Some public sectors workers in England have been protesting today because of changes to their pensions. Despite increasing their pensions contributions by 3% and increasing their retirement age from 60 to 65 years, the UK government plans to reduce their pensions when they retire. The government initially claimed that the current arrangement was not affordable. However, when it was pointed out that affordability was not a problem, the government changed its tune and stated that they wanted to bring parity between public and private sector.
What does this really mean and what are the issues?
The private sector has been gradually eroding or eradicating pensions for workers in that sector and in cahoot with the government increasing retirement age. (Senior managers and directors in the private sector, however, continue to enjoy lucrative subsidised pensions and retire early.) The government argue that because of pension changes in the private sector it has to change pensions in the public sector. This only make sense in that the government can reduce public expenditure, and in the private sector companies can increase their profits and in doing so give generous dividends to their shareholders. In doing so the rich gets richer even in this time of economic downturn and the less well off becomes poorer, the economic disparity widens. The consequences of these profit orientated greedy approaches will surely have an effect on national economies in future as poverty expands in the rich and developed world. Sufferings in old age for many hard workers will increase. Will it then be resolved through public expenditure and at a high cost? Does it really make economic sense on the whole?
Instead of reducing workers pensions in both the private and public sectors and increasing poverty in old age, would it not make more sense for these governments in the rich and developed world to have a truly fair poverty eradicating pensions policy across the board that would apply equally to both the public and private sectors including senior managers and directors? These policies would need to be properly administered and regulated unlike the banks. However, I believe that such a system would create a happier, more fulfilling, harder-working and stronger society and nation and would benefit globally. Let's work towards a happier and fairer world.
This is obviously one view. I would very much welcome comments from readers to ensure a fair debate.
Good Bye and Good Luck until the next time.
Knight Owl
Thursday, 30 June 2011
Saturday, 19 February 2011
"The Big Society?"
The UK government, particularly the Prime Minister is passionate about and determined to create "The Big Society" in the United Kingdom. Among the many debates with regards to the subject, the first is the meaning of the term. What does "big society" really means. Nobody seems to be clear about it. Everybody including the Prime Minister and his cabinet have got their personal reality and interpretation but are unable to clearly communicate it. It appears though that "The Big Society" is about people volunteering to help others.
I would agree that over the years people have become selfish and society has as a whole become more disintegrated and self-centred. This has worsened in the last twenty years or so where an emphasis has been on individual achievement whether as a person or an organisation. This emphasis has been promoted by governments in most developed and developing countries. Therefore, selfishness and greed has flourished, and society and individuals caring for each other has diminished. Care or caring as such has become a commodity based on market economy. If you are rich or can afford it, you can buy the care or caring you or your loved ones need. If you can't afford it you may do the best you can and tough luck be your friend.
In the UK up to now, the state has some statutory responsibility for caring for people in need. This has been available through national and/or local organisations. These organisations have been funded and managed by the state. The funding has come from tax revenue raised by the state. For example, the National Health Service has been responsible for providing health care to those who needed it free at the point of delivery. National Insurance provides towards unemployment benefits, sickness benefits and state pension. Revenue from taxation also help local authorities make social and welfare provisions at a local level. Although these are state funded and managed services, in the last twenty years, the private and voluntary sectors have also benefited by being contracted to provide some of these services.
However, because of the fiscal deficit the state has accrued in the last few years and the government's haste in reducing this deficit, the government is drastically cutting back the funding that these state run services and organisations have had in the past. This means that these services have to be trimmed accordingly. At the same time, the government is also reforming some of the national institutions, the main one being the National Health Service. Whatever happens, the needy will still be there. It was initially envisaged that the private sector will be able to fill this gap. However, as there is very little money and some services are not profitable for the private sector, it is highly likely that they will only take on the profitable services. A big chunk of unprofitable services will be left unattended.
