“THE END OF THE AGE OF ENTITLEMENT”
ADDRESS TO THE INSTITUTE OF ECONOMIC AFFAIRS LONDON 17 APRIL 2012
JOE HOCKEY MP
THE END OF THE AGE OF ENTITLEMENT
INSTITUTE of ECONOMIC AFFAIRS
LONDON
This document discusses the myths surrounding taxation and benefits in the UK welfare state. It argues that those with lower incomes actually pay a larger share of their income in taxes due to regressive taxes like VAT. Meanwhile, benefits have been reduced to inadequate levels that trap people in poverty rather than help them find work. Growing inequality is also problematic, as more equal societies tend to fare better overall. The document calls for challenging myths, fairer taxation, better jobs, and policies that reduce inequality in order to establish "a society for people" as envisioned by past advocates for a fair welfare state.
This document summarizes and analyzes the state of retirement in the United States. It argues that while there is a real retirement crisis due to unsustainable social programs, there is also an overstated "fake" crisis about individuals not saving enough. The real crisis stems from promising more retirement benefits than can be afforded. Possible solutions include cutting benefits, raising taxes, pursuing economic growth, or using inflation to reduce the impact of debt obligations. Inaction will only make reforms more difficult.
- Illinois is facing a $15 billion budget deficit and the state legislature has approved a 66% income tax increase to help address it.
- The tax increase will help the state pay off unpaid bills that have driven some companies bankrupt. However, the tax increase could drive some businesses to neighboring states with lower taxes.
- Neighboring state governors see the tax increase as an opportunity to attract more businesses across state borders, further pressuring Illinois' economy.
This document calls citizens to action against large banks and corporations. It argues that banks like Bank of America and JPMorgan Chase pay no income taxes, while the middle class loses wealth and opportunities. Unemployment and foreclosures are high. It claims the financial system is rigged in favor of the wealthy, and special interests control Washington at the expense of average Americans. The document urges monetary reform, arguing that governments should control currency issuance rather than private banks, and that fractional reserve banking allows excessive money creation. It asserts major historical figures warned of the dangers of private banking control over economies.
The document summarizes and responds to arguments made in a Florida state budget debate. It argues that the state Senate and media are wrongly advocating for tax increases to fund additional government spending, while the House and Governor correctly want to keep taxes low and "live within the state's means." The document asserts that Florida's economic growth is best encouraged by cutting taxes, not raising them, and that spending on education and Medicaid is unsustainable without reforms to introduce competition and efficiencies.
Politicians will face major voter backlash if they advocate cuts in Social Security benefits or choose deficit reduction over job creation, according to a poll by Greenberg Quinlan Rosner commissioned by the Campaign for America’s Future and Democracy Corps, with support from MoveOn.org; the American Federation of State, County and Municipal Employees, and the Service Employees International Union.
Tipping Point On Distrust Of Government Scott S Powell And Robert J Herbold...Scott Powell
The article argues that a tipping point has been reached where the American people deeply distrust the government and its legislative process. It claims that the government has become too focused on collectivism and expanding its role, undermining personal responsibility and choice. The piece advocates for health care reform that relies less on increased government bureaucracy and spending and more on free market principles and individual choice.
This document discusses the myths surrounding taxation and benefits in the UK welfare state. It argues that those with lower incomes actually pay a larger share of their income in taxes due to regressive taxes like VAT. Meanwhile, benefits have been reduced to inadequate levels that trap people in poverty rather than help them find work. Growing inequality is also problematic, as more equal societies tend to fare better overall. The document calls for challenging myths, fairer taxation, better jobs, and policies that reduce inequality in order to establish "a society for people" as envisioned by past advocates for a fair welfare state.
This document summarizes and analyzes the state of retirement in the United States. It argues that while there is a real retirement crisis due to unsustainable social programs, there is also an overstated "fake" crisis about individuals not saving enough. The real crisis stems from promising more retirement benefits than can be afforded. Possible solutions include cutting benefits, raising taxes, pursuing economic growth, or using inflation to reduce the impact of debt obligations. Inaction will only make reforms more difficult.
- Illinois is facing a $15 billion budget deficit and the state legislature has approved a 66% income tax increase to help address it.
- The tax increase will help the state pay off unpaid bills that have driven some companies bankrupt. However, the tax increase could drive some businesses to neighboring states with lower taxes.
- Neighboring state governors see the tax increase as an opportunity to attract more businesses across state borders, further pressuring Illinois' economy.
This document calls citizens to action against large banks and corporations. It argues that banks like Bank of America and JPMorgan Chase pay no income taxes, while the middle class loses wealth and opportunities. Unemployment and foreclosures are high. It claims the financial system is rigged in favor of the wealthy, and special interests control Washington at the expense of average Americans. The document urges monetary reform, arguing that governments should control currency issuance rather than private banks, and that fractional reserve banking allows excessive money creation. It asserts major historical figures warned of the dangers of private banking control over economies.
The document summarizes and responds to arguments made in a Florida state budget debate. It argues that the state Senate and media are wrongly advocating for tax increases to fund additional government spending, while the House and Governor correctly want to keep taxes low and "live within the state's means." The document asserts that Florida's economic growth is best encouraged by cutting taxes, not raising them, and that spending on education and Medicaid is unsustainable without reforms to introduce competition and efficiencies.
Politicians will face major voter backlash if they advocate cuts in Social Security benefits or choose deficit reduction over job creation, according to a poll by Greenberg Quinlan Rosner commissioned by the Campaign for America’s Future and Democracy Corps, with support from MoveOn.org; the American Federation of State, County and Municipal Employees, and the Service Employees International Union.
Tipping Point On Distrust Of Government Scott S Powell And Robert J Herbold...Scott Powell
The article argues that a tipping point has been reached where the American people deeply distrust the government and its legislative process. It claims that the government has become too focused on collectivism and expanding its role, undermining personal responsibility and choice. The piece advocates for health care reform that relies less on increased government bureaucracy and spending and more on free market principles and individual choice.
Larry Ellison of Oracle and Kurt Matsumoto of Pulama Lāna'i are developing 150 rental homes on Lāna'i island, with 49% being market rate and 51% being affordable housing. The development will include both affordable rental homes for those earning below the area median income, as well as market rate rentals and homes available for purchase. Affordable housing continues to be an important issue in Hawaii, where housing costs are among the highest in the nation and many workers cannot afford market rate housing costs even when working full time.
The document discusses strategies for building sustainable rural economies through community-owned enterprises. It proposes establishing a regional food production hub called the Republic Food Enterprise Center to address gaps in the local food supply chain. The center would work with area farmers, stabilize seconds and surplus crops, produce value-added foods, and partner with end buyers. A worker cooperative model is suggested to create local jobs and wealth. The goal is to leverage existing community assets to develop a self-sufficient and resilient local food system.
This document outlines the political economy of Zimbabwe under Robert Mugabe's authoritarian rule and proposes strategies for civil society to promote liberation. It describes how ZanuPF has co-opted state institutions and the repressive political environment. Four future scenarios for 2018 and beyond are presented: a democratic transition, continued authoritarian rule, state fracture, or economic collapse. It calls for civil society to unite, mobilize citizens non-violently, and form a viable political alternative to enact positive reforms through competitive politics and grassroots pressure. Specific strategic steps are recommended to undermine the illegitimate regime and work towards justice, reconciliation and a new economic path for Zimbabwe.
