There are increasing concerns about Ireland's competitiveness.
Commentators such as David McWilliams have said it would be nice if we still had the punt, as we could devalue it and thus restore competitiveness.
However that radical solution is fraught with problems.
Instead the government should introduce a 10% income levy on all income and all employees. The revenue from this would immediately be rebated to the employers.
This would mean that everyone would take a 10% pay cut - so the collective action problem would be solved. 5% this year, 5% next year (or maybe all at once- timing and amount subject to econometric analysis)
There would be some issues to sort out regards the self employed: they'd have to prove they were using the rebate to cut their prices. Yes there'd be a small "deadweight" cost of administration associated with this tax, but I don't think it would be too high. Overall it would reduce our competitiveness, which will be vital to retain jobs from foreign companies - and attract more investment.
If any company felt they didn't need the rebate: they could just use it to increase the wages of their staff.
And other measures would remain needed for the fiscal adjustment (realigning PS pay with private sector, cutting dole and other spending etc)... as well as a 10% cut to the minimum wage & social welfare