In my opinion, this is where the "Big Society" comes in. The idea is that those people who have lost their jobs and those who haven't, volunteer to to fill the gap created by the state reforms and state withdrawal from public services as a result of the funding crisis. The services that get rejected by the private sector and can't be run by the state sector because of lack of funding will hopefully be taken on by the voluntary sector. In principle the idea is very good. However, the process of getting it implemented is very poor because it is ill defined and generally lacking in coherence. There is also a misguided expectation that it will be adopted willingly by the voluntary sector despite the fact that there are no funding or support identified for this process.
Another problem is that it appears to be dividing society in two separate groups. There is a rich well to do group who continues to enjoy their riches and lead a jolly carefree life. Tax loopholes are created so they can get away with paying as little tax as possible. Whilst they contribute little, they continue to benefit from universal goods and services. The other poorer group in comparison is taxed to the hilt, their services curtailed and they are asked to form a "big society" and take care of themselves. And while they do so the state distances itself from them whilst aligning with the rich.
The "Big Society" can work but only if we are all in together. The poorer group doing the work whilst the richer group hand over some of their monies to fund the projects.
WHAT WE NEED IS SOME GOOD OLD FASHIONED PHILANTHROPY not just empty rhetorics!
Good bye and good luck until the next time
I would agree that over the years people have become selfish and society has as a whole become more disintegrated and self-centred. This has worsened in the last twenty years or so where an emphasis has been on individual achievement whether as a person or an organisation. This emphasis has been promoted by governments in most developed and developing countries. Therefore, selfishness and greed has flourished, and society and individuals caring for each other has diminished. Care or caring as such has become a commodity based on market economy. If you are rich or can afford it, you can buy the care or caring you or your loved ones need. If you can't afford it you may do the best you can and tough luck be your friend.
In the UK up to now, the state has some statutory responsibility for caring for people in need. This has been available through national and/or local organisations. These organisations have been funded and managed by the state. The funding has come from tax revenue raised by the state. For example, the National Health Service has been responsible for providing health care to those who needed it free at the point of delivery. National Insurance provides towards unemployment benefits, sickness benefits and state pension. Revenue from taxation also help local authorities make social and welfare provisions at a local level. Although these are state funded and managed services, in the last twenty years, the private and voluntary sectors have also benefited by being contracted to provide some of these services.
However, because of the fiscal deficit the state has accrued in the last few years and the government's haste in reducing this deficit, the government is drastically cutting back the funding that these state run services and organisations have had in the past. This means that these services have to be trimmed accordingly. At the same time, the government is also reforming some of the national institutions, the main one being the National Health Service. Whatever happens, the needy will still be there. It was initially envisaged that the private sector will be able to fill this gap. However, as there is very little money and some services are not profitable for the private sector, it is highly likely that they will only take on the profitable services. A big chunk of unprofitable services will be left unattended.
In my opinion, this is where the "Big Society" comes in. The idea is that those people who have lost their jobs and those who haven't, volunteer to to fill the gap created by the state reforms and state withdrawal from public services as a result of the funding crisis. The services that get rejected by the private sector and can't be run by the state sector because of lack of funding will hopefully be taken on by the voluntary sector. In principle the idea is very good. However, the process of getting it implemented is very poor because it is ill defined and generally lacking in coherence. There is also a misguided expectation that it will be adopted willingly by the voluntary sector despite the fact that there are no funding or support identified for this process.
Another problem is that it appears to be dividing society in two separate groups. There is a rich well to do group who continues to enjoy their riches and lead a jolly carefree life. Tax loopholes are created so they can get away with paying as little tax as possible. Whilst they contribute little, they continue to benefit from universal goods and services. The other poorer group in comparison is taxed to the hilt, their services curtailed and they are asked to form a "big society" and take care of themselves. And while they do so the state distances itself from them whilst aligning with the rich.
The "Big Society" can work but only if we are all in together. The poorer group doing the work whilst the richer group hand over some of their monies to fund the projects.
WHAT WE NEED IS SOME GOOD OLD FASHIONED PHILANTHROPY not just empty rhetorics!
Good bye and good luck until the next time
Friday, 21 January 2011
Is the irresponsible banking system easing or worsening the economic crises?
