The Small Firms Association is calling on the Government to honour its commitment to reforming the public sector when announcing the budget for 2009 in two weeks' time.
The association is calling for a 5% reduction in public spending next year and is also urging Finance Minister Brian Lenihan not to increase taxes in order to raise revenue.
It is also proposing that a portion of VAT receipts be given to local authorities to help them overcome funding shortfalls.
Meanwhile, the Government's move to underwrite Irish-owned banks is expected to be high on the agenda when the Irish Small and Medium Enterprises Association holds its annual conference in Dublin today.
The association says it fears banks that have to pay a premium to the Government as part of the scheme will pass that cost on to small businesses.