Tánaiste Joan Burton has said the recovery in the public finances means the Government can now make plans to long-term investment in education and roads in addition to mooted income tax concessions.

After new exchequer figures showed a big increase in tax returns last month, Ms Burton said other indicators pointed to a nascent recovery in consumer sentiment and improved prospects for the tourism industry.

“Without a doubt there is a surge in consumer confidence,” she said. “For everybody who has been at work – taken tax hikes, taken pay cuts – it’s possible now to see a route to restoration.”

The Tánaiste was speaking to The Irish Times before the release on Wednesday of fresh live register figures, which are set to put the February unemployment rate just above 10 per cent as people return to work.

A new set of exchequer returns showed the State collected €6.74 billion in tax in January and February, €925 million more than in 2014 and €345 million ahead of the target set in the October budget.

Figures distorted

While the figures showed the exchequer deficit declined to €205 million at the end of February from €1.68 billion a year ago, the 2014 figures were distorted by once-off changes last year to Europe’s payment systems.

Conall MacCoille, economist at Davy stockbrokers, said the returns provided tentative evidence to suggest the Government could beat its target for a budget deficit this year of 2.7 per cent of gross domestic product.

“Tax revenues are beating budget forecasts by a wide margin across a broad range of categories and spending discipline is being maintained,” he said.

Although Ms Burton emphasised that caution was required in the assessment of returns for only the opening two months of the year, she said it was now clear the economy was poised for growth.

As the Coalition prepares to set a future course for the State in its “spring economic statement” due next month, she said the continued recovery in the public finances and other positive indicators suggested resources would be available to tackle the deficit in Ireland’s public infrastructure.

“The figures tell the story about where the Irish economy is now and where we hope it is moving to,” she said an interview.

Capital infrastructure

“We would like a resource becoming available for critical capital infrastructure. We need, for instance, to upskill our workforce because that’s the route to well-paid employment. We need to invest and continue to invest in education at all levels, particularly in third level,” she added.

"We need for instance in some areas to finish our road transport network: just let's say Limerick to Cork, Limerick to Tralee and Killarney, and to finish the route to Rosslare."

In addition,the improvement in the public finances would secure the funding required to invest some €4 billion in social housing in the next five years .

Citing agreements with Taoiseach Enda Kenny to reform the universal social charge, raise the entry point for the higher income tax rate and look at tax rates, she said the Government was on course to deliver further concessions in the next budget.

“All of that means that people in work should be able to get in next year’s budget if things continue to go well a little bit more tax relief,” said Ms Burton.