The Government looks set to abandon tax cuts in favour of new 'cost-of-living' benefits.
Leo Varadkar is reported to be planning a significant policy shift for the Budget 2019, which would see Fine Gael move away from major tax cuts.
It would mark a u-turn on the Taoiseach's tax cut promises - including abolishing the USC.
Philip Ryan, Political Correspondent with the Sunday Independent, says the party now seems to be favouring new benefits.
He observed: "We're heading towards the third budget of this Government, and it seems that Fine Gael are moving away from significant tax cuts.
"They don't want to reduce the tax base any more... they don't want to exclude more people from paying tax."
He explained: "What they believe is if they increase benefits around dental, eye care, childcare, paternity leave, all these things... that they will benefit not only the workers who are paying tax, but also the workers outside the tax net."
It was reported earlier this week that the Government is planning to introduce two weeks paid parental leave as part of their budget plans.
Budget 2019 will be the final one covered under the supply and confidence agreement between the Fine Gael led minority government and Fianna Fáil.