AEC, KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2013 na tému Šetriť alebo
nešetriť: Zachránia Európu len úsporné opatrenia?, ktorá sa konala dňa 7.
júna 2013 v Bratislave. Ďalšie súvisiace informácie nájdete na
www.konzervativizmus.sk
AEC, in cooperation with the Conservative Institute and INESS, and in
association with international partners organized the Free Market Road
Show 2013 in Bratislava on June 7, 2013. More information at
www.institute.sk.
202859367-Worker-CooperativeWorker-Cooperatives-for-New-York-City-A-Vision-fo...Krystal Tena
This document examines worker cooperatives as a potential solution to income inequality in New York City. It finds that worker cooperatives, which are businesses owned and democratically operated by employees, can increase wages and benefits for low-income workers compared to traditional businesses. However, public support and policies to promote worker cooperatives in New York City have been limited. The document recommends that the city support and invest in growing the local worker cooperative movement through various agencies to help address poverty and economic disparities.
Minimum Wage and Negative Income Tax as Means of Poverty AlleviationElad Wind
The document discusses minimum wage and negative income tax as means of poverty alleviation. It argues that minimum wage increases unemployment and does not effectively help the poor. It proposes negative income tax as a better alternative, where the government provides direct cash payments to low-income individuals and families. Experiments with negative income tax in the US in the 1960s and 70s found it reduced work incentives but was more efficient than traditional welfare programs.
Why the portuguese public debt is not payableGRAZIA TANTA
There has been “not one historical incidence” where austerity policies have led a country to get out from under a heavy debt burden.
Ashoka Mody, former IMF chief for mission to Ireland
Summary
Conclusions
1 – The debt is an instrument of domination.
2 – A partnership between States and Capitalists
3 - Portugal – Scenarios for a continued debt payment
3.1 – Proactive and radical continuation (Hypothesis I)
3.2 – A proactive amortised continuation (Hypothesis II)
3.3 – A prolonged continuation (Hypothesis III)
4 – An evaluation of the debt instalment not to be paid
5 – How to get out of this?
AEC, KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2013 na tému Šetriť alebo
nešetriť: Zachránia Európu len úsporné opatrenia?, ktorá sa konala dňa 7.
júna 2013 v Bratislave. Ďalšie súvisiace informácie nájdete na
www.konzervativizmus.sk
AEC, in cooperation with the Conservative Institute and INESS, and in
association with international partners organized the Free Market Road
Show 2013 in Bratislava on June 7, 2013. More information at
www.institute.sk.
Fair Economics begins with Fair Taxation. This presentation breaks the stranglehold of the current Right/Left debate on taxation and offers a new perspective. The presentation is brought to you by the Fairness Coalition.
The document argues that the current federal budget deficit and debt levels are unfairly blamed on ordinary Americans, who did not cause the issues. It claims the true causes were decades of bad economic policies, including unjustified wars, outsourcing of jobs, tax cuts for the wealthy, financial deregulation, and stagnating middle-class incomes. Resolving the debt crisis requires addressing the underlying economic crisis first through solutions that help, not penalize, average Americans, rather than continuing policies advocated by those responsible for the problems. Fair debt policy should not scapegoat citizens for issues they did not create.
100 Answers to 20 Questions – Havant Parliamentary CandidatesHayling Island
This document contains 20 questions posed to parliamentary candidates in the Havant constituency and 100 word answers from 5 candidates: Alan Mak (Conservative), Tim Dawes (Green), Dr Graham Giles (Labour), Steve Sollitt (Liberal Democratic), and John Perry (UK Independence Party).
The questions cover a range of national issues like defence spending, the economy, environmental regulations, the NHS, education, taxation, the EU, and constitutional reform in the UK. The candidates provide their perspectives on these issues and how they would address them if elected. Local issues discussed include priorities for Havant and Hayling like jobs, schools, and community development.
Economic Fairness demands a coherent and reasonable Jobs Policy. In Washington today, our leaders argue about what's not important and ignore the fact that America's unemployment situation is the worst we've seen since the Great Depression. It's time to get the dialog on the right track and start talking about what's important. It's time for new ideas. This presentation is brought to you by The Fairness Coalition and is part of a series covering our principles and key policy positions.
The document discusses the challenges facing UK energy policy regarding achieving a low carbon, secure, and affordable energy system. It argues that the UK faces an impending energy capacity crunch due to aging infrastructure and a lack of long-term planning. It also discusses the need to tackle climate change through ambitious carbon reduction targets while ensuring energy security and affordable costs. The document proposes that Labour should support more ambitious carbon reduction targets set by an independent committee. It also proposes that government subsidies and guarantees for new energy infrastructure be reciprocated with equity stakes in the projects.
The document discusses advocacy strategies for the nonprofit sector. It notes that the nonprofit sector has strengths like favorable public opinion and existing relationships with officials that can be leveraged. However, it says the sector could be more effective by developing shared long-term goals, improving coordination, and increasing its visibility and influence with officials. The document advocates for strong leadership to create a unified strategy that enables nonprofits to better serve communities and create a favorable policy environment.
A Test Of Policies: Wisconsin Vs Illinoisradarbutane60
- Wisconsin passed Act 10 in 2010 which limited collective bargaining for public sector unions except for police and firefighters. This has helped reduce spending on benefits for public sector workers and helped balance Wisconsin's budget without major cuts to services.
- In contrast, Illinois has not passed similar reforms and faces major pension payment obligations and budget deficits as a result of benefits promised to public sector unions. Chicago faces $615 million in pension payments alone for this year's budget.
- The reforms in Wisconsin have helped reduce healthcare and pension costs for local schools by an estimated 45% by 2020 while Illinois continues to struggle with the costs of benefits promised to public sector unions.
The document summarizes the National Federation of Independent Business's opposition to New York Governor Paterson's proposed "Soda Tax." In 3 sentences: The NFIB argues that higher taxes do not make people or the economy healthier and will hurt small businesses and consumers. They claim the tax is really about generating revenue to plug budget deficits and appease unions, not health, and will set a precedent for more "sin taxes." The group calls on lawmakers to show leadership through budget cuts rather than burdening taxpayers with higher bills.
Taxation, Inflation and Public Debt Basic ModelPedroGeyer
In this essay, we present a model of optimal taxation, money creation, and public debt policies chosen by the ruling elite in a society with three social classes: the ruling elite, the middle class, and the poor. The ruling elite seeks to maximise their own utility while preventing rebellion or coups by the other social classes. We also consider the indirect effects of money creation and public debt on wealth redistribution and economic stress. Our results show that the ruling elite will seek to take as much wealth as it can, maintaining the other individuals at the edge of their tolerance. Thus, by providing insights into the trade-offs and incentives facing the ruling elite, this model can help inform policy, political choices, and thought.
BIG SOCIETY, BIG DATA. THE RADICALISATION OF THE NETWORK SOCIETYTwittercrisis
This document discusses the emergence of the "big society" in the context of increasing digitization and the internet empowering citizens. It argues that citizens are now better informed and able to self-organize, challenging traditional power structures. While this has benefits like new models of crowdfunding, it also creates uncertainty around responsibilities. The network society is still developing, with citizens adopting new technologies faster than institutions. Overall, digitization is fueling a shift from top-down governance to a more horizontal and disruptive distribution of power between state, market and society.
