Politics
Dutton is a man of little compassion and much less logic
All that I had predicted about Peter Dutton has come to pass. His comparing the 1996 mass murder of 35 people at Port Arthur with a pro-Palestine protest at the Sydney Opera House could only be made by a person without the most basic human qualities. People on the right of politics in Australia show an…
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Privileges of Misery
The Obscene Bird of Night turns the upstairs-downstairs genre upside down.
Penalties on carers make clear that we are being governed by people who do not care
As the Guardian has noted:
New figures show more than 150,000 unpaid carers are now facing huge fines for minor rule breaches, as MPs, charities and campaigners demanded an immediate amnesty.
They added:
The Guardian can reveal 156,000 unpaid carers are repaying severe penalties – in some cases tens of thousands of pounds – for often unwittingly overstepping the £151-a-week earnings limit while caring for a loved one.
11,600 carers hit by the penalties are paying back sums of more than £5,000. About one in five unpaid carers in work breached the strict weekly earnings limit last year, an illustration, campaigners say, of a broken system.
The last point is the key one. Of course, benefits have to be limited as to who can claim them. But benefits also have to recognise the realities of life - where rigid control of everything that happens within chaotic real-world situations - as the lives of carers usually are - cannot be controlled. That is most especially true when care-giving is the absolute and necessary priority of those providing it.
A system that does not provide for that is callous.
A penalty system that imposes costs way in excess of the loss suffered by the government, as this one does, is beyond callous.
Creating the capacity to pursue claims that impose poverty when the object of this benefit was to relieve it is indicative of a mindset that has lost touch with reality.
Of course, if there is fraud, chase it, but I very much doubt that many of these claims involve fraud. They refer to simple human error. In that case, there should be forgiveness in most cases, coupled (perhaps) with repayment, at most, of a part of the sum overpaid, representing a fair tax rate (ten per cent?) on the excess earnings not declared.
But so long as this persecution continues, we are living in a country governed by a political party that shows it just does not care.
Why more government spending can require more tax revenue
I posted this video, which explains why more government spending in the UK is likely to require more tax revenue to be raised, at least whilst the benefits of that spending are generated if infaltion is to be avoided, on YouTube this morning:
The transcript is:
Do we need to raise more taxes if the government is going to spend more? It's a really important question and one that people are asking me because I've written the Taxing Wealth Report. That shows that the government could, by simply changing the rules on some of our taxes with regard to the way that they impact on the wealthiest people in our society, raise up to maybe £90 plus billion of extra tax a year.
So, people are saying to me, do you think that's what we should do? And is that a precondition of making the extra spending that we want? Let me explain what the relationship between government spending, money and tax is, because that provides the answer to the question.
The government creates our money.
If you doubt it, look at a five-pound note. Who made it? Ultimately, all the money in our economy was made by the government, just like that fiver.
I know some of it is theoretically created by banks, but they can only do it because the Bank of England gives them a license to do so, and who owns the Bank of England? The government does. So, in other words, all the money that is ultimately created is done by or under license from the UK government.
How does that money get into circulation? In the case of the government, and they start the whole process rolling, it is by spending. That five-pound note was not gifted to somebody by the government, it was spent into the economy.
They used the fiver - of course they could have used a bank account as well, but in this case we'll say the fiver - to buy something. They spent. And then they taxed. It has to be that way round, because if they hadn't spent first of all, there wouldn't be the money in existence to pay the tax.
So, it's always spend and tax and never tax and spend in an economy.
But when we look at spend and tax, the tax element is there for one very important reason, and that is to cancel the spend. If the government did not tax, and it spent £800 plus billion a year into the UK economy, and therefore let all that money float free, we would of course have massive inflation.
Now, that obviously isn't possible, so therefore, you have to tax to prevent inflation. That's its primary purpose.
All its other functions - redistribution, repricing market failure, reorganizing the economy through fiscal policy, and so on. - those things are all secondary - important - but secondary to cancelling inflation.
Now, if we are at or near full employment, and we want to spend more - the government wants to spend more - the risk is that it will create inflation by doing so. So, if, as at this point of time, we are either at full employment or we have unused resources that can only be put into use gradually, we have to tax whilst those resources are put into use or else we create inflation in the meantime.
Then we could go into a vicious downward cycle, the benefit of that spend would not be received by society, and therefore things would fall apart. So, the tax is put into place because of the additional spend, but not to fund it. It is part of the transition process to let us grow, that we must tax more.
And that is why the Taxing Wealth Report talks about raising more revenue, because these issues are fundamentally related.
Scotland’s political problem
The SNP government in Scotland is in trouble. The coalition agreement with the Greens in Scotland (who are a different party to the Greens in England and Wales) has collapsed over the admission that the Scottish government cannot meet its 2030 climate targets.
