The incoming Taoiseach has welcomed plans to ballot public workers on a proposed new pay deal.
However, Leo Varadkar has conceded that the costs of the new deal will reduce the amount available to spend elsewhere in the Budget.
The proposed three-year deal to replace the Lansdowne Road deal will cost €180m in the first year.
The new Fine Gael leader says there will be enough money left to continue cutting taxes on pay.
Mr Varadkar said: "I do think it will allow scope for us to honour the pay deal if it's agreed, some reduction to the taxation for working families and as well as that some room for improvement in public services and capital expenditure.
"But what is absolutely the case is that it won't be possible to do in the next budget everything we would like to do."