Difficult to reconcile old Civil War foes for coalition deal

Cynics would maintain there are no fundamental ideological differences between the political foes. That aside, their election manifestos and opposing positions on taxes and services could be difficult to reconcile, especially for Fianna Fáil which made such a comeback and doubled its Dáil seats.

So what are some of the major flashpoints if the two largest parties in the Dáil finally pick up the phones to each other? The most talked about is water charges and the utility’s position under any future government.

Fianna Fáil wants water charges frozen and the company taken apart. Instead, some staff would take voluntary redundancy (at a cost of up to €9m) while others would move to a new authority overseeing charges. Contracts would be honoured while the company is wound down.

Fine Gael says the current model is the best value for customers and services. Flat rate charges are in place until 2018 and Irish Water intends to continue its metering programme.

However, there is expected to be a drop in customers paying bills following the inconclusive election result.

Some Fine Gael ministers maintain they are open for discussions about the charging system. A compromise between the two sides would have to agree on whether charges should be scrapped or postponed indefinitely and whether Irish Water is put on the scrap heap or not.

Another stumbling block was the amount pledged in the election for tax cuts. Fine Gael want to abolish the much-hated universal social charge while Fianna Fáil will not risk reducing the tax net so dramatically.

Fianna Fáil made much of Enda Kenny’s push for a US-style tax system in its campaign and said its opponent’s push to help the wealthy would decimate public services by reducing the money available to spend. Fine Gael has not come down from that perch on abolishing the USC, despite the policy being repudiated by others

Fianna Fáil, on the other hand, wants a 60:40 spend between public services and tax cuts.

Some middle ground would have to be found on this. It is also now clear that, despite claims by Finance Minister Michael Noonan, Fine Gael’s tax cut proposals would take up more than a third of its “fiscal space” plans over the next five years.

Differing views between the parties on funding health also need to be overcome. Fine Gael had supported universal health insurance, a model played down by Health Minister Leo Varadkar. However, Fianna Fáil, while agreeing there should only be a single-tier system for users, wants health funded from taxation.

Furthermore, it opposes suggestions from Fine Gael about privatising services or hospitals.

Fianna Fáil also wants action taken against banks refusing to pass on mortgage interest rate cuts from the ECB to borrowers.

Fine Gael refuses to interfere in the market and says banks and regulators act independently of government.

Differences also exist on housing and justice. Fianna Fáil wants to reopen Garda stations closed by Fine Gael while the two have differing proposals on the number of social housing units that could be built over the next five years.

Weekend polls suggest that voters clearly want a grand coalition as opposed to another election.

Civil War politics may be on the decline, but resolving policies and stances on taxation and services would be crucial to any deal being done on a coalition or support for a minority government.