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Public spending boost agreed after years of austerity

An extra 1.3 billion euros of spending power every year for the next five years has been agreed by the incoming minority government and its backers.

A giveaway Programme for Government (PFG) after years of austerity promised to increase funding of public services by 6.75 billion euros by 2021.

The deal is only guaranteed for three budgets and extra money will be divided between two-thirds spending increases and one-third tax cuts – any reduction in the Universal Social Charge will be a high point.

Tackling worsening homelessness by building more houses while encouraging first-time owners and rethinking an ailing health service where record numbers of patients awaited hospital beds were among pledges agreed between Fine Gael, Fianna Fail and independent members of the new Dail.

Much of the 156-page blueprint hammered out during weeks of negotiations on forging a coalition focused on rural Ireland.

Improving transport and broadband outside the main towns and cities were among targets set down.

A pilot scheme will see some rural garda stations re-opened and no small schools will close without the consent of parents. It will ensure class sizes do not increase and address the rural-urban divide in the country’s economic recovery.

An all-party parliamentary committee would consider the future of a health service which is caring for more elderly people with increasingly complex and chronic conditions.

Also on that front a sugar tax can be expected.

The coalition also promised to address the housing crisis – thousands are on waiting lists for low-cost social houses – by boosting construction and helping first-time buyers.

One initiative will be a VAT cut on affordable homes.

Others aim to reduce home mortgage arrears which have pushed many home owners to the brink of losing their properties and press banks to reduce variable mortgage interest rates. Addressing housing issues is a major plank of the plans. A new minister for housing is to be appointed.

The catch-all USC, introduced in budget 2011 as Ireland struggled with its mounting debts which required a bailout from international creditors, will not be abolished but will be worked on for middle income earners.

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Water charges, deeply unpopular within Fianna Fail, are being suspended and the authority of Irish Water, which the minority coalition partner had promised would be scrapped, will be reviewed.

Also in home life, more parental leave may be secured during a child’s first year and there are commitments to improve the old age pension.

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