IT WAS a “myth” that the Department of Finance was divided because of a failure to agree in the negotiations for government, according to Minister for Finance Michael Noonan.

He said the decision to separate the functions came from a policy proposal by Minister for Enterprise Richard Bruton when he was Fine Gael spokesman on finance.

During the Dáil debate on the programme for government, Mr Noonan said there had been many attempts at public sector reform, but they failed because they were not driven by a minister.

In the debate, which the Government won by 103 votes to 46, Mr Noonan said they would keep to fiscal targets for 2011 and 2012, but would “build in a review for the later years”. This would depend on projected growth rates, the Government’s jobs and growth strategy and the extent to which they could renegotiate the EU-IMF deal.

He said the medium-term solution for the banks “is to deleverage. . . or reduce the size in a balanced and measured way. A fast deleveraging process cannot be undertaken because sales of bank assets at firesale levels would have significant consequences for our indebtedness.”

Opening the debate, Taoiseach Enda Kenny said they had to change the situation “where the European Union is presented as being over there and not here in Ireland. European law is Irish law”.

Planned changes include an obligation on all Ministers to “appear before their respective committees or before the committee on European Affairs, prior to travelling to council meetings where decisions are likely to be made”. He said he would brief the Oireachtas before attending EU council meetings.

Mr Kenny said the jobs budget would be introduced within 100 days. “We will reduce the lower rate of VAT and will halve the lower rate of employers’ PRSI.”

Tánaiste Eamon Gilmore said the programme was “shaped by the bitter lessons of the past”. It “draws on the best of both parties” and is centred on “the most comprehensive agenda for reform ever put to the Irish people”.

The Government’s guiding principle would be “to hand on to our children a country that is in a better position than when we found it”.

Minister for Public Expenditure and Reform Brendan Howlin said it would be his job “to convince, not to bully, that we can provide the best public services in the world if we make the changes and open ourselves to the changes required’.

Minister for Enterprise, Jobs and Innovation Richard Bruton said they would “transform the way politics works” by making the system smaller and less wasteful, and “by ensuring people who are elected shape legislation that is passed in the House”.

Referring to the proposed sale of some State assets, he said “we must ask whether we can let go of some of the assets we own. I refer to assets that could thrive just as well in the private sector. The State would get the opportunity to drive what it wants to drive, thus returning to being a source of dynamism,” as it was under Lemass and Whitaker.