Fine Gael, Labour Agree Program For Government

Fine Gael and Labour have agreed to form a coalition government when the Dail resumes tomorrow (Wed.).

Negotiating teams from both parties agreed on a Program for Government over the weekend after six days of talks.

It was approved in votes by both the FG parliamentary party and a special Labour Party delegate conference on Sunday.

Under the Program for Government, the Department of Finance will be split into two ministries.

The Finance Minister will be responsible for the budget, taxation and banking.

The new economic ministry will control public spending and public sector reform.

These two ministers, along with the Taoiseach and Tanaiste, will also form a new economic super-ministry or council.

This council will have supreme power over the country's economic policies as it seeks to recover.

Both parties will have two members on this economic council.

The 64-page document "Towards Recovery: Programme for a National Government" outlines policies in a range of areas.

On the key question of reducing the deficit, it accepts the target of reducing the budget deficit to 3% by 2015.

It rules out any increase in income tax, but says a property tax will be considered.

Water charges are on the agenda too, with a commitment to install meters in every home in the country.

The controversial Universal Social Charge introduced in December's budget will be reviewed, and the cut in the minimum wage will be reversed.

The number of people working in the public sector is to be cut by between 18,000 and 21,000 by 2014, and reduced by another 4,000 in 2015.

The new government will review the system of funding education by the end of the year - but the document does not mention whether or not a graduation tax is being considered.

Both parties had committed to reform of the health service in their election campaigns and they have now pledged to introduce universal health insurance by 2016, with free GP care for everyone and an end to the two-tier system.

Patients will be treated on the basis of their health needs, not on the basis of whether or not they have private health insurance or are a public patient.

The government says it will create a jobs fund in the first 100 days, and also commits to cutting the lower VAT rate from 13.5% to 12% in the hope of boosting employment.

It will abolish the Travel Tax as part of a deal with airlines to restore lost routes and boost tourism to the country.

There are promises of political reform too, with proposed referenda on the abolition of the Seanad, cutting judge's salaries and children's rights.

There could also be votes on protection for whistleblowers and giving more power to Dail committees.

A constitutional convention will be held to review Bunreacht na hEireann looking at such topics as same-sex marriage, lowering the voting age, removing a provision on blasphemy and reducing the presidential term from seven to five years.

Speaking after his party had endorsed the deal, Taoiseach-elect Enda Kenny said he was very happy with the outcome of the negotiations.

"We want to rebuild our reputation both here and abroad. There are suspicions about Ireland in Europe. We want to banish those suspicions by telling the truth to our colleagues."

He acknowledged that there had been compromises from both parties.

"It is not a Fine Gael document. It is not a Labour document. This is a program for government document," he said.

One of Mr Kenny's first jobs on Wednesday will be to appoint a new team of Ministers to cabinet.

Michael Noonan (FG) is favorite to land the Finance post, with either Joan Burton or Pat Rabbitte (LAB) will get the new second Finance ministry.

Others likely to make the cut are Fine Gael's Richard Bruton, James Reilly, Alan Shatter, Phil Hogan, Frances Fitzgerald and Simon Coveney and Labour's Brendan Howlin and Ruairi Quinn.

In all there will likely be 10 Fine Gael ministers and five Labour ones.