Advisors working for the two parties claim that much of what was promised has already been delivered. There is, however, one big pledge that remains unfulfilled. In fact, it's a commitment that first featured in the 1997 Programme for Government. "If economic circumstances permit, the objective will be to reduce the higher tax rate to 40% during the lifetime of the government, " Fianna Fail and the PDs promised in 1997.

After their re-election in 2002, the two parties committed themselves to "pursue further improvements in the income tax regime if economic resources permit".

The top income tax rate is currently 42% and the economic resources are available to knock it back to 40%.

Whether or not such a move is the best economic and political decision at this point in time, is the current focus of discussions between the two government parties.

Last Thursday, with the annual estimates announcement, Brian Cowen unveiled the first half of his budgetary strategy for 2007. Taxation changes will be the main focus when part two of that strategy is announced in the Offaly man's budget day speech in early December.

There is no dramatic tension between the two parties over income taxation policy but the issue has risen up the agenda in the weeks since Michael McDowell has taken over as PD leader. Interestingly the debate has been taking place not just within the walls of Government Buildings but also in the public domain as each party pushes its favoured position.

The PDs are pressing hard for a cut in the 42% rate. Last weekend, in an interview on TV3, the PD deputy leader Liz O'Donnell ratcheted up the tax issue, saying her party was "always working to achieve individual aspects of our programme for government with Fianna Fail".

Remarkably, she openly discussed the coalition's main budget day decision. "I would be very hopeful that there would be tax cuts in this budget, " O'Donnell said with what can only be assumed was the support of her party leader.

So we now know that a cut in the top rate of income tax is a live issue for the cabinet.

Fianna Fail sources give the impression that the party is lukewarm in backing the rate cut option. On several occasions recently Cowen has stressed the need to direct tax reductions at low and middle income earners. This argument is supported by the evidence that an increase in tax credits would be more equitable than a tax rate reduction that disportionately benefited the better-off.

But the latter group is also made up of a significant number of PD voters, and the party . . . with an eye on being in government after the next election . . . wants to win concessions for its key constituency.

In any event, for all the Fianna Fail rhetoric on tax policy, it was the current finance minister who earlier this month told his party's ard fheis that the opposition "don't understand that tax cuts drive economic success".

Was that the statement of a man leaving wriggle room for a decision that has yet to be taken?

The debate on stamp duty will take place during next year's election. There will be no significant changes along the lines suggested by the PDs in next month's budget.

But the debate on the 42% rate is another matter altogether. Economists argue that a reduction in the top rate of income tax is not necessary and may even be counter-productive at this point in the economic cycle.

But the reality is that the political cycle and the PDs' political survival are all that matters.

McDowell did not stay in government during the payments to Bertie Ahern controversy without an expectation that the PDs would benefit from enduring opposition criticism for accepting low standards in high office. The PDs need to be able to remind the voters of why their continued participation in government is essential, and what better way than with a headlinegrabbing income tax rate cut?