The Minister for Finance, Mr McCreevy, has been warned not to introduce new "stealth taxes" in Wednesday's Budget after a report said Ireland was the joint most expensive country in the euro area for consumer goods and services.
The National Competitiveness Council (NCC) also said Ireland was among the most expensive for utilities such as waste disposal and electricity.
In its annual report, Competitiveness Challenge, published today, the council advises Mr McCreevy, not to impose further tax increases on the old reliables of alcohol and tobacco or more stealthily on public services.
Only by doing this can Ireland's inflation rate come into line with the euro-area target of 2 per cent, the council said.
The annual competitiveness report benchmarks Ireland's competitiveness against 15 other advanced countries. The 2003 report ranks Ireland as the joint most expensive country in the euro area for consumer goods and services, along with Finland.
Ireland ranks as the fourth most expensive country for insurance premiums, third most expensive for landfill costs and third most expensive of nine countries for industrial electricity costs.
According to the NCC's chairman, Mr William Burgess, Ireland's most pressing economic policy objective must be to further slow the growth of prices and costs; otherwise it could be left behind by any global recovery.
According to Competitiveness Challenge, Ireland ranks only 13th out of 16 countries with regard to the intensity of domestic competition.
Fine Gael's Mr Phil Hogan said in light of the report Mr McCreevy must not "give into temptation" by raising charges and fees in the Budget.
"Competitiveness Challenge 2003 is a clear warning about budgetary policy in advance of the statement by Finance Minister Charlie McCreevy this Wednesday," Mr Hogan said.
"Perhaps Minister McCreevy and the Government will heed the warnings about loss of competitiveness on this occasion by introducing measures that will not add to higher costs to employment and consumption generally.
"I call on the Finance Minister to recognise the competitiveness challenge for Ireland in his Budget speech on Wednesday and resist the temptation to take the easy option of increasing charges and fees that will only add further to the woes of consumers and businesses."
Labour's Ms Joan Burton said the report was "a shocking indictment of the record in office of the Minister for Finance".
"In the light of the findings of the Council the Minister must now abandon any plans he had to either increase or impose new stealth taxes in Wednesday's budget," she added.