Larry Ellison of Oracle and Kurt Matsumoto of Pulama Lāna'i are developing 150 rental homes on Lāna'i island, with 49% being market rate and 51% being affordable housing. The development will include both affordable rental homes for those earning below the area median income, as well as market rate rentals and homes available for purchase. Affordable housing continues to be an important issue in Hawaii, where housing costs are among the highest in the nation and many workers cannot afford market rate housing costs even when working full time.
The document discusses strategies for building sustainable rural economies through community-owned enterprises. It proposes establishing a regional food production hub called the Republic Food Enterprise Center to address gaps in the local food supply chain. The center would work with area farmers, stabilize seconds and surplus crops, produce value-added foods, and partner with end buyers. A worker cooperative model is suggested to create local jobs and wealth. The goal is to leverage existing community assets to develop a self-sufficient and resilient local food system.
This document outlines the political economy of Zimbabwe under Robert Mugabe's authoritarian rule and proposes strategies for civil society to promote liberation. It describes how ZanuPF has co-opted state institutions and the repressive political environment. Four future scenarios for 2018 and beyond are presented: a democratic transition, continued authoritarian rule, state fracture, or economic collapse. It calls for civil society to unite, mobilize citizens non-violently, and form a viable political alternative to enact positive reforms through competitive politics and grassroots pressure. Specific strategic steps are recommended to undermine the illegitimate regime and work towards justice, reconciliation and a new economic path for Zimbabwe.
AEC, KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2013 na tému Šetriť alebo
nešetriť: Zachránia Európu len úsporné opatrenia?, ktorá sa konala dňa 7.
júna 2013 v Bratislave. Ďalšie súvisiace informácie nájdete na
www.konzervativizmus.sk
AEC, in cooperation with the Conservative Institute and INESS, and in
association with international partners organized the Free Market Road
Show 2013 in Bratislava on June 7, 2013. More information at
www.institute.sk.
202859367-Worker-CooperativeWorker-Cooperatives-for-New-York-City-A-Vision-fo...Krystal Tena
This document examines worker cooperatives as a potential solution to income inequality in New York City. It finds that worker cooperatives, which are businesses owned and democratically operated by employees, can increase wages and benefits for low-income workers compared to traditional businesses. However, public support and policies to promote worker cooperatives in New York City have been limited. The document recommends that the city support and invest in growing the local worker cooperative movement through various agencies to help address poverty and economic disparities.
Minimum Wage and Negative Income Tax as Means of Poverty AlleviationElad Wind
The document discusses minimum wage and negative income tax as means of poverty alleviation. It argues that minimum wage increases unemployment and does not effectively help the poor. It proposes negative income tax as a better alternative, where the government provides direct cash payments to low-income individuals and families. Experiments with negative income tax in the US in the 1960s and 70s found it reduced work incentives but was more efficient than traditional welfare programs.
Why the portuguese public debt is not payableGRAZIA TANTA
There has been “not one historical incidence” where austerity policies have led a country to get out from under a heavy debt burden.
Ashoka Mody, former IMF chief for mission to Ireland
Summary
Conclusions
1 – The debt is an instrument of domination.
2 – A partnership between States and Capitalists
3 - Portugal – Scenarios for a continued debt payment
3.1 – Proactive and radical continuation (Hypothesis I)
3.2 – A proactive amortised continuation (Hypothesis II)
3.3 – A prolonged continuation (Hypothesis III)
4 – An evaluation of the debt instalment not to be paid
5 – How to get out of this?
AEC, KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2013 na tému Šetriť alebo
nešetriť: Zachránia Európu len úsporné opatrenia?, ktorá sa konala dňa 7.
júna 2013 v Bratislave. Ďalšie súvisiace informácie nájdete na
www.konzervativizmus.sk
AEC, in cooperation with the Conservative Institute and INESS, and in
association with international partners organized the Free Market Road
Show 2013 in Bratislava on June 7, 2013. More information at
www.institute.sk.
Fair Economics begins with Fair Taxation. This presentation breaks the stranglehold of the current Right/Left debate on taxation and offers a new perspective. The presentation is brought to you by the Fairness Coalition.
The document argues that the current federal budget deficit and debt levels are unfairly blamed on ordinary Americans, who did not cause the issues. It claims the true causes were decades of bad economic policies, including unjustified wars, outsourcing of jobs, tax cuts for the wealthy, financial deregulation, and stagnating middle-class incomes. Resolving the debt crisis requires addressing the underlying economic crisis first through solutions that help, not penalize, average Americans, rather than continuing policies advocated by those responsible for the problems. Fair debt policy should not scapegoat citizens for issues they did not create.
100 Answers to 20 Questions – Havant Parliamentary CandidatesHayling Island
This document contains 20 questions posed to parliamentary candidates in the Havant constituency and 100 word answers from 5 candidates: Alan Mak (Conservative), Tim Dawes (Green), Dr Graham Giles (Labour), Steve Sollitt (Liberal Democratic), and John Perry (UK Independence Party).
The questions cover a range of national issues like defence spending, the economy, environmental regulations, the NHS, education, taxation, the EU, and constitutional reform in the UK. The candidates provide their perspectives on these issues and how they would address them if elected. Local issues discussed include priorities for Havant and Hayling like jobs, schools, and community development.
Economic Fairness demands a coherent and reasonable Jobs Policy. In Washington today, our leaders argue about what's not important and ignore the fact that America's unemployment situation is the worst we've seen since the Great Depression. It's time to get the dialog on the right track and start talking about what's important. It's time for new ideas. This presentation is brought to you by The Fairness Coalition and is part of a series covering our principles and key policy positions.
The document discusses the challenges facing UK energy policy regarding achieving a low carbon, secure, and affordable energy system. It argues that the UK faces an impending energy capacity crunch due to aging infrastructure and a lack of long-term planning. It also discusses the need to tackle climate change through ambitious carbon reduction targets while ensuring energy security and affordable costs. The document proposes that Labour should support more ambitious carbon reduction targets set by an independent committee. It also proposes that government subsidies and guarantees for new energy infrastructure be reciprocated with equity stakes in the projects.
The document discusses advocacy strategies for the nonprofit sector. It notes that the nonprofit sector has strengths like favorable public opinion and existing relationships with officials that can be leveraged. However, it says the sector could be more effective by developing shared long-term goals, improving coordination, and increasing its visibility and influence with officials. The document advocates for strong leadership to create a unified strategy that enables nonprofits to better serve communities and create a favorable policy environment.
A Test Of Policies: Wisconsin Vs Illinoisradarbutane60
- Wisconsin passed Act 10 in 2010 which limited collective bargaining for public sector unions except for police and firefighters. This has helped reduce spending on benefits for public sector workers and helped balance Wisconsin's budget without major cuts to services.
- In contrast, Illinois has not passed similar reforms and faces major pension payment obligations and budget deficits as a result of benefits promised to public sector unions. Chicago faces $615 million in pension payments alone for this year's budget.
- The reforms in Wisconsin have helped reduce healthcare and pension costs for local schools by an estimated 45% by 2020 while Illinois continues to struggle with the costs of benefits promised to public sector unions.
