Cabinet reshuffle and policy talks in next 48 hours crucial to Coalition’s survival

The next 48 hours are going to be critical for this Coalition Government. Both Taoiseach Enda Kenny and new Tánaiste Joan Burton know their negotiations must yield policy changes and a Cabinet reshuffle that will proclaim “renewal” with a bellow.

Most Government TDs have been working on the understanding all will be announced tomorrow and the new squad of Ministers will be on the bus to Áras an Uachtaráin to collect their seals.

But according to those close to the process, it’s likely the outgoing Cabinet will hold its last weekly meeting tomorrow. And that it may be Wednesday, even Thursday, before the names of the new ministers will be brokered.

Burton will arrive into Government Buildings this morning armed with a decisive mandate from her party to effect a meaningful change in direction for Government during its last 20 months in office. As against that, she and her party know that divorce is not an option anytime between now and early 2016 and the marriage (loveless or not) must stay the course. In real terms, that means two budgets, both upbeat and feelgood enough for voters to give the Coalition parties a bounce without being accused of sellouts or buying an election.

So for both sides, the vital aim is to hammer out an agreed strategy that will see the Government serve its full term and benefit from the uplift in the State’s fortunes that both parties predict will have been well-established by then.

Later this week, when all is arranged, those close to the Labour leader will be keen to show that Burton has brought a new dispensation, changed policy direction towards Labour priorities and radically rejigged the Labour side of Cabinet.

Not protracted

Unlike the previous

Fianna Fáil

and Green coalition, this mid-term adjustment will not be a protracted affair. Sure, there have been exchanges of documents. Labour produced a position paper setting out its priorities.

Fine Gael

has issued brief response papers. It has all been designed to be short, sharp and focused. Forearmed with the knowledge that Burton’s elevation would be a formality, both sides have been working on their strategies .

The thrust of what Burton has been saying in recent weeks is that the recovery must be social as well as economic. In real terms, that will translate into a “living wage”, with a low pay commission being established to look at setting a minimum wage commensurate with that aim.

Housing

There will also be a focus on housing (including more social housing), tax reform and easing of EU fiscal rules along the lines advocated by Italian prime minster

Matteo Renzi

(a potential ally for Burton).

Of course, jobs and tax reform will be an area of commonality, although both parties will want to put different emphases on these policy areas. Labour will look for the jobs and enterprise portfolio and will probably cede foreign affairs in return. In addition, the prospects of Phil Hogan becoming the next EU commissioner look like they solidified at the weekend.

Are there roadblocks? Certainly, but none insuperable. Labour will look to protect public services. Fine Gael will seek tax breaks for middle-income earners, the so-called “coping” classes. Both can be accommodated by a budget that falls well shy of a €2 billion adjustment. All of that will be predicated on solid economic figures closer to October.

For most political pundits, the personality always outtrumps policy and most interest surrounds who is for the top table and who is for the chop. As of now the lie of the land is: Eamon Gilmore and Pat Rabbitte will not remain in Cabinet. Ivana Bacik won't be promoted. Alan Kelly will become minister for jobs with Kathleen Lynch and Alex White the others tipped for promotion.

On the Fine Gael side, it's harder to say. Leo Varadkar could get environment and local government with Simon Coveney being transferred to foreign affairs. James Reilly could go to transport or replace the departing Jimmy Deenihan in arts. If agriculture is vacant, Paul Kehoe may have a biddable chance of promotion. Paschal Donohoe also has a strong case, with Regina Doherty and Dara Murphy also being mentioned, as is Ciarán Cannon and Fergus O'Dowd.

Whatever is decided, the next two days will be crucial in determining the fate of this Coalition.