To understand the problems facing the Irish economy at the moment, we need to understand how these problems came about. Simply put, we spend too much, and don't pull in enough revenue to cover that. We find ourselves in this position because the once-off record tax returns from the property boom were put into persistent costs, like wages and social welfare.

We need to change our expenditure patterns quickly and effectively. 

In order to correct the situation, these costs must be realigned with the actual capability of the state to support them. In simple terms, in a couple of years time, it is likely that we will be paying 20% to 25% of all tax revenues in debt servicing alone. This makes the assumption that we will be able to source that debt at all, since it is not unlikely given the economic environment that nobody will lend to us regardless, and so we will end up having to take these measures when we have no other option.

The shortfall in expenditure is some €20-odd billion this year, after €13 billion last year, or around two thirds of total tax take. Ireland's tax system is based on expenditure taxes, you get taxed on what you spend, and less on income taxes. This gives us lower income taxes but higher indirect taxation. A shift from indirect to direct taxation is required here. The measures outlined below will put us in a position to be able to expand our economy once again, for the benefit of all the people of Ireland.

A five part approach to resolve the problem must be taken, after a full intial review. We do not advocate selling national assets and mass privatisations, since the last thing the country needs right now is the introduction of a profit margin in essential services, and the emphasis must be on avoiding an increase in the national debt.

Initial review
We need a full and thorough top down line item analysis of the expenditures the Irish state incurs, and recommendations for change based on that. Outside analysts and recognised international experts will be convened, one group for each sector of the Irish government, and their experience put to use to pinpoint weaknesses by international comparison.

These groups will be given guidelines as to the desired direction each sector should be going, outlined in the other policy articles. Some of the methodologies that will be used include:

• SWOT: This is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project. It involves specifying the objective of the project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.
• PEST: PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis and gives a certain overview of the different macroenvironmental factors that the company has to take into consideration. It is a useful strategic tool for understanding demand growth or decline, position, potential and direction for operations.
• LEAN: The most important of the three main methodologies, lean means "doing only what is needed, when it is needed, and in the amount needed." It has been used by government departments and companies worldwide with startling results. This means recognising that only a small fraction of the steps we carry out actually create the value the citizen is paying for. Learning to see waste and to understand that rapid change is possible, however, are only preparatory steps for lean. The second thing to do is to see organisations from a process perspective. Lean is a system focused on managing processes and improving them by compressing time rather than keeping each of the assets busy.

Maintaining a performance based metric throughout the analysis and recommendation process is also important. Once the initial review is completed, a National Transition Agency will be set up to enact the required reforms.

Increased taxes and further tax bands
An increase in the base and marginal rates will be inevitable given the situation the country as a whole finds itself in. It is also likely that a third tax band will be added above the marginal rate. Levies and similar measures will be removed. The degree to which taxes must be raised will be indicated by the intial analysis. The mid to long term goal is to reduce the overall tax burden however, and any temporary measures taken will be aimed towards ultimately reducing this burden.

An increased pension contribution for all taxpayers, as an extension of the current PRSI payments will also resolve many of the questions outstanding about disparities between public sector and private sector workers, and ensure a good state pension for all citizens.


Reduction in expenditure

• Social welfare in all of its forms will be reviewed in the initial phase, with the likely result that social welfare payments will be reduced after the first year, including agricultural payment control and means testing of those in receipt of CAP payments. Unemployed people who start small businesses wil be allowed to retain benefits for six months. The pay of workers recruited from among the jobless will be subsidised in the short term to help with training costs. In a similar fashion, when hours are cut, employees will go for training and their wages will be subsidised by the state, with an emphasis on reducing hours and not employees. False invalidity benefits will be vigorously pursued in this policy also.
• The Health sector, being one of the main cost centres for the Irish state, will be one of the primary areas of analysis. Overall, a move towards the Dutch system of health support (rated best in the world and the best value for money by the World Health Organisation, an unusual combination), whereby healthcare is to a great extent privatised and support is provided by highly regulated insurance companies, is desireable. Lower income families would have their insurance costs subsidised by the government.
• The phasing out of Quangos, QUAsi Non-Governmental Organisations. There are hundreds of these in existence, many of which replicate the duties and purposes of one another. These are organisations to which the government has handed responsibility for various areas. Unfortunately they have become political bargaining chips, in which positions are offered to those whose contributions to various parties warrant it. These must be removed from the state expense accounts, and either fully privatised or put back into the remit of government.
• The goal of Amhrán Nua is to reduce the number of politicians and their pay in line with countries of similar size.
• Those measures and groups which support the property market will be removed, with the exception of emergency interest relief. Social and affordable housing due to the policies of the last few years, is neither, and must be dealt with as such. A public housing price register will be established, as in other countries.