The document summarizes the National Federation of Independent Business's opposition to New York Governor Paterson's proposed "Soda Tax." In 3 sentences: The NFIB argues that higher taxes do not make people or the economy healthier and will hurt small businesses and consumers. They claim the tax is really about generating revenue to plug budget deficits and appease unions, not health, and will set a precedent for more "sin taxes." The group calls on lawmakers to show leadership through budget cuts rather than burdening taxpayers with higher bills.
Taxation, Inflation and Public Debt Basic ModelPedroGeyer
In this essay, we present a model of optimal taxation, money creation, and public debt policies chosen by the ruling elite in a society with three social classes: the ruling elite, the middle class, and the poor. The ruling elite seeks to maximise their own utility while preventing rebellion or coups by the other social classes. We also consider the indirect effects of money creation and public debt on wealth redistribution and economic stress. Our results show that the ruling elite will seek to take as much wealth as it can, maintaining the other individuals at the edge of their tolerance. Thus, by providing insights into the trade-offs and incentives facing the ruling elite, this model can help inform policy, political choices, and thought.
BIG SOCIETY, BIG DATA. THE RADICALISATION OF THE NETWORK SOCIETYTwittercrisis
This document discusses the emergence of the "big society" in the context of increasing digitization and the internet empowering citizens. It argues that citizens are now better informed and able to self-organize, challenging traditional power structures. While this has benefits like new models of crowdfunding, it also creates uncertainty around responsibilities. The network society is still developing, with citizens adopting new technologies faster than institutions. Overall, digitization is fueling a shift from top-down governance to a more horizontal and disruptive distribution of power between state, market and society.
This document discusses strategies for sustaining civic engagement. It identifies barriers to participation such as lack of civics education and voter suppression. It describes a spectrum of civic actions from lightweight to heavyweight. Tactical actions are reactive while strategic actions work to implement long-term policy goals. Sustaining engagement requires countering fatigue, recognition for contributions, gamification, civic education, connecting actions to daily life, building community, and empowerment.
uicfise 8f Tea Par . A coherent and strong national leadership is an .pdfarchiespink
uicfise 8f Tea Par . A coherent and strong national leadership is an important A large population
is an important . The rise and fall of the Soviet military power shows that . A state is a political
entity with is one in which the national government is granted the preponderance of power under
the state\'s constitution- for example Japan ·According to the idea of“ \", states should possess
more than right to rule such as the wherewithal to provide political goods for its citizens Quasi-
states, which are political units that possess some, but not all. of the basic characteristics of a
state. Which of the following is one of them? ]
Solution
1.
To say we are in interesting times would be an understatement, the recent general election has
plunged us further into uncertainty. Putting aside the rights and wrongs of holding the election
and the unfolding political alliances it’s important to remember that on the ground people and
businesses are struggling to keep up with the changes and the potential impact. Most of us get on
with our lives despite the national turmoil. But the effect of that turmoil is to dampen investment
and decision making; which slows growth. Latest research by the Institute of Directors highlights
that 92% of respondents see current uncertainty over the make-up of the government as a
concern. There has been a negative swing of 34 points in confidence in the UK economy from
their last survey in May. This has serious implications for business growth, as how we interpret
and perceive our future, our risk aversion and our need to have good information to make
decisions can stifle our ability to act.
The national situation we are seeing unfold, in terms of lack of clear majority for either side, and
regardless of eventual party outcome, will be a government relying on a brokered deal to get
things through parliament which will exacerbate this uncertainty and the impact of Brexit fears.
So where can we look to for leadership?
A recent blog by the World Economic Forum has highlighted that in many places the nation state
is looking outdated, and even dangerous. Where power is too centralised and focussed on
national interests, policy is disengaged from the local, from the day to day lives of people and
businesses. The populist movement we are seeing globally is a reaction to this; dissatisfaction
with the way countries are governed creates turbulence in the current way of thinking and doing,
and challenges political structures. Shifting of decision making to a more local level eases
tensions as people see change locally and impact can be seen quicker. Cities are therefore
emerging as key leadership nodes, galvanising action and responding to local need. Focussing on
regional economic growth and giving powers and funding to local delivery structures to improve
growth can help alleviate the social and political tensions that have led us down this unfortunate
path to instability.
Half of humanity lives in cities and urbanization is set.
Explain the pros and cons of the politics.docxwrite4
The document discusses several topics related to public administration:
1) It discusses the pros and cons of the politics-administration dichotomy proposed by Woodrow Wilson, noting that government can implement laws without votes which promotes centralized bureaucracy.
2) It discusses how the issue of illegal immigration demonstrates intergovernmental relations challenges in the US due to conflicting perspectives on jobs and economics.
3) It outlines four perspectives on public budgeting: political, economic, accounting, and public management. Budgets are policy tools that can describe resource allocation and implementation.
The document discusses the unsustainable level of federal debt being passed on to future generations due to entitlement programs like Social Security and Medicare. It argues that the existing political system, made up of both Republican and Democratic parties (called "Repocrats"), has grown the size of government far beyond its legitimate role and made promises that cannot be kept without burdening American children with crippling debt. The Liberty Party USA aims to simplify taxes, reduce the size and scope of the federal government and entitlement programs, and ensure spending is in line with tax revenues to preserve freedom for future generations.
Telemachus matures into a virtuous man during his father Odysseus's long absence from home. He learns to make honorable decisions on his own, taking on deeper responsibility beyond his years. Telemachus demonstrates bravery by confronting the unwanted suitors in his home and later proves himself a worthy warrior by fighting alongside his father against the suitors. Through these challenges, Telemachus assumes the role expected of a virtuous Greek man.
The speaker thanks participants in the fiscal summit and announces that several foundations will partner to conduct an unprecedented citizen engagement exercise on June 26th in 20 cities to discuss the federal fiscal challenge. Citizens will be provided information on reform options and asked to propose reform packages to achieve long-term fiscal objectives. The results will be valuable to policymakers and others. The speaker emphasizes that bridging partisan divides will be critical to turning ideas into bipartisan policy actions.
This document provides a summary of Dean Baker's book "The Conservative Nanny State". The book argues that conservatives use government intervention to redistribute income upward by restricting the supply of high-skilled workers like doctors and lawyers, while ensuring a plentiful supply of low-skilled workers through policies around trade, immigration, and weakening of unions. It examines how areas like licensing, trade, immigration, monetary policy, bankruptcy laws, and more are used by conservatives to boost incomes at the top at the expense of others through hidden nanny state policies disguised as free market outcomes. The book aims to reframe debates around these issues by exposing the conservative reliance on big government to shape markets in ways that benefit the wealthy.
This document makes the case for introducing a Universal Basic Income (UBI) in the UK. It argues that the current welfare system is failing to adequately reduce poverty and increase security. A UBI could help address issues like benefit fraud, support relationships without penalizing cohabitation, and provide flexibility for periods of retraining, entrepreneurship, or lower work hours that may become more common due to technological change. It also explores how a UBI could help unlock people's creative potential. The document then examines the viability of a potential UBI model for the UK.
Artha kranti presentation-with-descriptionAmit Rai
The document discusses the negative effects of fiscal deficit in India including restricted government spending, uncompetitive local industry, high unemployment, slowed GDP growth, and reduced social spending. It argues that the fiscal deficit leads to internal and external borrowing which increases interest rates, hurts the banking system, and forces the government to sell public assets. This takes control away from the government and negatively impacts weaker sections of society.
