Given the current market and economic conditions and the dire lack of credible economic policies (from any political party) aimed at moving Irish economy out of the combination of:
- deeply rooted crisis in public finances;
- structural collapse of the banking sector;
- stratospherically high and increasingly long-term unemployment levels;
- lack of significant gains in competitiveness (not limited to the area of wages competitiveness, but including basic utilities costs, and costs of living and doing business relating to state-controlled sectors);
- malfunctioning markets for provision of domestic services - dominated and restricted by the excessive market power of the incumbent state-owned and state-regulated oligopolies;
- a clear predominance of policy measures that are designed to saddle ordinary families and individuals (consumers and taxpayers) with the full cost of stabilizing vested interests and elites (manifesting themselves in rising tax burden, falling provision of public services, lack of reforms in banking and public sectors); and
- continued devastation of private entrepreneurship and businesses, contracting investment and lack of confidence in the future of the economy and broader social progress
Is Ireland's electorate ready for an alternative political and popular movement that would put the interests of consumers and taxpayers at the top of governance and policy agenda?
Irish democracy cannot be surrendered to the vested interests, no matter how broadly-based, and elites (no matter how meritocratic or mobile they might be).
The current crisis has clearly shown that the corporatist state - where a group of vested interests colludes with the Government and state structures to set economic and social parameters for development priorities - is morally, politically and economically bankrupt.
The only two ways forward from this status quo are
- a generations-long and exceptionally deep crisis of stagnation and declining standards of living, or
- a path of structural reforms aimed at realigning the current political system to serve the interests of consumers and taxpayers - aka - the ordinary citizens and residents of this land.
It is therefore, clear to me that at this point in time Ireland is on the cusp of either opting for change or electing to undertake decade (if not decades) long descent into the nightmare of economic stagnation.
In my view, the agenda of such a movement should include the following reforms:
1) Banking reforms:
- Banks should be recapitalized following Swedish model (imposing haircuts/equity swaps on bond holders; accepting correct amounts of writedowns; equity taking by the State in the name of taxpayers; equity to be held in a Trust for individual taxpayers until disbursal; at disbursal - equity sales proceeds to be rebated, net of cost to the taxpayers)
- Nama to be reversed
- Anglo Irish Bank and INBS to be shut down and their liabilities and assets to be wound up within 5 years
- All banks boards and senior management teams replaced within 3 months
- All banks middle management teams reassessed and rebuilt within 12 months
- FDIC insurance scheme to be set up for the future needs of the sector
- No future bailouts constitutional amendment to be put to a referendum to prevent a possibility of any future calls on taxpayers wealth from any private sector firm
- Flat tax to be enacted on all incomes (preliminary estimates suggest 15-17% tax rate) with no discretionary deductions, but a generous upfront deduction of 1/2 of the median wage to be made available to all earners, plus 1/5 median wage deduction per child.
- Provision of strong (current level -10%), but life-time capped welfare provisions. Life-time cap will allow any able bodied adult in the country to have access to a cumulative maximum of 7 years of welfare provisions over their life time. Provision of welfare supports to those unable to work due to health or family circumstances (e.g caring for the disabled relative etc) to continue without life-time limits.
- Strong support for the disabled and the elderly must continue
- Wages for politicians and all senior servants earnings are to be tied to the National Disposable Income (NDI) on per capita basis (pcNDI): Taoiseach=3.5 times pcNDI; Ministers=3 times pcNDI; senior civil servants=max 2.7 times pcNDI; TDs/Senators=2.5 times pcNDI and so on. If the country earns more in disposable income, then those running it should get a reward, otherwise, they will automatically bear the same burden as the rest of economy. No bonuses to be allowed and all pensions to be converted to Defined Contribution plans.
- Benchmark Government spending to 35% of GDP, with emergency spending not to exceed 37% of GDP in any given year, and a balanced budget over every 3 year period. This allows for small emergency spending boosts in recessions, but prevents spending sprees in elections etc
- All quangoes, except those with immediate independent oversight authority (e.g FR and Competition Authority) are to be abolished and their functions transferred to respective departments. Responsibility for governance and management must rest with the executive branch of the state - i.e. Government.
