Reward systems for employees, including profit-sharing and performance-related bonuses, are among the measures the employers' lobby IBEC has proposed in its pre-Budget submission.
It also believes the personal tax burden can be reduced by £700 million (€889 million) next year through the widening of the standard income tax rate band and increasing the personal and PAYE allowances by £1,500.
Commenting on the reward systems proposals, Mr John Dunne, IBEC's director general, said there were incentives in place to promote profit-sharing schemes, which apply to publicly quoted companies. But the scope for these was small in the Irish economy and a task force was needed to examine how gain sharing - by which employees of private companies share in profits - could be introduced.
Mr Brian Geoghegan, IBEC's director of economic affairs, said introducing such a scheme in the public service would help alleviate pay pressures.
"If this forms part of a new deal, it could offer real possibilities to companies which are modernising," he said.
IBEC is calling for tax concessions to be aimed at low to middle-income earners. The basic standard-rated personal allowance should be increased by £1,000, and the PAYE allowance by £500, it states. It believes the standard income tax rate band should be widened by £1,000.
"Over the next three years, IBEC believes that there is scope for further increases in standard-rated allowances, widening of the standard rate band, a reduction in the standard rate of tax from 24 per cent to 20 per cent and a reduction in the higher rate of tax from 46 per cent to 45 per cent," the report, Face the Future - the task ahead, states. But Mr Dunne said that although the economic boom had "quite correctly' been called a golden age, public expenditure had to be controlled more so than previously so that tax cuts could be implemented which, in turn, would lead to modern wage demands. Public expenditure had far out-stripped the rate of inflation.
"In our view, public expenditure has not been controlled to anything like the degree that it should have been. It seems to us that this is a very critical area going forward."
IBEC argues that the PAYE allowance should be extended to proprietary directors drawing a salary. It states that it is "very concerned at the negative approach" the Government adopted on tax clawbacks for the corporate sector, leading to a raising of the employers' PRSI ceiling.
"IBEC is very concerned that the Government would seek to widen the tax base. Ireland has demonstrated that lowering taxation does not result in a loss to the Exchequer," the report states.
Among its social welfare proposals is the substantial reduction in numbers on Community Employment schemes with the resources reallocated to the provision of "market-led training".
Mr Geoghegan said unemployment assistance and unemployment benefit increases should not be significantly above inflation unless directed at the elderly and the disabled.
New measures should be aimed at encouraging and facilitating people who are long-term unemployed to get back into employment.
"We are very clear that we do not want job incentives to be made any worse," he said.
