IF the Progressive Democrats form part of the next Government, they want to cut taxes, encourage further privatisation of the State sector and create a more supportive environment for business, says Mary Harney.

The party, which she claims is more "pro-business, pro-enterprise and pro-risk-taking" than any other, will insist on bringing its self-help philosophy to any new programme for government.

In advance of next week's Budget, the Ds are saying that if Mary Harney or one of her colleagues takes over Ruairi Quinn's finance portfolio, things will be radically- different.

Over the lifetime of a Government (assuming it stays in power for five years) the PDs says the standard rate of tax will be cut to 20 per cent with the top rate down to 40 per cent.

The party will also seek tighter control of Government spending and look at implementing policies that would effectively reduce the live register to 225,000 people over a five-year period. More privatisations would also be on the cards.

Her recipe for rejuvenating a pro-business economy is similar to that adopted in New Zealand some years ago by its Labour government. "That government slashed taxes and within a very short time generated 180,000 jobs, with virtually no grant aid to industry," she says. Similar in many ways to the Irish economy, both in terms of its resources and its dependency on agriculture, Ms Harney firmly believes the same approach would work here.

"Any society where you are better off not working, rather than working, is a sick one. We must get the tax system to a level that can sustain and support effort," she warns.

"I don't think we reward risk-takers or appreciate them in Ireland. There's an assumption that if you start your own business you're some class of a semi-criminal, or that you're a fat cat, but the vast amount of people in business find it very tough going."

Most entrepreneurs find they are operating in an environment that is very hostile, she says. "The State almost does everything it can to, stop rather than support Irish business.

Ms Harney says the Republic must seek a low-tax, high-incentive working environment.

With the national debt running at around £30 billion, the PD's warn that it is time to put our house in order.

The next Government will have to take a hard look at its options in terms of raising funds to reduce the heavy debt burden, and will have to face up to selling off more of the family silver, she says

Over the next-five years the State could realise up to £2 billion by selling off some semi-state companies and disposing of other viable assets, according to Ms Harney.

"ACC Bank, ICC Bank and the TSB are the three clear examples of companies that could be privatised," she says, with Aer Rianta also likely to come under the spotlight.

"Aer Rianta, for example is a very successful company running-shops in Karachi, St Petersburg and Bangkok but I don't think taxpayers should carry the risk for those ventures.

With such a huge national debt Ms Harney says it is time to adopt a more pragmatic approach to the State sector.

"Ireland's experience in privatising State companies has been a good one. The flotations of Irish Life and Greencore have been highly successful and no one today would suggest that they should be put back under State control."

The key to further privatisation is how it is handled, she believes. "It has to be done with the support of the workers," says Ms Harney. Workers should be entitled to take up preferential shares in any privatised venture, she believes.

"We have to ask ourselves what is the role of the State. If it owes £30 billion does it need to hold onto these companies - particularly when the State taxes work so heavily?"

Each semi-state would have to be assessed individually, she says. In the case of the ESB, Ms Harney says the national grid should remain firmly under State control.

She would prefer to see as many State-owned companies as possible remaining in Irish ownership, and envisages a key role for Irish pension funds in supporting these enterprises.

This Government's endorsement of strategic alliances in companies like Telecom Eireann, she believes is inherently flawed and has left them vulnerable.

"The consortium that's gone into telecom, for example, will be able to take it over in a few years. Comsource, (the consortium comprising KPN and Telia) got its Telecom share at a knock-down price and it has the first option to take it over completely."

Ms Harney favours a combination of bringing in investors or floating some State companies on the Irish Stock Exchange. Such a move she says would greatly enhance the Dublin market, giving investors wider options while keeping vast sums of money invested in the domestic economy.

"We have well-managed pension funds and I think it's a crying shame that there are so few opportunities for such funds to be invested at home."

On European Monetary Union, the PDs will be pushing a more cautious line than that of the current administration. The party remains less than convinced about the benefits for the Irish economy of EMU if Britain remains outside a single currency.

Our attitude to European projects is sometime unrealistic, Ms Harney says. "While Europe has been very good to us and good for us, I think we need to stand back and ask ourselves can we really join EMU if Britain stays out."

The Government should strive to meet the Maastricht criteria, she adds, to ensure continued discipline in the management of the economy. But she insists that we cannot afford to be indifferent about Britain's role in the project.

"I do not believe we can ignore our nearest and biggest trading partner. Even though our dependency on the British economy has declined, it's still by far our biggest trading partner."

A final decision on whether Ireland becomes part of EMU, Ms Harney says, cannot be taken in the absence of a comprehensive analysis of the repercussions for the Irish economy of Britain going it alone.

"This has never been done at an official level. We're moving along at a pace that I find quite frightening sometimes. We are not considering the consequences. We have to keep an open mind and assess our options much closer to the event."

Ms Harney says it is "unrealistic" to think that Ireland can survive in a German-based currency union if Britain is excluded.

How many of her policies she actually gets to implement is a matter which will be in the hands of the electorate. Although some of the finer details of her economic policies could be open for discussion she is adamant that the party's line on taxation is strictly non-negotiable.