Ireland will need to have some "pretty tough conversations" on how to fund services going forward.
That's according to IBEC's Fergal O'Brien, who was speaking as the Central Bank says the Irish economy will continue to grow strongly in the coming years.
It says the economy looks set to grow by just over 7% this year, over 5% next year and just under 5% in 2024.
It expects to see unemployment fall to 5.8% this year and return to pre-pandemic levels by 2024.
Mr O'Brien, director of lobbying and influence at IBEC, told The Hard Shoulder the economy needs a safety net.
"Economically Ireland has been fortunate, we've had a really strong COVID.
"Even before the restrictions were lifted, the labour market was very buoyant.
"Last year we'd a 20% increase in our income taxes; and we can see that, very quickly, we're probably going to have 2.5 million people at work in the country.
"So we're going to need a lot of public services, we're going to have to address a lot of quality of life issues."
Apartment buildings on the north wall of Dublin's Docklands in July 2009. Picture by: Radharc Images / Alamy Stock PhotoHe says the public sector has to be a position to keep up with demand.
"You're going to need both a propionate public sector, but also a high quality public sector, to make sure that we can deliver those services.
"I think the key question for us is how are we going to fund the expectations for the State going forward?
"I think it is a long-term question and debate for us in terms of what's the expectation now post-COVID, given the things that we actually did really well during the COVID crisis."
Referring back to lessons learned from the economic crash in the early 2000s, he believes we need to remember this going forward.
"To have that kind of safety net structure for future crisis, to fund the services and the quality of infrastructure that we know we need to make Ireland to be a great place to live and work - we're going to have to fund the State.
"And we're probably going to have some pretty tough conversations actually as to how we do that, and how we raise the kind of necessary revenue going forward to make sure we need to be competitive.
"But we do need world-class public services and world-class infrastructure, and we don't have those now".
And he says a demographic 'dividend' of a younger population will eventually level out.
"Unfortunately we're all going to have to get older, and we're all going to have to be provided for in our old age.
"We will ultimately have to move to a different kind of spend/tax revenue model, I think that's inevitable".
