We apply a spherical harmonic analysis to the Point Source Redshift Survey ( PSCz ) , to compute the real-space galaxy power spectrum and the degree of redshift distortion caused by peculiar velocities . We employ new parameter eigenvector and hierarchical data compression techniques , allowing a much larger number of harmonic modes to be included , and correspondingly smaller error bars . Using 4644 harmonic modes , compressed to 2278 , we find that the IRAS redshift-space distortion parameter is \beta = 0.39 \pm 0.12 and the amplitude of galaxy clustering on a scale of k = 0.1 h { Mpc } ^ { -1 } is \Delta _ { gal } ( 0.1 ) = 0.42 \pm 0.02 . Combining these we find the amplitude of mass perturbations is \Delta _ { m } ( 0.1 ) = ( 0.16 \pm 0.04 ) \Omega _ { m } ^ { -0.6 } . A preliminary model fitting analysis combining the PSCz amplitudes with the CMB and abundance of clusters yields the cosmological matter density parameter \Omega _ { m } = 0.16 \pm 0.03 , the amplitude of primordial perturbations Q = ( 8.4 \pm 3.8 ) \times 10 ^ { -5 } , and the IRAS bias parameter b = 0.84 \pm 0.28 .