'Is it too early to start thinking about the post-IMF Second Republic?" The question was posed by former PD leader Des O'Malley in a letter to the Irish Times on Friday and the answer to that question has to be a resounding 'no'. It is absolutely essential that we begin immediately planning for the post-IMF era.

The arrival of the IMF delegation was indeed a black day for our republic but it was not – as was suggested last week – the blackest day in the history of the state. It was not worse than all the days thousands of children were sent to residential care and the state turned a blind eye to their appalling treatment; it was not worse than the day bombs struck Dublin and Monaghan with dreadful losses of life; it was not worse than the day Veronica Guerin was shot dead for doing her job; it was not worse than the day Roy Collins was murdered.

We will have to, at least temporarily, give up some of our economic sovereignty and that is very difficult to stomach. But it doesn't have to be the end of the world. It wasn't for Britain when they called in the IMF in 1976 and six years later were enjoying their greatest ever economic boom.

The fact that we will require some form of bailout is deeply embarrassing. And it goes without saying that it would have been far, far better if we hadn't got to this point. But now that we have, it's vital that we use it as an opportunity to reinvent our republic, something our political system has proved utterly incapable of doing.

The madness that went on during the Celtic tiger era has to be the first target. Heaven knows what the IMF will make of the salaries paid to our top politicians, civil servants and semi-state bosses. How could such a tiny state be paying the biggest wages in the world to ministers, secretary generals and to bosses of quangos and state agencies? How could chief executives of semi-states, operating virtual monopolies, be making up to €700,000 a year? How could the governor of the Irish Central Bank have been paid far more than the head of the US Federal Reserve? How could heads of tiny agencies have been making over €140,000 a year? Swingeing cuts in all those salaries are essential. The wage cuts at the higher end must also be applied to the pampered third-level sector, where pay far exceeds the rankings of Irish universities in global league tables.

Although public sector pensions will have to be cut, the hope is that there won't be any further reductions in the pay of public sector workers further down the scale. The Croke Park deal should be preserved, but only on the basis that the unions get the finger out and start delivering reforms and savings.

There can be no repeat of that recent nonsense surrounding the refusal to give up an antiquated custom where workers have half an hour to cash salary cheques that are no longer used. The culture whereby the public service is run for public servants first, and the public second, has to end.

The outrageous fees charged by the professions – which are well in excess of anywhere else in Europe – have to be addressed. The state should take a lead with the legal profession by halving the fees it pays out to lawyers. There will be howls of protest from esteemed senior counsel who will withdraw their services. Let them off and take on younger barristers who will be grateful for the work at what will still be hugely generous rates. Government departments should do the same with the big legal firms that are charging huge sums for their advice. The same should apply for accountants' and auditors' fees.

Hospital consultants should be told that their €200,000-plus contracts no longer apply and a new rate, more in line with the EU norm, should be negotiated. And no new republic can tolerate the blatant inequity of the two-tier health service – Fine Gael's universal insurance proposal could well be the answer.

The harsh reality is that our social welfare bill is simply not affordable. There is of course an onus to protect the most vulnerable but it is also the case that not everybody in receipt of social welfare payments falls into that category. Reform is needed to ensure welfare does not act as a deterrent to work and is targeted at those most in need – means testing of child benefit payments being the most obvious example.

Our tax system is far too narrow and is not generating enough revenue. A property tax exists in every country in Europe. It has to happen here, both as a means of raising revenue and of discouraging investment in property. The Commission on Taxation report should be dusted down and implemented en bloc. And the current system whereby half of all workers pay no income tax has to end. It is not financially sustainable and there is a strong civic argument that everybody should pay some tax, even if it is only a nominal amount for the lowest earners.

The wild swings between budgetary surpluses and deficits of the last 30 years cannot be tolerated, and to this end a fiscal council of wise men should be established to annually run the rule over the spending and taxation plans of the government of the day.

And if we are serious about reforming our republic, then our electoral system will have to be changed. It's not just about electing legislators rather than parish-pump politicians. Governments will continue to shirk making decisions if every election hinges on a couple of hundred votes, as routinely happens in Ireland. It gives vested-interest groups enormous powers at the expense of the public good.

It is not pie in the sky to talk about building a new republic from the current mess. Japan and West Germany enjoyed economic miracles after the devastation of the second world war and our position is nowhere near as critical. The unthinkable has happened. It's time for new thinking.

scoleman@tribune.ie