Nearly every nation on our planet has been affected by the irresponsible bankers and the banking system. Many national governments used billions of ordinary taxpayers money to bail these banks out of their bankruptcy. Many ordinary people lost their homes, their jobs and their self-respect because of the governments and bankers lack of diligence. However, in a psychopathic manner, these bankers continue with their reckless behaviour. The bonus culture and some of the reckless trading continue as before.
The people of the countries that bailed the bank are still paying through a reduction in their standards of living by the fact that goods are services are dearer, taxes are higher and wages have been cut. The bankers, Oh No!, they continue to enjoy their luxuries. Government fiscal policies are leading to job cuts and higher unemployment which in turn will reduce growth and revenue. The consequences can only be a deep and long period of recession with increasing inflation and cost of living.
The reason for the banking crisis was attributed to the lack of banking regulations. It has remained an international rhetoric as no nation has taken any action to come up with any regulatory measures. Although previous governments are blamed for removing or easing regulations; governments voted in since, regularly complain about the lack of regulations but are doing nothing to rectify the situation.
Will it make a difference if alongside fiscal measures banking regulatory measures are also implemented?
Good bye and good luck until the next time.
Peter
The people of the countries that bailed the bank are still paying through a reduction in their standards of living by the fact that goods are services are dearer, taxes are higher and wages have been cut. The bankers, Oh No!, they continue to enjoy their luxuries. Government fiscal policies are leading to job cuts and higher unemployment which in turn will reduce growth and revenue. The consequences can only be a deep and long period of recession with increasing inflation and cost of living.
The reason for the banking crisis was attributed to the lack of banking regulations. It has remained an international rhetoric as no nation has taken any action to come up with any regulatory measures. Although previous governments are blamed for removing or easing regulations; governments voted in since, regularly complain about the lack of regulations but are doing nothing to rectify the situation.
Will it make a difference if alongside fiscal measures banking regulatory measures are also implemented?
Good bye and good luck until the next time.
Peter
Thursday, 6 January 2011
Is Current State Management of the Economy Fair or Foul?
Most governments are adopting austerity measures to address the worldwide economic downturn. The cause of the downturn is not being examined and rectified leaving the world to face another similar crisis in the future. Despite that, are the austerity measures fair on the nation or is it foul?
The people who are being made to pay for the downturn are those who had very little to do with the downturn. They are mainly hard-working people who are paying through their blood, sweat and tears. They are being forced to accept pay cuts and pay more for the essential goods and services they need. In the United Kingdom, mainly in England, even small companies are losing out. Many of them are going or likely to go out of business because public services are having to make huge savings. Many of these small companies have public services contracts that they are losing or likely to lose. Up to half a million people are also likely to lose their jobs in this upheaval.
One can understand why the British Government's thought that the best way of raking in tax was through an increase in VAT. This has gone up from 17.5 to 20% from the 4th of January 2011. If unemployment is likely to increase by half a million then income tax revenue from these people will also be lost. There was a Labour Party plan for increasing national insurance, a tax on jobs. Again one can understand that if half a million people are going to lose their jobs a tax on jobs is not going to be beneficial. The double hit of an increase in unemployment and a reduction in most working people's wages are both going to have a negative impact on income tax. Hence the attraction of increasing VAT. People will have no choice but pay this extra tax.
What I can't understand is how the adopted austerity measures are actually going to solve the current problems. All the measures being taken will reduce the money that goes around and drives industry. There is no point in industry producing goods that people can't afford. This is likely to cause a stagnation in the market and the economy and we are less likely to come out of the recession through these measures.
The British government suggests that by looking after the entrepreneurs, they are helping the entrepreneurs to create jobs and riches. This is only likely to happen in essential industries such as food productions, utilities, and energy, and essential travel. People will still need to eat and drink, use essential transport, and use gas, water and electricity. This will be more so in countries where heating is essential in winter. Some entrepreneurs are likely to get rich but most people and national coffers are going to get poorer. The Republic of Ireland is a prime example despite the fact that they only have a 12% corporation tax. It must also not be forgotten that rich entrepreneurs are the ones most adept at using tax avoidance loopholes to keep as much of the money they make for themselves. Several examples have recently been cited in reputable UK newspapers.
