In our brief history as a modern economy no budget will so test us like this one. It is the ultimate litmus test of whether we’ve evolved into a mature democracy capable of putting our own house in order or whether we are to revert to type, putting a premium on the electoral cycle and handing the country over to pressure groups before eventually transferring it to the ECB or IMF. Will we get a hard headed economic budget or a slippery political one calculated to do a half job as Fianna Fail buy time and shore up market share for the June elections? Will we face the truth or will we face a fudge? We’ll know today. Here’s a list of ten top priorities.

1. Slash transactional taxes to encourage sales. That means cutting VAT and eliminating Stamp Duty entirely until the end of 2010. What’s the point in having 9% tax that nobody will pay in a falling housing market?

2. Commonsense tells us what must be done, hammering the economy with high taxes on work and success to avoid accepting that we must primarily cut spending, will extinguish the economy faster than any single measure. A top income rate which together with PRSI pushes over 50% will kill the incentive to earn more money by those that already pay most of income tax. So widen the income levy and hit the old reliables but don’t increase the top rate of income tax past the half way mark.

3. Inject further capital into banks but with severe conditions about unfreezing lending and set up a special asset recovery agency to strip out and manage bad debts.

4. Face the truth, we can’t afford our day to day spending. In the awful conundrum between protecting the most vulnerable, those on social welfare or protecting the least vulnerable, those with jobs and pensions for life, who are we to choose? We can’t fork out €20 billion on pay and the same again on social welfare. Scrap the dishonest pensions levy and call it what it is, a pay cut but this time apportion it properly. Abolish incremental pay increases based on longevity. Immediately replace increments with bonus pay for merit only.

5. Announce a voluntary redundancy and early retirement package for public sector employees. Tell the sector the truth, Irish public sector pay has to start gradually coming down to the same level as competing economies. Private sector pay is already rapidly adjusting. Start de-layering bureaucracy now. There are 49,000 administrators supporting 62,000 front liners in the Health system, that’s a crazy ratio heading towards one to one. Same in other sectors. Cull the number of agencies and cut Directors fees across the board to 2003 levels.

6. Widen the tax base. Having boosted property transactions by suspending stamp duty incrementally introduce a tax on investment properties. Don’t include holiday homes unless you’re prepared to go after pads in the sun. Introduce elegant not crude carbon taxes but offset with incentives.

7. Redirect capital spending to job dense activities like home energy efficiency but accelerate the delivery of these schemes. Free up the investment and banking finance bottleneck for strategic projects such as commercial wind farms and energy technologies. Introduce more not less tax incentives for R&D initiatives and the sciences for businesses especially those that gel with our universities.

8. Be very careful of reforming pensions without very clear understanding of the complexities and interlinks. Do not touch reform of private pensions especially for middle income earners unless you’re prepared to introduce a quid pro quo cap on public sector pensions. A thirty grand public sector pension is worth about a million Euros. Few private workers will ever reach those heady numbers so if you hit their incentive to save for retirement you must be prepared to cap public sector pensions at thirty grand a year.

9. Leadership is vital if you are to sell the package. That means steeply cutting pay and pensions to The President, the Taoiseach, the Ministers and eliminating all the perks like committee chairman and conveners fees.

10.; Sell us a vision of what we can be in the years ahead. Know the way, show the way and go the way.