The top rate of tax - of fifty two per cent - is to be reduced.

The Government says the reduction - aimed at low and middle income earners - will begin in October's Budget.

The coalition is also pledging to return Ireland to a level of full employment by 2020 - replacing all the jobs lost during the crisis.

Fine Gael and Labour's new 'Statement of Government Priorities' also commits to the full retention of the Free Travel Scheme.

The Taoiseach Enda Kenny says the reduction of the top rate of tax - which is unsustainable - will be achieved over a number of Budgets: