Election 2024

Fianna Fáil and Fine Gael close on some issues but last mile to government formation could be hardest

Fianna Fáil particularly keen on enticing Labour into a coalition, while main two negotiating parties have differing views on issues including VAT reform, new departments and overhaul of the Department of Public Expenditure

Photograph: Alan Betson, Irish Times Staff Photographer. -------------------------------------- Leinster House Photo taken on 28/3/07
Negotiations over the formation of a new government are expected to drag on into the new year. Photograph: Alan Betson
Jack Horgan-Jones's picture
Jack Horgan-Jones
Tue Dec 10 2024 - 20:01

The formation of the next government is slowly moving through the gears after initial talks between Taoiseach Simon Harris and Tánaiste Micheál Martin. With discussions between their respective parties’ deputy leaders, Helen McEntee and Jack Chambers, taking place on Tuesday evening, senior figures believe a government that can rely on the support of between 92 and 94 TDs is the best outcome – but a complex process awaits.

The question of time hangs over the entire enterprise. After a frantic year taking in two failed referendums, local and European votes and the general election, the political system is not exactly brimming with energy, and the immovable object of Christmas compounds matters.

The received wisdom is that it will be well into the new year before a deal is struck. However, some close to the negotiations are of the view that with Independent TDs amenable to doing deals, the building blocks could be put in place sooner than that – if that is the route followed. “I suspect things could move very quickly if it’s with the Independents,” one person close to negotiations said on Tuesday, noting the parties could “be very close to an agreement before Christmas”.

This is not a universally held view – although there is a sense that a lot of issues can be tied down without significant difficulty. Sources pointed to housing and health, respectively governed at a high level by pre-election targets and Sláintecare commitments, as areas where manifesto commitments are similar, as well as childcare, pensions and the carers’ income disregard.

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The same is the expectation for any constituency-level asks from independent TDs. Nonetheless, Mr Harris’s warning that his party must not be taken for granted echoes in the private views of senior figures in his party, who believe Fianna Fáil are going to have to back down on some of its asks, while Fine Gael has been more taciturn about letting its goals be known, with terms of reference not yet agreed by the two big parties. “There isn’t even a stool to put a third leg on yet,” one party source warns.

Even once a majority of things are agreed, the last mile may prove to be the most taxing. A landing zone on VAT reform must be identified, where the parties’ respective manifesto positions have to be merged. The creation of new departments is also on the line, with Fine Gael still pushing for a Department of Infrastructure, while Fianna Fáil want a stand-alone Department of Home Affairs to be created, albeit under the leadership of the Minister for Justice, who will have a dual role over two departments.

Fianna Fáil sources are also of the view that the Department of Public Expenditure needs to be overhauled, criticising the “absolutely torturous” process of securing agreement for big projects. The party say reform is needed, as infrastructure megaprojects in water, public transport and the electricity grid clear planning during the term of the next government.

With whispers of Fine Gael seeking a mini-budget for business, the question of a broader cost-of-living package may emerge if firms are to be offered help. Figuring out the exact borders of “parity of esteem” between Fianna Fáil and Fine Gael will be complex – the rotation and time in possession of the Taoiseach’s chair, the division of Cabinet seats, and the allocation of portfolios all remain to be solved.

[ Michael McDowell: Where was the ‘parity of esteem’ talk when Fine Gael was riding high in the polls? ]

Fianna Fáil, in particular, has not given up hope that the Labour Party could be enticed into government – although concerns remain over what exactly Ivana Bacik’s red lines could be. There are misgivings over converting the Land Development Agency into a State construction company, while improving pay and conditions for workers could rub up against the costs of doing business – about which both larger parties are particularly sensitive.

One Fianna Fáil figure warned Labour could “find themselves on the outside without having made a decision on whether they’re in or not”. Fine Gael expects Labour to make its intentions clear by the end of this week. Labour could potentially get up to six ministerial roles, including junior posts, in the view of one source – although that was strongly downplayed by other figures involved.

Independents are unlikely to have anything like that purchasing power when it comes to ministerial roles. In fact, there is a view among the larger parties that if their price is too high, “they could price themselves out of it”, according to one source.

A Fine Gael figure estimated that two junior ministries might be a more realistic goal for the Independents, with the two big parties so close to an overall majority. Talk of a Cabinet post along with super junior and junior roles for Independents is, in the view of this person, “Lala land”.

Negotiators expect parallel talks to take place between the two larger parties and the lndependents, as well as the Labour Party and potentially the Social Democrats, although the exact choreography has not been nailed down – and this will be an intricate balance to strike.