From Poverty to Power is essential reading for anyone involved in change processes around the world. A new take on development for the 21st century, Oxfam International’s new book provides critical insights into the massive human and economic costs of inequality and poverty and proposes realistic solutions.
This presentation was given by the author Duncan Green presentation at the CIVICUS World Assembly in Glasgow, June 2008.
Briefing for Opposition Day Debate - 10th July 2013Citizen Network
An overview of the cumulative impact of UK government policies on disabled people. Prepared as a briefing for MPs for the Opposition Day Debate in the House of Commons on 10th July 2013. Supporting: the Campaign for a Fair Society, Pat's Petition and the WOW Campaign.
Creative Writing Curriculum Writing Writing Prompts FoCynthia Smith
The document provides steps for requesting writing assistance from HelpWriting.net:
1. Create an account with a password and email.
2. Complete a 10-minute order form providing instructions, sources, and deadline.
3. Choose a bid from qualified writers and place a deposit to start.
4. Review the paper and authorize payment or request free revisions if needed.
The service allows multiple revisions for customer satisfaction and refunds if work is plagiarized.
This paper reviews the challenges facing Indonesia's self-sufficiency programme. It analyses the determinants of change in relative demand for imported beef by using the Vector Error Correction Model (VECM) based on annual data from 1992 to 2010. It also investigates the long-run relationships between relative domestic price and relative import quantity to predict the impact of decreased reliance on imported beef using Impulse Response Functions (IRFs). The results suggest that increased income in Indonesia is associated with increased relative
demand for imported beef. A shock in relative import quantity, as a result of a government decision to cut beef import quotas, for example, would have long-term impacts on relative domestic price.
The document discusses South Australia's unique food system and the government's decision to extend the moratorium on genetically modified grain production until 2019. It notes that preserving uniqueness through differentiated food production is important for South Australia's economy, particularly in integrating food and tourism. However, information is lacking about GM grain for stakeholders and consumers. The moratorium provides time to better understand the impacts and value of GM grain within South Australia's food system.
Northern Growers is hosting a 'Thinkers in Residence' event on March 20th in Orroroo, South Australia to discuss new ideas for reducing financial pressures and personal stress faced by farmers dealing with tough soils, high input costs, and volatile grain markets. Presentations will be given by representatives from New Tech Fertilisers, Hi-Tech Ag Solutions, Unique Grain Management, and Eagle Vale Farming Systems on topics such as soil biodiversity, sustainability, optimizing rather than maximizing production, destination marketing, and a new initiative called Devotion Foods. Attendees are encouraged to RSVP by March 16th and submit any specific questions in advance.
On the back of 13+ years success, this year the University of Adelaide's Australian eChallenge has a launched a pilot eChallenge in Schools with 5 schools participating. If you would like to sponsor a prize for the eChallenge in Schools please DM me.
Record global harvests in 2013/14 have pushed down prices for cereals like maize and wheat. However, uncertainty in Ukraine has led to temporary price rises for these crops. While prices have been high and volatile since 2008, it now seems the markets may be reaching a new equilibrium as major drivers of change stabilize. Production responses to high prices, especially in developing countries, have accelerated world supply. If stability continues, proposals for radical market interventions may not be needed.
The National Food Brand initiative was launched in 2013 by the Department of Agriculture. Austrade was appointed to deliver a 2-year project that would develop a national food brand for Australia.
The National Food Brand initiative was launched in 2013 by the Department of Agriculture. Austrade was appointed to deliver a 2-year project that would develop a national food brand for Australia.
This document provides information about the South Australian Food Industry Awards Program, including eligibility requirements, categories, key dates, and the application and judging process.
Businesses located in South Australia that produce or manufacture food, with at least 50% of production in SA, can enter. There are categories for businesses with more than 15 employees and those with 15 or fewer. The program aims to recognize and celebrate outstanding individuals and businesses in the food industry. It includes an application period, site visits, announcement of finalists, and a gala dinner where winners are named. The rules for entry include deadlines, the online application process, and conditions for finalists.
Bowmans Intermodal - Australia's largest inland port is redefining logistics for Southern Australia. One of regional Australia's most significant projects for some years.
Submission to the Australian Government Agricultural Competitiveness White Paper – April 2014
Title: Addressing issues of competitiveness and food security for Australian wheat.
by Dr. John Williams
Executive Director, Food and Fibre Supply Chain Institute, PO Box 603 Werribee, Victoria 3030
M. +61 428 260549 Email. comm.trade@bigpond.com Web. www.institutefood.com
The document summarizes key findings from PwC's 17th Annual Global CEO Survey regarding Australian CEOs. It finds that while Australian CEOs are cautiously optimistic about short-term growth, they are less confident than global, Asia Pacific, and US peers about long-term prospects. Australian CEOs are most concerned with over-regulation and infrastructure issues. They have focused more on internal restructuring than deals, and their deals activity in Asia is lower than peers. Australian CEOs recognize technology as the biggest transforming trend but less than half have technology change programs. They need to better capitalize on opportunities in the growing Asian economy.
The Food and Beverage industry is optimistic about future growth in revenues and profits after surviving the global recession. Executives expect sales to increase over the next year, with a third anticipating growth over 10%. However, employment increases are expected to lag revenue and profit gains as companies focus on improving efficiency and controlling costs through automation and information technologies. While optimism exists, executives must balance investment in growth initiatives with strategies to minimize risks and maximize returns.
The document describes the World Co-operative Monitor project, which aims to collect economic, organizational, and social data on large cooperatives worldwide. It outlines the methodology used, including defining the population studied as cooperatives, mutuals, and related organizations. Key aspects of the methodology are developing a questionnaire to collect data directly from cooperatives and integrating existing cooperative databases. The document provides details on the indicators collected, including financial metrics like turnover, and the process of collecting and analyzing data to create a comprehensive database on the global cooperative economy.
The document is the 2010 report from the International Co-operative Alliance (ICA) identifying the largest 300 cooperatives in the world by revenue. It provides an overview of the cooperative sector's total revenue of $1.6 trillion, which would make it the 9th largest economy in the world. The report also includes breakdowns of revenue and rankings for the top 20 cooperatives in various industry sectors such as agriculture/forestry, banking/credit unions, and consumer retail.
World agricultural industry investment in export market development for grain.SOS Interim Management
The competitors reviewed collectively outspend the US on agri-food export promotion. The 12 countries studied spent an estimated $0.7 billion in public funds and $1.1 billion in industry funds for export promotion in 2011, totaling $1.8 billion. The EU alone spent over $800 million. In comparison, US public spending was $256 million and industry spending was $394 million for a total of $650 million in 2011. The EU allocated $360 million from central funds in 2011 for member state agricultural export promotion. Competition from other countries for international agricultural markets through export promotion programs is substantial.
The document provides background on Professor Andrew Fearne and summarizes his work as the Adelaide Thinker in Residence focusing on sustainable food and wine value chains in South Australia. It discusses value chain thinking and management. It also analyzes South Australia's food and wine value chains, identifying challenges and opportunities. Professor Fearne provides 5 recommendations: 1) developing a global thought leadership program, 2) generating integrated market intelligence, 3) developing a holistic food policy, 4) reviewing education and training for the industries, and 5) creating regional co-innovation clusters. The executive summary concisely outlines the key points covered in the full report.