The Banks
It would not unreasonable for an observer to note that banks as they exist in Ireland today are not part of the system of government, and yet they have managed to put themselves in a position whereby they are seen as "vital" to the state. The position we take on this is that the banks are in no way vital to the country; the services the banks provide are.

The situation we find ourselves in at the moment is that enormous sums of money have been handed out to banks, and are continuing to be handed out, directly from the tax coffers of Ireland. These unelected, for-profit companies using the financial resources of citizens to inflate their accounts is one thing, but the expected improvements in performance has not occurred.

So in the immediate short term, there are two goals:

• Preserve the deposits of Irish citizens: By assuming the good assets of the banks under an umbrella National Credit Agency, whether by nationalisation or other routes, and selling on these assets, the value of the deposits of Irish citizens are to be protected during the transition phase. No changes in ATMs or bank procedures will take place initially, and the entire transition will be managed over the period of a year. Once these deposits are protected, shareholders and other investors will be taken care of from the remainder of the assets, which will be passed on to another agency for proper disposal. The banks will be taken into temporary nationalisation. Outstanding debts will be discussed and negotiations will take place with senior debt holders about a debt for equity swap, which is the normal process in such situations. That is, the State Guarantee will be renegotiated.
• Ensure that credit continues to flow to those businesses that need it: The second part of the functions of the banks is to ensure that businesses receive short term credit in order to continue functioning, in the time period between for example the production of products and the sale of these products. These short term loans to good risk businesses will be supplied by the NCA.
• Set up the Irish Common Investment Market, where limited companies can offer up shares to the public to buy and sell on the internet, without intervention from middlemen. The original idea of the stock market was to allow people to invest in companies, which has long since transformed into a system that benefits very few companies. The ICIM will be very tightly regulated, and linked with the Revenue Commissioners and Finance Departments, but will essentially allow easy direct buying and selling of shares in many more companies than are currently allowed, giving them access to capital without debt.

In the longer term, stronger regulation and an effective regulator, as well as higher capitalisation requirements, are needed in order to ensure there is no repeat of these problems. Lobbying and attempts to put pressure on the government to revert these new regulations will be legislated against, except in public forums. Any steps that have been taken towards NAMA will be reversed and dismantled.

Further Steps

• One of the most important issues that is often missed when discussing wage compensation schemes is the purchasing power of your salary, or to put it another way, how much you can get for your money. One of the most important goals of Amhrán Nua will be controlling the cost of living, in particular relative to our nearest neighbours. A fully empowered consumer anticompetitive agency will be set up in the intial phase to investigate cartel behaviour and profiteering in the Republic of Ireland, aiming towards equitable prices for goods and services equivalent to the European market.
• Both ESB and Bord Gais will be returned to utility status, and prices adjusted accordingly.
• The communications infrastructure controlled by Eircom will be returned to public ownership, and the various telecommunications agencies can compete for the services based on rental of these facilities.
• Set up a single self funding rental agency to hold deposits between landlords and tenants, and investigate of the role of management companies in property ownership. Planning process streamlining and reform will be enacted, as will Property Registration Authority practises and instant-updating. We will also modernise rental regulations in line with other European states.
• Issue a National Recovery bond, in return for future tax credits.
• Encourage community purchase plans from wholesalers for staples and essential supplies.
• Unused government office space (estimated at some hundreds of thousands of square feet) will be repurposed to use as startup office space for new companies. The state may take an equity share in the company in order to help to fund maintenance and reduce or eliminate rent. This also has the advantage that resources can be pooled and single low cost sources for business services such as accountancy and solicitors can be located in a nearby area.
• We will be retaining all existing legislation on immigration and working within existing agreements with the European union pending a top down review of the impact of the level of immigration we have been receiving on Ireland, in conjunction with recognised international bodies. If further alterations are required based on this review, these will be implemented by referendum, if such is required. 
• We will ensure that the existing legislation has the funding and qualified individuals to ensure that it is swiftly and fully enacted, for the benefit of the state and those interacting with state agencies, by setting up a dedicated immigration agency.
• Convert foreign aid commitments to microfinance for third world countries via an intermediary corporation, a process which has proven beneficial both for those states receiving microfinance and for the finance providers.
• We will reduce employment, regulatory and energy costs for small businesses, as well as enforcing rent controls on commercial properties, and lowering taxes for the first two years of business.
• Reform of debt laws, to ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance.
  
• Develop a legal and business environment supportive to timely payments in commercial transactions.
• The introduction of a property tax on second, third and subsequent properties on a sliding scale will ensure the housing market returns to normality as quickly as possible, and hence restart the market, without threatening the rental sector. Your primary place of residence will remain untaxed..
• Removal of VRT.