireland's reputation and credibility in the international financial markets. The 2.7% target can be reached with a net fiscal adjustment of just €200 million".
It is also calling for cuts to income and consumer taxes as well as increasing the entry point to the marginal tax rate from €32,800 to €34,800, reducing the marginal tax rate from 52% to 51% and drop the pensions levy.
Head of policy and chief economist with IBEC is Fergal O'Brien.