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Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
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Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...
The End of the Age of Entitlement
1. “THE END OF THE AGE OF ENTITLEMENT”
ADDRESS TO THE INSTITUTE OF ECONOMIC AFFAIRS
LONDON
17 APRIL 2012
JOE HOCKEY MP
THE END OF THE AGE OF ENTITLEMENT
INSTITUTE of ECONOMIC AFFAIRS
LONDON
Introduction
I wish to thank my friends at the Institute of Economic Affairs for the opportunity to
discuss an issue that has been the source of much debate in this forum for
sometime….that is, the end of an era of popular universal entitlement.
There is nothing much new in the debate other than the fact that action has now been
forced on governments as a result of the recent financial crisis. Years of warnings
have been ignored but the reality can no longer be avoided.
Despite an ageing population and a higher standard of living than that enjoyed by our
children, western democracies in particular have been reluctant to wind back universal
access to payments and entitlements from the state.
As we have already witnessed, it is not popular to take entitlements away from
millions of voters in countries with frequent elections.
It is ironic that the entitlement system seems to be most obvious and prevalent in
some of the most democratic societies. Most undemocratic nations are simply unable
to afford the largesse of universal entitlement systems.
1
2. So, ultimately the fiscal impact of popular programs must be brought to account no
matter what the political values of the government are or how popular a spending
program may be.
Let me put it to you this way: The Age of Entitlement is over.
We should not take this as cause for despair. It is our market based economies which
have forced this change on unwilling participants.
What we have seen is that the market is mandating policy changes that common sense
and years of lectures from small government advocates have failed to achieve.
And we have subsequently witnessed over the last twelve months a raging battle.
This has been a battle between the fiscal reality of paying for what you spend, set
against the expectation of majority public opinion that each generation will receive
the same or increased support from the state than their forebears.
The entitlements bestowed on tens of millions of people by successive governments,
fuelled by short-term electoral cycles and the politics of outbidding your opponents is,
in essence, undermining our ability to ensure democracy, fair representation and
economic sustainability for future generations.
Perhaps we could re-apply noted British philosopher, AC Grayling’s words on liberty
to our debate by declaring that we may record that the age of entitlement might have
passed its best point, “after so brief a period of flourishing…”1
And flourish it did.
Government spending on a range of social programs including education, health,
housing, subsidised transport, social safety nets and retirement benefits has reached
extraordinary levels as a percentage of GDP.
However an inadequate level of revenue has forced nations into levels of indebtedness
that, in an age of slowing growth and ageing population, are simply unsustainable.
2
3. The social contract between government and its citizens needs to be urgently and
significantly redefined. The reality is that we cannot have greater government services
and more government involvement in our lives coupled with significantly lower
taxation.
As a community we need to redefine the responsibility of government and its citizens
to provide for themselves, both during their working lives and into retirement.
As part of this process, we must emphasise that government spending should be
funded from revenue rather than by borrowing from future generations in whatever
form that may take.
The Problem
Entitlement is a concept that corrodes the very heart of the process of free enterprise
that drives our economies.
All of us would agree that there are some basic community entitlements. For
generations we have all sought to define those basic rights.
For example, in the United States constitution the founding fathers determined that
citizens are entitled to life, liberty and the pursuit of happiness.
You will remember it was Margaret Thatcher who interpreted community
entitlements as the right for our children to “grow tall and some taller than others if
they have the ability in them to do so”.2
This broader and timeless conservative definition of our end game lays down some
foundations for the role of government.
Equality of opportunity rather than equality of outcome is my preferred model for
contemporary society.
Thankfully the modern capitalist economy is centred around the satisfaction of
personal wants and needs. Commercial transactions are at the core of the system. And
it is a simple and proven formula for willing buyers to engage with willing sellers. If
2
Speech to the Institute of Socio Economic Studies “Let Our Children Grow Tall” September 15, 1975
3
4. we want a product or service we go and buy it with the dividend from the fruits of our
own labour. The producer is happy and the customer is satisfied.
The problem arises however when there is a belief that one person has a right to a
good or service that someone else will pay for. It is this sense of entitlement that
afflicts not only individuals but also entire societies. And governments are to blame
for portraying taxpayer’s money as something removed from the labour of another
person.
In our collective effort to win votes, political leaders deliberately portray a new
spending commitment as if it is coming out of their own personal bank account.
Political leaders rarely thank taxpayers for their funding of the policy.
To pay for all these good policy initiatives, governments have taken the easy option
and borrowed money from that mysterious and amorphous group defined as
“bondholders”.
We all know this is simply a case of borrowing money from the taxpayers of
tomorrow for spending initiatives of today. Of course I say with irony, it gets even
better when some governments borrow more money to pay the interest on current debt
so existing taxpayers and voters will never notice the pain. This is the public sector
equivalent of those much maligned ponzi schemes.
The sovereign debt problems we are seeing in Europe and the US today are the
outcome of countries wanting a lifestyle they cannot afford but are quite happy to
borrow from others to pay for.
Of course in recent months in some countries in Europe the “borrowings” have turned
into permanent transfers of wealth as those countries have become unable – or
unwilling – to repay the loans.
Richer countries are either writing off the debt of poorer countries or they are
subsidising the debt repayments with sophisticated transfer payments.
As a parent I want to give my children everything they wish for.
4
5. As a democratically elected legislator I want to give my constituents everything they
wish for.
The hardest task in life is to say NO to someone you care about.
So perhaps what we are witnessing is a chronic failure of the democratic process.
A weak government tends to give its citizens everything they wish for. A strong
government has the will to say NO!
Being profligate is easy and politically popular in the short term, particularly when the
political cost of raising sufficient revenue is avoided by resorting to debt.
But painless revenue makes for reckless spending.
Whether it is defence, law and order, income support, social programs and so on, the
outcome is the same. Eventually the piper has to be paid.
Since World War 2 western communities have enjoyed prosperity that has exceeded
all expectations. This has been fuelled by innovation, materialism, globalisation, free
trade and debt.
Of course these are not malevolent developments. Rather they are the lauded natural
outcomes of a free and successful society.
Moreover these initiatives, which have fuelled a massive improvement in global
economic productivity, have driven the age of prosperity. Arguably this has delivered
the most dramatic improvement in the material quality of life since the beginning of
humanity.
In effect the rapid rise in private prosperity has been matched with demands for an
equal improvement in state provided prosperity.
This is understandable. We all want the best available health care, the best education,
the best pharmaceuticals and so on.
The difference is that the handbrake on private demand is income.
5
6. Unless a consumer can borrow money, it is their income and wealth which determines
whether they can buy a new television or renovate the family home.
But for governments with seemingly unlimited capacity to borrow money, that
handbrake on expenditure is not real.
While the Keynesian model of Government-led stimulus during the inevitable
downturns in the economic cycle is well documented, governments who have turned
on the fiscal tap seem completely incapable of turning it off when the cycle turns
upwards.
So we have witnessed a continual over-commitment in many countries, funded by the
lure of cheap and easily obtainable debt.
It is a problem which is not new. We might think by now we would have learnt the
lessons. But clearly that is not the case.
A Tale of Two Systems
In September last year I travelled to Hong Kong – a city of 7 million3
- which sits at
the edge of the Pearl River Delta - home to over 100 million additional residents. As a
Special Administrative Region, Hong Kong is now serving as a conduit between
China and its global trading partners, particularly those with business directly to the
north.
