Between twitter and facebook it’s difficult to find the time to update this blog. An update is due however and a full redesign will happen soon, I promise. In the meantime here’s a colletion of “5’s” I’ve posted to the the McWilliams blog where he’s developing an your ideas section.
I’ve broken the list into short term changes which need to be made immediately and longer term changes which should be implemented over 5 years to help improve the balance and robustness of our economy. This is currently our major problem as we’ve a shallow economic base relying on a few tricks such as construction (gone) and multi-national FDI. Some of my suggesitons are controversial and some are tongue-in-cheek.
Short term list
- Accept we’re near bankrupt.The world’s dominant lending institutions are either not lending to Ireland or are issuing very short term credit believing we’ll be bankrupt within 6 months. Therefore we’re in an emergecy situation which will affect the lives of everyone living and working here. We need to stop pretending that budget band aids can fix this. It’s patent nonsense. We need to come clean on our financial situation as some builders are currently doing and start negotiating with our bankers to restructure our debt. We’ll also have to flog some of our assets, with all serious offers considered. To aid the flogging we need to end the legislated secrecy regarding house sale prices and start auctioning off unsold houses with no reserve.
- Nationalise and consolidate our banking sector into a rebranded good and a nationalised bad bank. The state would maintain a significant interest in the ordinary equity of the good bank and appoint new management with assistance from some of the better members of the current management.
- Create an all party government, taking the better of our current TD’s. If anything good could come out of this crisis it would be an interruption in the never-ending cycle of FF led and FG led coalitions. Appoint a council of our top economists and international financial experts with, perhaps, some prominent disapora figures to create policy for the dept. of finance and run the good and bad bank.
- Call the ECB’s bluff. Demand a bailout from the ECB on the grounds our bankruptcy will set of a chain reaction that will implode the EMU. Greece seems to be in the same boat. Demand emergency legislation to achieve it. If/when they refuse pull out of the Eurozone and reconstitute a punt pegged against the dollar. Whatever we do, we shouldn’t vote for Lisbon unless the EMU is empowered to bail-out nations in trouble rather than take action against them for running deficits by imposing sanctions/fines. The current situation is farcical!!! Our government is telling us to vote for a treaty that copper fastens a collection of laws which are actively hindering us from dealing with this crisis. The EMU is a joke in it’s current form. If you don’t think so then read this quite reasonable opinion piece in the telegraph
- Create the publicly traded recovery and innovation bonds I’ve described before. In a sense this is happening in an ad-hoc manner as we’re seeing consolidation in our research sector and we’ve already had a major national bond issue. The idea of this bond is that the coupon is redeemable as cash at a particular rate of as income or corporation tax relief at a more generous rate.
Long term list (implement over 5 years).
- Reform our tax system. Reduce taxes on labour and employment. Eliminate employers’ PRSI. Remove all tax reliefs on property rental income, effective immediately. Don’t make this mistake again. Remove tax relief on house purchases for first time buyers. Lower stamp duty and VRT. All these taxes just contribute to individual debt and are bubble promoting. Use some of the recovery bond income to aid this transition if possible. Increase corporation tax to 15% but keep reliefs on patent income.
- Identify wealthy diaspora figures to repatriate using our “ireland bond”. Using these, Create a tax haven for technology investors and investment, partnering with US VC firms. As part of this create research centres which are NOT directly associated with individual academic institutions. Take the largest and leading research groups in particular areas (Biotech, Pharma, IT, Telecoms, Alternative Energy) and give each 5 years of baseline funding for all staff. Consolidate groups from different colleges. Set hard commercialisation targets to gain future funding for another 5 years. These centres should then be separated from their current academic institutions (if applicable) with no budgetary overlap. Inter-college rivalries are mucking up research in Ireland IMHO. Ensure some decentralisation in this process.
- Scrap the pension levy and the defined benefit (based on time-served) pension for anyone not in the scheme more than 25 years. Implement a version of the EU regulations regarding pension fund protection regardless of whether we’re in the EMU or even EU.
- Reform the public sector. Introduce proper performance related pay. Delegate budgetary control and reward thrift with bonuses. Currently it’s nearly impossible for many PS workers to be thrifty as they don’t control their own budgets. This is a MASSIVE PROBLEM in the health service. Sack employees who get consistently poor reviews. No more jobs for life. Give many senior civil servants early retirement and replace them with new managers on perf-related pay.
- Reform the political system. Reduce the number of dail seats by around 20%. Require all political donations exceeding 500 Euro to be on a publicly searchable database. Reward local government for saving money rather than punishing them by reducing budgets for the following year.
Some Extras
- Put more effort into weeding-out social welfare abusers. Impose fines or deport foreign abusers.
- Cap mortgage size based on a multiple of disposable income. Around 10 times.
- Introduce legislation to force lenders to accept a percentage of a property back as part settlement for debt, at the value they accepted at loan time. This would help dissuade lenders from bubble behavior.
- Force some jail inmates to do community service. In the US they have inmates making cadillac limousines & RV’s.I want an RV!!
- Become the 51st state officially. Failing that join the Commonwealth 😀
- Introduce restrictions to limit (not eliminate altogether) the number of unskilled immigrants from all countries including those in the EU
- I’d love to ban political parties in this state but (like some other points here) it will never happen 🙂