The country is insolvent with a deficit of €20bn and national debt of in excess of €300bn. We must find massive savings in current spending leading to a reduction in the deficit and thus a reduction in borrowing. Increasing taxes will have some albeit a limited benefit as they generate diminishing return in line with the increases levied. So we must close the gap elsewhere.
Political reform is a must. The number of TDs must be decreased to 90 max with a salary of around €80,000 pa, a maximum of 12 ministers with a salary of €140,000, and the abolition of Seanad Eireann. Local Government must be reformed. Pooled cars, vouched expenses etc must also be implemented. Leadership must be seen to begin at the top. Leadership is offered by those who know the way, go the way, and show the way. Ergo we have no leadership.
Public sector spending in the form of wages and health and welfare payments accounts for the majority of our annual spend. It needs reform where possible without impacting on frontline services. We must get rid of those people who are not essential to the organisation in which they work. There is much fat across the HSE, education, local authority, numerous quangos and civil service sectors. Protect the frontline staff where possible in health, education, Gardai, prison service, local authorities, but cut out the useless layers of management and bureaucracy.
Get rid of the quangos, there is more than €13bn in savings right here.
We need to benchmark middle and higher public sector and civil service staff to similar-size EU states like Norway, Finland and Denmark. We must also abolish the link between public service pensions and the current rates for the job. Is it not ludicrous that people can earn more from a pension paid by the taxpayer than when they were actually employed by the taxpayers?
The implementation of these policies will require courage as they will incur the wrath of the public service unions and will become immensely unpopular. It is said that life shrinks or expands in proportion to one's courage. Conflict is inevitable but it must be faced down. Career politicians simply have not demonstrated the courage or moral integrity to take on these sacred cows with the necessary will, determination and resolve. It will probably require someone from outside the political spectrum. A one-term person with a singular determination to reform a broken system is what is required.
Welfare, child benefit, rent allowance, other 'entitlements', etc, need to be cut because the rates are simply too high and are a major disincentive to work when being on welfare pays more than the average wage. It is impossible to create employment when it is in the interests of the people to remain on welfare because they will 'lose their entitlements' if they take a job? Welfare is intended to be a safety net for the most vulnerable in society rather than an entitlement that people see as theirs by right. Recidivist and violent criminals should also have their welfare entitlements abolished.
We must stimulate industry and remain competitive therefore the minimum wage must be cut.
All tax reliefs should be re-evaluated and most abolished. Pension relief should only be at a standard 30 per cent capped at an annual limit of €50,000. Reliefs for the creation of long term and sustainable employment should be provided but not for temporary and transient employment such as the construction sector, summer employment, etc. We need to maintain spending where possible on capital or infrastructural projects and to increase spending on job creation. We will never recover as an economy if we do not get people back to work.
Everyone must pay some income tax. Tax-free allowances must be cut below €18,300. Having 900,000 people outside the income tax net is unsustainable. The tax bands must be widened and PRSI and social entitlement levies must be paid on every cent earned by everybody without exception.
We have become accustomed to an unsustainable way of living and now we are paying the price. Like it or not we must all have a radical change of mindset. This is can only happen if Government also address the issue of personal indebtedness. The banks too must play their part.
It is time for Government to do its job. It will require courage and it will be unpopular. Competence, courage, and commitment are the virtues required. I will not hold my breath.