Kenny, Gilmore discuss deal


Enda Kenny and Eamon Gilmore are considering the composition of the cabinet following the endorsement of a joint programme for government by their parties.

The Fine Gael and Labour leaders spoke by telephone today but the parties have stressed that the composition of the cabinet has not yet been decided. Details of individual ministries may not be finalsied until Wednesday morning before the 31st Dail convenes for the first time.

One key element of the deal between Fine Gael and Labour is that each party will have a senior minister in the Department of Finance. Fine Gael will get responsibility for the budget, taxation and banking, while Labour will have responsibility for public expenditure and public sector reform.

It is expected Michael Noonan will fill the finance portfolio for Fine Gael, with Joan Burton or Pat Rabbitte taking responsibility for public sector reform.

Fine Gael is also expected to get enterprise and employment and health; Labour will get foreign affairs, social protection and education. Labour leader and tánaiste-in-waiting Eamon Gilmore is expected to opt for foreign affairs.

Apart from Mr Noonan, among those tipped for cabinet on the Fine Gael side are Richard Bruton, Phil Hogan, Alan Shatter, James Reilly, Frances Fitzgerald, Simon Coveney, Leo Varadkar and Jimmy Deenihan. There is speculation that Seán Barrett will be offered the post of Ceann Comhairle.

On the Labour side, the three TDs involved in negotiating the coalition deal - Brendan Howlin, Mr Rabbitte and Ms Burton - are set to join Mr Gilmore in the cabinet. Former leader Ruairí Quinn, Róisín Shortall and Jan O’Sullivan are seen as likely contenders for the final cabinet post or the “super junior” ministerial job. Labour is also expected to select the next attorney general.

Speaking on RTÉ radio this morning, Ms Burton said the new government would await the results of bank solvency stress tests at the end of the month to find out what further difficulties may lie in the banking sector before renegotiating the terms of the EU-IMF deal. "What we want is a renegotiation of the framework and contents of the IMF deal so the country can actually live, and grow and return to prosperity," she said.

Ms Burton also said the government would use €4.9 billion from the National Pension Reserve Fund in a “cautious and intelligent” way to stimulate investment in infrastructure.

A 64-page document, Towards Recovery: Programme for a National Government, was approved unanimously by the Fine Gael parliamentary party yesterday. It was endorsed by a Labour Party delegate conference in Dublin, despite some dissenting voices.

Mr Kenny and Mr Gilmore met afterwards and both stressed the urgency of dealing with the enormous problems facing the country. Mr Kenny said they had been given a strong mandate by the voters and intended to lead by example and tell people the truth. “It is not a Fine Gael document. It is not a Labour document. This is a programme for government document that we have agreed on its contents,” he said.

Earlier, Mr Gilmore told delegates at the Labour conference that the programme for government was a clear departure from the policies being pursued by the outgoing government. He said there would be difficult days ahead and the stakes were high but he would not ask delegates to support the party entering government if he did not believe it could succeed.

Among the key elements of the programme for government is an acceptance of the target of reducing the budget deficit to 3 per cent of gross domestic product by 2015.

This is one year more than Fine Gael proposed in its election manifesto and a year less than the target advocated by Labour. The two agreed to continue with the existing four-year plan for 2012 but to review progress on deficit reduction during preparation of the 2013 budget.

The programme rules out any increases in tax on income but a property tax in the form of a site valuation tax will be considered.

There is also a commitment to install water meters in every home in the country, with the introduction of a charging scheme under a newly established water utility company.

The programme pledges the universal social charge will be reviewed and the reduction in the minimum wage will be reversed.

On the question of political reform, the programme renews the commitment of both parties to the abolition of the Seanad but no time frame is specified.

There is a commitment to the establishment of a jobs fund but up to 25,000 public sector jobs will go.

The programme proposes deferral of recapitalisation of banks until solvency stress tests are complete.



A “full review” of funding before the end of this year but there is no specific reference to a graduate tax.

Taxes & Rates

Current income tax rates to be maintained. A system of domestic water charging to be introduced. A property tax to be considered and the universal social charge reviewed.

Political reform

Referendums planned on the abolition of the Seanad, cutting judges’ salaries and protecting children’s rights.

Public sector

Between 18,000 and 21,000 job cuts in the public sector by 2014, with a further 4,000 by 2015. Up to €2 billion in sales of “non-strategic state assets” will be targeted.


Universal health insurance will be introduced by 2016, ending the two-tier health system and removing fees for GPs.

Deficit reduction

The target date for reduction of budget deficit to 3 per cent of GDP is being extended from 2014 to 2015.


Resources will be provided in the first 100 days for a jobs fund. The 13.5 per cent VAT rate will be cut to 12 per cent, the travel tax withdrawn and cut in minimum wage reversed.