Kenny agrees PAYE tax cut with Burton
* Income boost row held up talks
* New ministers due to be unveiled
Published 11/07/2014 | 02:30
TAX reductions for middle-income earners are key to a new coalition deal to be announced with a ministerial reshuffle today.
The delay in finalising the talks between Taoiseach Enda Kenny and Tanaiste Joan Burton was attributed to the need to strike a balance between tax cuts for middle-income families and ways to increase pay for low-income workers.
A new policy document from the Government will also include a commitment to review the banks' mortgage arrears resolution targets.
The leaders are understood to have signed off on a package of tax-reduction measures over the next two years – but it is dependant upon the finances being available.
"Tax was a difficulty. But it's agreed now on lower and middle-income people and how it would be balanced, based on economic growth and whatever discretion is available," a government source said.
Ms Burton has secured the setting up of an independent body to examine whether the minimum wage should be increased and other issues affecting low-wage jobs, known as a Low Pay Commission.
But she has lost out on securing the Jobs Minister portfolio, which is staying with Fine Gael.
The economic statement will include a broad commitment to increase the disposable income of those on low and middle-ranked salaries. "There's a firm commitment for middle-income earners," a senior government source said.
"But's it's generic. It covers anyone in low to middle-income earners.
"The tax side can only do so much as you've a lot of people on low incomes outside the tax net.
"It's about how do you address the low and middle earners – and it means earners, so people who are at work."
After the reshuffle today, the government policy document will also include commitments to:
* Continue to pursue retroactive recapitalisation at EU level.
* Examine other measures to reduce national debt.
* Ensure NAMA is making the most of market developments.
The policy agreement between the parties also contains commitments on housing and health.
The review of the implementation of Central Bank mortgage resolution targets is not intended to result in a policy change on homeowners in arrears.
"It's about seeing what progress they have made and has it been offering sustainable solutions," a source said.
The Taoiseach and Tanaiste will launch the policy statement at a press conference in Government Buildings this afternoon after the new Cabinet is introduced to the Dail.
The negotiations on the Coalition's new deal finished yesterday afternoon.
Mr Kenny and Ms Burton met again last night to finalise their ministerial choices.
Fine Gael and Labour sources both said Mr Kenny had rejected Ms Burton's attempts to take the Jobs post. "I don't think she pushed too hard," a Fine Gael source said.
"Fine Gael are hanging on to it," a Labour source confirmed.
Although minimal changes are expected to be made to the make-up of government departments, the areas of responsibility of junior ministers is expected to be changed.
The carving up of departments is being ruled out.
The Trade brief is staying as part of the job of the Foreign Affairs Minister.
The Cabinet is expected to be announced this morning with the junior ministers next week.
Environment Minister Phil Hogan will be confirmed as the European Commissioner.
But he will remain as a TD until the end of October, so the by-election to replace him will not be held until next spring.
Dr James Reilly is set to be moved from the Health Minister's brief, with an expectation he will get another portfolio.
Arts Minister Jimmy Deenihan's continued inclusion in the Cabinet is expected to be contentious in Fine Gael.
"There'll be a lot of disappointed backbenchers if he's not dropped, especially middle-ground guys who are around for years," a senior party source said.
Talk of Communications Minister Pat Rabbitte being kept in Cabinet by Ms Burton was played down last night.
"I don't think anything has changed," a Labour source said.
Taoiseach Enda Kenny and Tanaiste Joan Burton have agreed on the policy priorities for the remainder of the lifetime of the Government.
Finance Minister Michael Noonan and Public Spending Minister Brendan Howlin are also understood to have signed off on the agreement.
"He [Mr Kenny] could go with it today. Everything is finished," a senior government source said about the reshuffle.
Alongside the reshuffle, the government parties will publish a set of areas in the Programme for Government, which will get a particular focus over the next 21 months.
The reshuffle has to be announced in the Dail, which would require a change to the Order of Business.
Mr Kenny said the concluding stages of the talks with Ms Burton focused heavily on preparing the economic statement between Fine Gael and Labour.
He said both he and Ms Burton wanted to inject "a renewed vigour and momentum" behind the workings of the Government, adding that families have made "exceptional sacrifices".
But the Taoiseach would not be drawn on the make-up of his Cabinet.
"It's important first of all that it's not about personalities or faces.
"It's about the enthusiasm and moving forward of the Government in the country's interests," he added.