So even though its destiny has changed, Hong Kong continues to maintain its own
currency, laws and Parliament but is now totally wed at the hip to Beijing.
Without a social safety net, Hong Kong offers its citizens a top personal income tax
rate of 17% and corporate tax rates of 16.5%. Unemployment is a low 3.4%4
,
inflation 4.7%5
and the growth rate still respectable at over 4%6
. Government debt is
moderate7
and although there is still poverty, the family unit is very much intact and
social welfare is largely unknown.
3
World Bank
4
February 2012
5
ibid
6
GDP year to Q3 2011
7
Gross debt of 33.8% GDP in 2011, IMF World Economic Outlook Database, September 2011
6
7. The system there is that you work hard, your parents look after the kids, you look
after your grandkids and you save as you work for 40 years to fund your retirement.
The society is focussed on making sure people can look after themselves well into old
age.
The concept of filial piety, from the Confucian classic Xiao Jing, is thriving today
right across Asia. It is also the very best and most enduring guide for community and
social infrastructure.
The Hong Kong experience is not unusual in Asia. Characteristics such as low
inflation, low unemployment, modest government debt, minimal unfunded benefits
and entitlements, and significant growth are powering a whole range of emerging
markets and developing an Asian middle class that will grow to some two and a half
billion people by 20308
.
The sense of government entitlement in these countries is low. You get what you
work for. Your tax payments are not excessive and there is an enormous incentive to
work harder and earn more if you want to.
By western standards this highly constrained public safety net may, at times, seem
brutal. But it works and it is financially sustainable.
Contrast this with what we find in Europe, the UK and the USA.
All of them have enormous entitlement systems spanning education, health, income
support, retirement benefits, unemployment benefits and so on. Some countries are
more generous than others and in many instances the recipients of the largest amount
of unfunded entitlements are former employees of the Government.
In all these areas people are enjoying benefits which are not paid for by them, but paid
for by someone else – either the taxes of those who are working and producing
income, or future generations who are going to be left to pay the debt used to pay for
these services.
Despite tax rates much higher than in Hong Kong, government revenue in these
economies still falls well short of meeting current government spending initiatives.
8
Can the Asian Middle Class Come of Age?, Homi Kharas, The Brookings Institution, 12 June 2011
7
8. The difference is made up by the public sector borrowing money. And more often
than not we are borrowing money from people such as the citizens of Hong Kong.
You would have to say that this is a flawed formula. For western democracies the
party is over.
Our most deeply exposed western economies can no longer continue to accumulate
debt without constraint. The ongoing credit crisis in Europe seems a very long way
from resolution. Ultimately, spending on entitlements becomes a structural problem
for fiscal policy.
In the United States for example, the excess of government expenditure over receipts
is enormous. The Government has $15 trillion of Federal gross debt and it’s going up
by $1.5 trillion a year because expenditure is $6.2 trillion a year and receipts $4.8
trillion9
. Obviously with interest rates at near zero levels the cost of debt is limited
but sooner or later it must end in tears.
So why is it that western nations are so deeply indebted and so tragically unfunded
when it comes to meeting their future obligations in the face of an ageing
demographic and longer life expectancies?
Both sides of the western political spectrum are to blame.
As the electoral pendulum has swung between socialist and conservative sides of
politics, the socialist governments, often winning electoral success thanks to the
funding from unions, have created a huge array of entitlements for selected classes of
individuals, particularly and ironically employees of government and members of
unions.
These entitlements have now begun to hang like a millstone around the neck of
governments, mortgaging the economic future of many Western nations and their
enterprises for generations to come.
I will give you a classic example. In Boston USA, there’s a certain former police
captain who retired aged 55 some 20 years ago after a 32 year career on the force.
During that period he managed to contribute some $73,000 to his defined benefit
9
IMF, World Economic Outlook, September 2011
8
9. pension plan, a plan which gives you a percentage of your salary for life when you
retire. On retirement he started receiving 100% of his retirement salary, namely
$55,000.
He is now 75, which means he has collected some $1.1 million in benefits. And it
looks like he’ll live until he’s at least 90 or even older, so that’s almost another $1.0
million over 15 years. It’s more than he earned in 32 years and he contributed just
$73,000 to help pay for it. Either taxpayers pay the bill or the government has to
borrow to pay for the entitlement.
When the electoral pendulum swings, conservative governments have come in
promising to fix the problem but in most instances have just trimmed around the
edges without addressing the real problem of the growing entitlement burden.
And the greatest Catch 22 of modern democratic politics is that socialist governments
are blindly wedded to increases in expenditure while conservative governments are
blindly wedded to not increasing taxes. So once the cycle of economic growth comes
to its inevitable end, the problem is exacerbated.
Perhaps the real problem is the exuberant excesses of politicians who do not seem to
understand or care about the fact that like a household, a nation needs to balance its
budget over time and needs to make sure it can cover its future commitments.
This has already reached dangerous levels with some OECD countries like France
spending close to 30% of their GDP on public social expenditure.
Other countries get by with much less. Korea only spends 10% of GDP on public
social expenditure with Australia at 16% of GDP, the USA at 20% and the United
Kingdom at 23%.10
The bottom line is that our communities need to make a tough decision. We cannot
choose both higher entitlements and lower taxes. We must make a decision one way
or the other. We can take more and more of our citizen’s money and spend it for
them, or we can take less of it and rationalise government services.
10
OECD Social Expenditure Database, estimates for 2012
9
10. But it is a decision that must be made …and soon.
This challenge is compounding in scale as an ageing population in many
industrialised countries is making even further demands on the entitlement system.
Europe for example, has the highest proportion of over 60s of any region in the world.
And while 22% of the population in Europe is currently over 60, this number is
forecast to rise to 35% by 2050.
Plans for the future of Europe have assumed strong economic growth, but it is highly
uncertain how growth will be achieved as the fiscal burden associated with rising
health and aged care costs, as well as a generous pension scheme, continues to grow.
According to a study commissioned by the European Central Bank11
, 19 EU countries
had almost 30 trillion Euros of unfunded entitlement obligations for their existing
populations. Of this 30 trillion Euros, France has liabilities of 6.7 trillion and
Germany 7.6 trillion.
These liabilities will continue to grow without significant reform. And, by the way, I
don’t see how a debate in France about lowering the retirement age from 62 to 60 will
help address these challenges.
A lower level of entitlement means countries are free to allow business and
individuals to be successful. It reduces taxation, meaning individuals spend less of
their time working for the state, and more of their time working for themselves and
their family.
An economy that impedes individual ambition - whether through higher taxation, the
lack of opportunity in employment, or restricted social mobility - is one that enforces
the barriers of class, rather than reduces them.
Governments should ensure that the actions they take will leave their citizens better
off because, naturally, that will reduce the desire for ‘entitlements’. The role of
government must be to help people to the starting line, while accepting that some will
then run faster than others.
11
Pension obligations of government employer pension schemes and social security pension schemes
established in EU countries, Final Report, European Central Bank, January 2009
10
11. Everyone should know that they grow up in a country where it is possible, through
hard work and diligence, to achieve their dreams.
Naturally the Americans call this the American Dream, but it is similarly played out
across the globe, including in emerging economies in Asia.
