He is announcing the Summer Economic Statement later
The Finance Minister Paschal Donohoe says there will "always be constraint" on the Irish economy.
He is to release the first details of Budget 2018 later today, with the Summer Economic Statement.
It will see him reveal he has only €500m left to spend on new measures.
The statement will outline the general state of play in that budget - including the projections for growth in the economy, and the numbers of people at work.
But the crucial part is the so-called "fiscal space" - the amount which Minister Donohoe will have to spend on new measures. That will come in at around €1.2bn.
He told Pat Kenny the Government is keeping plans for its rainy day fund, to provide funds in the event of a downturn.
"You will see two areas that are new: you will see it's committing to a different debt target for our economy in the coming years to allow us to invest more in roads, in schools, and public transport.
"And you will see a decision in relation to the setting up of the so-called rainy day fund: we are going to set one up, but at a different level."
"What you won't see a change in, is next year I'm committing to balancing our books".
But Mr Donohoe admitted this will not mean we can do what we like: "There will also be constraint - there will be constraint for two reasons: the first one is we're in a new Euro now that has a number of rules that (we) didn't have a number of years go.
"The second one we have to be sensible about our finances".
He also said he will have an additional €1.5bn to play with over the next three years for capital projects.
"By next year, our capital expenditure will go above €5bn, by 2021 it will be €7.8bn - which will be an 85% increase versus where we were at the depth of our difficulty".
Asked what projects are earmarked for this money, he said: "I'm not announcing that today".
"The reason for that is every project has to go through a cost-benefit analysis, and we want to do a 10-year capital plan later on in the year, tying in with a better planning framework for the country".
On the issue of fiscal space, the minister said a big amount of that has already been committed to measures announced last year.
"We have a number of full year commitments that we have to honour for next year... When those are paid for it means there's €500m available for discretionary measures.
"If the Lansdowne Road Two Agreement is ratified later on in the year that will reduce that figure further... (to) approximately €300m".