- There should be no taxation without representation - self-employed individuals who are fully tax compliant should have access to same unemployment benefits as anyone else.
- Tax system should be fully reformed to simplify existent taxation and ensure full compliance. This will include, in addition to the flat income tax - abolition of all indirect charges and taxes, other than direct user fees which will be fully ring-fenced to provide revenue necessary to maintain specific service (e.g. bin charges, water rates etc). VRT will be abolished. Any excise taxes will be set at a level required solely to support provision of services directly associated with the underlying consumption charged. For example, petrol levy will apply only to the amount required to support environmental programme related to CO2 abatement and improvement of the environment. It will not be allocated into the general budget. There will be a fully transparent tax on land values (LVT), but not a property tax. The revenue from LVT will be split 50:50 between central & local authorities and local authorities will be allowed a discretion to vary their rate of LVT within reasonable parameters. For example, if LVT is levied at 1% pa, then local authority can be allowed to charge between 0.25% and 0.5% as it deems suitable, while the central government will collect 0.5%. CGT and CAT will be abolished for all investments held for 5 years or longer to encourage longer term savings and investment.
- Core change to the Government model will be transparency and accountability based on automatic systems of disclosure and control that are not subject to tampering by individual ministers/politicians or civil servants
- Transparency: all state data/decisions/discussions not subject to secrecy of the state considerations will be published on the web and made accessible free of charge to all residents of the state. Commercially sensitive data will be published with exclusion of sensitive information and identifiers, until the time when it can be published in full. All data requested under FOI will be released free of charge to the requestee and will be automatically published also on the public web portal to remove any need for future FOI requests
- Accountability: performance and productivity metrics will be designed for all branches of public sector and wages and earnings in the public sector will be tied into these.
- Any attempts by public employees or office holders to undermine the principles of transparency and accountability in dealing with the public will be punished on the basis of publicly available procedures. All disciplinary actions against aforementioned employees or office holders will be made publicly available.
- Local authorities will be reformed, reducing the overall number of local authorities to 7, covering: West & North West, South, Greater Cork, Greater Dublin, Greater Limerick, Greater Galway and Border & Midlands.
- Seanad will be reformed (subject to referendum) to give it real powers of the upper chamber comparable to the US Senate. It will be elected directly by the people of Ireland, with equal representation of 5 senators from each of the 7 geographic region outlined above.
- Dail will be reformed - there will be no expenses, no additional pay for work in special committees (every TD will be required, subject to seniority to carry such work as a part of their duties). The number of TDs will be reduced to roughly 2/3rd of the current. TDs will be entitled to a defined contribution pension top up to their existent private pensions with the state matching 1:1 every euro they put into their pension.
- Members of the cabinet will have no drivers, state cars and there will be no Government jet. Members of the cabinet will qualify for a car allowance equivalent to €10,000 per annum. All members of the Oireachtas and Government traveling on official business will be reimbursed only to the full cost of the ticket for economy flight on any flight under 5 hours of length and business class for flights of longer duration. No employee of the State will be entitled to any travel reimbursement in excess of an economy class ticket.
- No member of the Oireachtas or employee of the state will be exempt from any of the standard tax codes or laws of this land. There can be no privilege for the servants of the public that the public itself cannot claim.
- All state purchasing will be carried on-line, made public and transparent.
- State will purchase services, such as health care, care for the elderly, disabled etc for those who cannot afford them, but the State will not own service providers. Instead, public companies will be mutualized or privatized and forced to compete directly for the custom of the people. Transition to such an arrangement will require significant reforms, but also support for current employees in training them in running a private/mutual/non-profit etc enterprises. This support will be provided.
- Higher education will be fees-based, with fees set by universities and overseen by the Department for Education. The State will set up (with participation of charities and other private agencies) a number of funds that will administer financial aid to students based on need (with an objective of creating an equal opportunity for all qualified students to undertake studies) as well as merit (with an objective of rewarding real achievement).
All suggestions welcomed & will be published, some will make it to the list as well (as always - with proper attribution). So engage with me on this one!