The Australian Experience
As the child of a father who came to Australia in 1948 as a refugee from Palestine and
built himself into a successful businessman, I know that being successful in Australia
is not the product of belonging to rich and prosperous families, but rather is the result
of hard work and diligence.
In fact those stories are most often repeated in countries without extreme
interventionist governments. For example, over 80 per cent of the millionaires in the
United States are the first generation in their family to be millionaires.
But Australia has had its fair share of irresponsible governments. In 1996 the
incoming conservative government inherited a budget in a weakened state. The
previous Labor administration had racked up a succession of budget deficits and
$96bn of net debt, about 17% of GDP. (I know that figure is not large by the current
experience of most countries in Europe, but trust me, the repayment task was a
challenge.)
It took nine years of budget surpluses and asset sales to repay the debt. That is three
election cycles in Australia.
It took another two years of hard fiscal rectitude to build up a stock of net assets
equivalent to 4% of GDP. In total that is a long period of sustained fiscal austerity.
Australia has not completely avoided the problems of other western democracies
because it still has a lot of spending by government which many voters see as their
entitlement.
However, over the years there have been a number of key decisions to reduce
spending to manageable levels.
11
12. Australia has sought to reduce the burden on government of providing aged pensions
through a compulsory system of savings for retirement. Retirees must rely first on the
benefits they have accumulated rather than on government income support. And
retirement benefits to government employees and politicians are no longer provided
on a defined benefit basis but on a contributions basis so they only get back the
principal and earnings on what they have put in.
The government is also gradually raising the age at which government benefits can be
accessed, from 60 to 67 for women and from 65 to 67 for men from 1 July 2023.
Most importantly, the net government assets of $45 billion arduously built up by the
previous conservative government were set aside into a Future Fund. The funds
cannot be touched by the government for everyday expenditure. Rather, the fund can
only be accessed to pay for the previously unfunded entitlements of federal public
servants so as to reduce the burden on taxpayers.
That was an initiative of great foresight. It is, if you like, Australia’s sovereign wealth
fund with the explicit purpose of boosting the sustainability of the budget through
time.
The Road Back
So where do we go from here?
There is really only one solution in the long term, and that is for countries to live
within their means.
We must rebuild fiscal discipline. Budget surpluses must be restored, ideally until the
debt is repaid.
This can only be achieved by cutting spending or by raising taxes. And given the
general acceptance that the increased drag from higher taxes would compromise
economic growth, the clear mandate is to lower expenditure.
This is lovely rhetoric but to actually do it needs some very harsh political and social
decisions.
To be bold, I have some suggestions.
12
13. The first is that people need to work longer before they access retirement benefits.
When the age pension was introduced in Australia at age 65, life expectancy was 55.
Today life expectancy is in the 80’s.
So you can understand how I was shocked to hear that one of the policy promises of
one of the main French Presidential Election candidates, François Hollande, is to
bring the official retirement age back down to 60 from 62.
Second, there have to be universal compulsory retirement schemes into which
employees and employers must contribute so that after a man or woman has worked
for 40 or more years they have set aside an amount that can provide them with a
reasonable income for a further 15-20 years at least.
Defined benefit schemes need to be phased out worldwide, including in Australia,
whether they are for public servants or private sector employees. In addition, all
government funded pensions and other such payments must be means tested so that
people who do not need them do not get them.
Third, there needs to be clear thinking about which services should be provided by
governments and whether government funded services should be entirely free or have
some affordable co payment. Many will argue that certain government services
should be free and universal but the problem with any free good is that it will be
overconsumed and underappreciated.
For example, in Australia, health services are partly funded through compulsory
levies, paid either to the government or to private health insurers.
Across the Western world we have saddled our nations and our children with a debt
burden that is simply unsustainable. It is time for strong political and economic
leadership to clean up this mess properly, not with a series of band aids and political
spin but with genuine economic and social reform.
The age of unlimited and unfunded entitlement to government services and income
support is over. It’s as over in Greece as it is in Italy, in Spain, and in the USA.
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14. There also needs to be a rethinking of government borrowing. Some might argue that
some low level of debt is not a bad thing. I believe that is a dangerous proposition.
Once some level of debt is accepted it becomes too tempting to opt for just a little
more. Pretty soon a little debt becomes a big problem.
Also, there is a significant cost to servicing debt. Even in Australia, where net debt as
a percentage of GDP is lower than in Europe, interest costs on net debt are
approaching $7 billion a year. That is enough to build 7 new teaching hospitals every
year.
The message is that every dollar of debt has an opportunity cost.
Another aspect of the problem is that credit is no longer easily accessible for the
private sector or the public sector.
And the credit market no longer automatically favours the public sector. Ironically
more and more sovereigns are seen as a greater credit risk than many international
companies. I would think the experience of the past few years has been something of
a reality check. Lenders now know that even today advanced western economies can
default on their debts.
In today’s global financial system it is the financial markets, both domestic and
international, which impose fiscal discipline on countries. A country which is viewed
as approaching its safe limit for debt will find it increasingly difficult to borrow
additional funds at an affordable rate. Eventually the capital markets will close.
We are now in an era where lenders are much more wary about credit risk. I view this
as a healthy development.
Lenders have a more active role to play in policing public policy and ensuring that
countries do not exceed their capacity to service and repay debt.
This is playing out most dramatically in Europe where the European Commission and
the European Central Bank are either directly or indirectly heavily influencing public
policy in Greece, Italy, Spain and Portugal to name a few.
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15. It is also worth noting that the system of regulation of banks and other deposit taking
institutions is artificially boosting demand for sovereign credits with mandated
liquidity requirements generally emphasising a prominent role for government
securities.
Governments have been too prepared to exploit the resultant lower borrowing costs.
And whilst securities issued by sovereigns have traditionally been viewed as the safest
and most liquid assets, I am not sure that it is still the view of investors in Europe
today.
Concluding Comments
The road back to fiscal sustainability will not be easy.
It will involve reducing the provision of so called “free” government services to those
who feel they are entitled to receive them.
It will involve reducing government spending to be lower than government revenue
for a long time.
It is likely to result in a lowering of the standard of living for whole societies as they
learn to live within their means.
The political challenge will be to convince the electorate of the need for fiscal pain
and to ensure that the burden is equally shared.
Already in the UK and parts of Europe we have seen the social unrest that can result
when fiscal austerity bites.
But the alternative is unthinkable.
The Western world cannot continue on its current path of borrowing to fund its
excessive lifestyle. The problem of fiscal sustainability will only get worse.
Eventually lenders will cry enough is enough and turn off the credit tap. And when
that happens the economic, financial, social and political dislocations are likely to be
catastrophic.
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16. 16
The Western world is at the most important economic cross road in its history -
Governments must accept their responsibilities to fiscal discipline and the prudent use
of their citizens hard earned monies, or they need to accept that the demise of western
economies will be forced upon them in a dramatic, unpredictable and possibly violent
way.
Adam Smith’s free hand is perfectly capable of forming a fist to punish nations who
ignore the fundamental rules. Unfortunately I think Adam’s down at the gym right
now and in training for one almighty whack.
Restoring fiscal credibility will be hard. But it is essential we learn to live within
our means.
The Age of Entitlement should never have been allowed to become a fiscal nightmare.
But now that it has, Governments around the world must reign in their excesses and
learn to live within their means. All of our futures depend on it.