The IMPACT trade union says it is good that the government is looking at improving people's standard of living, although a high-profile economist is sounding a note of caution on Ireland's economic recovery.

The reactions come following the Minister for Public Expenditure Brendan Howlin's comments at the weekend in which he said some public sector pay cuts could be reversed as public finances improve.

There have also been hints from cabinet that Budget 2015 will see taxes and cuts worth less than €2 billion imposed on the economy.

IMPACT spokesman Bernard Harbor pointed out that when the Haddington Road agreement on pay conditions was put together, they reserved the position that 'pay recovery' could be looked at if the economy improved before the deal expires in 2016.

Speaking to Newstalk Breakfast, Mr Harbor welcomed the fact that the government could be on the same page as unions:

In contrast, UCD economist Colm McCarthy has warned politicians that it's not a case of 'happy days' being here again just yet. Speaking to the Pat Kenny show here on Newstalk, he explained that "the national debt is still rising":