Colm McCarthy’s slides for the conference Post author By Philip Lane Post date January 12, 2009 McCarthy Crisis Publish at Scribd or explore others: Economics Business irish economy Categories In Crisis Conference 2 Comments on Colm McCarthy’s slides for the conference ← Macroeconomics and the international economy → Climate policy will be less expensive than previously thought 2 replies on “Colm McCarthy’s slides for the conference” I like to throw in my own approach, fisr published in the Irish Times on Monday, December 22, 2008 A prescription for recovery Fifty years ago Ken Whitaker, in Economic Development , highlighted the need for the Irish economy to become internationally competitive. A few weeks ago Frances Ruane of the ERSI reiterated our current urgent need to regain competitiveness. Here are three ideas that might be worth considering: 1. The social partners should agree to set aside the current pay agreement and instead agree an across-the-board reduction of 10 per cent in wages and salaries for a period of three years. 2. In return, the Government should immediately cut all VAT, VRT, and Stamp Duty rates by 30 per cent. It should also reduce duty on alcohol, tobacco and fuel by 10 per cent. 3. All financial institutions in the State should agree on a no-fee basis to set up a special savings account for every person in the State. Everyone could lodge as much money as they wish to their account and would be paid the current ECB rate tax-free by the Government. Withdrawals could take place at any time and tax-free payments would be made quarterly. At the end of each year the Government would top up each account by an agreed percentage and basically the longer money was kept in an individual’s account the more value the Government would add to each account. The Government would have the full use of the total balance of all the accounts in the State to help the public finances. Further incentives would be given by the Government for individuals wishing to transfer the balance of their account to an approved pension product at any time. If the above were agreed I believe it would send a very serious message to multinationals, indigenous companies and start-up companies that we in Ireland were determined to regain our competitiveness. It would seriously encourage investment, create jobs into the future and over time would increase tax revenue. The immediate effect would be to reduce the public-sector pay bill and provide additional money from within the State to reduce the public borrowing requirement. In addition, the reduction in tax rates combined with the competitive environment would hopefully kick-start the economy through consumer demand. – Yours, etc, WILLIE McCARTER, Buncrana, Co Donegal. Thanks for sharing all of your expertise with us out here in cyberland. It’s very much appreciated. Comments are closed.