The SNP is a minority government now.
Former SNP MSP, Ash Regan, now with Alba, is setting out her terms for supporting the SNP.
And there is a real risk that Humza Yasouf might lose a confidence motion shortly before a general election, which can hardly help the SNP’s electoral prospects in Westminster polling. None of this is good news for the independence movement.
I am not in the business of defending the SNP. I do not do party politics. Nor am I supporting any other pro-independence group, even if my overall bias in favour of the cause they promote is clear. What I am in the business of is spotting political problems, and Scotland has a massive one right now.
Leave aside the fact that it suffers the general problem of attracting seriously competent people into the political arena. Instead note that in Scotland this problem is exacerbated by the fact that the Holyrood parliament might grant titles like first minister, and allow parties to form cabinets, and posture as if they really are governing the country, but they are not.
This is not to say that the Scottish parliament is without powers. It clearly has some. In general, it has used them to Scotland’s advantage. Even in areas like education, where both Scotland and Wales have been criticised for allegedly poor performance it can be argued that is because neither country prioritises the meaningless rote learning that Tories - and Michael Gove in particular - have long been obsessed with. In other words, they have exercised their right to choose.
But - and that is a massive but - that right to choose is quite extraordinarily constrained. Some issues are not devolved to Scotland to decide upon. Others that are cannot be delivered upon because the devolution of financial powers to Scotland is far too limited.
Most taxes in Scotland are subject to decision making by Westminster alone. Corporation tax, VAT, national insurance, capital gains tax, inheritance tax and income tax on anything but work, plus most income tax allowances, are all subject to Westminster control. Almost the only tax levers Holyrood has are over income tax rates, local taxes and some specific charges that raise little.
Since, as I gave long argued, tax is not primarily about revenue raising but is instead a tool for controlling inflation, with massive opportunities for influencing the delivery of all other policy built in, then what is clear is that in the situation in which Holyrood finds itself, there is only a limited chance of ever effecting significant change. That is because the most fundamental range of tools for doing so - called taxes - are beyond Holyrood’s control.
This is why the green agenda of the Scottish government failed, above all else.
And that is why the Bute House agreement between the Greens and SNP has failed.
And this is why any government in Holyrood is destined not to deliver. It can’t, because London created a system that was bound to fail as a way of securing continuous control whilst ensuring that blame would be directed inward in Scotland itself, as might well happen now.
How does the SNP address that? The answer is straightforward. After many years in supposed power the SNP has to say that is not the case. It has to drop its own pretence that it is in charge, when it isn’t. It has to say that there is nothing that can be done about some problems in Scotland because Westminster will not let it act on them. It has to call the Unionist’s bluff, because there is nothing they could do to make things better in the system that they created. And they have to say time and again that if Scotland wants to be different it has to totally reject the failed Westminster agenda.
Bizarrely, Wales’ Labour government will have to do the same thing, even if Labour is in office in London.
The pretence of devolution has to end. It’s time for power to leave London. Unless it does the gross injustice of institutionalised regional inequality in the UK is bound to continue. And to prevent devolved governments taking the blame for that they have to make clear none of that failure is their fault. Only then can things change.
Balancing eSafety and Online Censorship, 2024
By Denis Hay Description: Explore how Australia’s eSafety laws impact free speech and how currency sovereignty can help balance regulation and rights. Introduction to eSafety in Australia In Australia, the enhancement of eSafety laws aims to protect citizens from various online harms, such as cyberbullying and digital abuse. While these laws are pivotal for ensuring…
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Americans don’t understand: China is not afraid of the US
China knows that, if it has to, it can stand alone and that it can defend itself. It knows, too, that most nations of the world, other than America (which is, despite itself, somewhat conflicted), want to do business with it; to connect with its growing confidence and with its strengthening brand of non-threatening, non-coercive, Continue reading »
Michael Pascoe: Negative gearing to change – it’s ‘the vibe’
“There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune” The tide – or maybe call it “the vibe” – is running in the direction of the Albanese government being pushed into changing its timid stance on negative gearing. Just as the eventual change to the stage-three Continue reading »
Think-tanked
As a China-watching think tank winds up after Morrison-era cuts, a respected analyst reviews government funding for security-related research and education. One Sunday morning nearly four years ago Kevin McCann was surprised to learn that an organisation he chaired was being hounded in the News Corp tabloids for being in “China’s grip” and “lobbying against Continue reading »
The Israel dilemma
As a gentile with an historical association with Israel, I must admit to being greatly puzzled by the double standard that is evident in the destruction of Gaza. In 1971-2 I spent five months at Kibbutz Misgav-am in northern Israel, situated right on the Lebanese border. I had earlier spent a year in Africa, and Continue reading »