I am sure there are other convincing opinions on this issue.
Good Bye and Good Luck until the next time.
The people who are being made to pay for the downturn are those who had very little to do with the downturn. They are mainly hard-working people who are paying through their blood, sweat and tears. They are being forced to accept pay cuts and pay more for the essential goods and services they need. In the United Kingdom, mainly in England, even small companies are losing out. Many of them are going or likely to go out of business because public services are having to make huge savings. Many of these small companies have public services contracts that they are losing or likely to lose. Up to half a million people are also likely to lose their jobs in this upheaval.
One can understand why the British Government's thought that the best way of raking in tax was through an increase in VAT. This has gone up from 17.5 to 20% from the 4th of January 2011. If unemployment is likely to increase by half a million then income tax revenue from these people will also be lost. There was a Labour Party plan for increasing national insurance, a tax on jobs. Again one can understand that if half a million people are going to lose their jobs a tax on jobs is not going to be beneficial. The double hit of an increase in unemployment and a reduction in most working people's wages are both going to have a negative impact on income tax. Hence the attraction of increasing VAT. People will have no choice but pay this extra tax.
What I can't understand is how the adopted austerity measures are actually going to solve the current problems. All the measures being taken will reduce the money that goes around and drives industry. There is no point in industry producing goods that people can't afford. This is likely to cause a stagnation in the market and the economy and we are less likely to come out of the recession through these measures.
The British government suggests that by looking after the entrepreneurs, they are helping the entrepreneurs to create jobs and riches. This is only likely to happen in essential industries such as food productions, utilities, and energy, and essential travel. People will still need to eat and drink, use essential transport, and use gas, water and electricity. This will be more so in countries where heating is essential in winter. Some entrepreneurs are likely to get rich but most people and national coffers are going to get poorer. The Republic of Ireland is a prime example despite the fact that they only have a 12% corporation tax. It must also not be forgotten that rich entrepreneurs are the ones most adept at using tax avoidance loopholes to keep as much of the money they make for themselves. Several examples have recently been cited in reputable UK newspapers.
I am sure there are other convincing opinions on this issue.
Good Bye and Good Luck until the next time.
Friday, 10 December 2010
Tuition Fees or Graduate Tax
It is ridiculous that hypocritical adults who received free University Education and are in line for the best pension schemes in the United Kingdom are more or less dictating that future students pay for their education through a life time of debt. Is this punishment or what?
My suggestion is that all persons born after 1955 and who benefited from free university education should now pay a 2% graduate tax on their income for the free education they received. Current students will have to do the same in future and so on. This method should continue to fund university education for years to come and it should be free at the point of delivery. All loans paid by recent students should be refunded and all outstanding loans should be cancelled.
Well educated people benefit society as a whole and in my opinion this is the fairest mean to address it. I am surprised that the Labour Party which calls itself the party of fairness has not come up with this way of funding universities. I see no point of students having to take loans for their education when they already have to pay for their accommodation and living allowance.
Let's hope that there is someone with sufficient authority who can act on this. Unless Student Fees is about making the rich Money Lenders richer.
My suggestion is that all persons born after 1955 and who benefited from free university education should now pay a 2% graduate tax on their income for the free education they received. Current students will have to do the same in future and so on. This method should continue to fund university education for years to come and it should be free at the point of delivery. All loans paid by recent students should be refunded and all outstanding loans should be cancelled.
Well educated people benefit society as a whole and in my opinion this is the fairest mean to address it. I am surprised that the Labour Party which calls itself the party of fairness has not come up with this way of funding universities. I see no point of students having to take loans for their education when they already have to pay for their accommodation and living allowance.
Let's hope that there is someone with sufficient authority who can act on this. Unless Student Fees is about making the rich Money Lenders richer.
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