The Tánaiste Mary Harney insisted at the Progressive Democrats annual conference in Killarney that fundamental reform of the health service will happen.

Delivering the opening address at the conference, Ms Harney promised that extra resources will be made available for health but that extra spending would have to be accompanied by reform.

Ms Harney criticised some hospitals where the x-ray department closed for lunch, and others where expensive diagnostic machinery was only in use one third of the time, but whose managers were seeking extra equipment from the HSE.

The Tánaiste said her plans for tax breaks to build private hospitals beside public ones would result in thousands of extra beds for public patients at less than half the cost of traditional methods.

She stressed that failure on reform was 'not an option' and said that if the economy continues to grow, health could be getting 20 billion in funding by 2012 - but that the money must be accompanied by reform to ensure the best results for patients.

Motions debated

Meanwhile, the delegates at the conference voted in favour of reducing tax breaks for property investors.

Delegates also supported a motion that would reduce tax relief on mortgages for investors, which currently stands at 42%, compared to 20% for first time buyers.

It was decided backed a call for penalties on those who hoard serviced land that has been zoned for development.

A separate motion, calling for a stamp duty exemption for people over 65 selling their homes to trade down, was also passed.

The conference also called for spending limits for Community Employment Schemes to be removed - despite the fact that party leader Ms Harney had been criticised for reducing the number of places on such schemes while she was Minister for Enterprise.

Delegates also called for the scrapping of the television licence fee, although without reducing funding to the RTÉ Authority.

Tomorrow, the delegates will vote on whether the party should make a pre-election pact with Fianna Fáil.