[SEMI-PRIVATE] Budget Committee

[Josephus I]

All cabinet ministers are invited.

Also, one member from UMP and CUE are invited. This invitation expires at the end of Monday Dec. 27, midnight ET.

 

[Josephus I]

OK. For starters, here's the current budget:

EXPENDITURE

Presidential portfolio (Finance)
Fiscal and General Administration 3
Pension fund contributions (federal employees) 12
Debt service 42

MTIA portfolio
Foreign Affairs and International Aid 6
Trade and Customs 3
Immigration and Citizenship 3

MDIS portfolio
Military 33
Coast Guard, Intelligence, Security and Counter-terrorism 9
ENDTech 6

MERL portfolio
Industry, Commerce and Labour 21
Non-renewable Resources and Fisheries (incl. Recom subsidies at about 9b) 12
Regional Development 3

MIDA portfolio
Federal police 18
Transport, Navigation and Shipping 12
Broadcast and Electronic Media, Communication 6
Postal Service 3

MESA portfolio
Welfare (incl. unemployment benefits and social aid at about 45b) 48
Health (incl. Medicure subsidies at about 33b) 36
Environment and National Parks 6
Sports 3
Omnicare subsidies 27

AG portfolio
Administration of justice 9

TOTAL EXPENDITURE 321
Code:
REVENUE

Income tax 84*
Personal property and estate taxes 18
Corporate profit tax 36
Indirect business tax and non-tax accruals 75
Natural resources and mining (Recom profits) 63
Interest 21

TOTAL REVENUE 297
Code:
CURRENT DEBT 280
Code:
* The provinces raise an additional 84 billion in income tax for provincial budgets


One-time expenses

In addition to regular expenditures, the following one-time costs have to be covered over the next few Terms:

- replacing military equipment and staff lost to secession will cost a total of 34 billion.
- post-hurricane reconstruction will come with a (federal) cost of 19 billion.


Potential source of revenue

The UPE does not currently have a VAT or a sales tax; according to best ECB estimates, introducing a 10% VAT would net 15 billion annually (totalling 45 billion for the Term) without negatively affecting the economy.
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So, where do we go from here? I agree we need to put money into the hurricane reconstruction. And my promise to add money to health care. So, what changes should be made?

Josephus

 

[unmerged(23409)]

Why do we need 6 Billion in Communications? We could half that to 3 Billion.

 

[Josephus I]

Even 3 billion a year might be too much. Where exactly does the communications money go?

Josephus

 

[unmerged(23409)]

Broadcast and Electronic Media, Communication 6

Why do we need to spend any money on it? I don't know what it does.

 

[Josephus I]

the only state sponsored media that I'm aware of is Newslink. Unless anyone can give me a reason not to, I suggest slashing that to 1 billion. That's more than enough. This will allow us to move forward with health care without touching other departments too much.

Josephus

 

[unmerged(33865)]

I will look into what the 6 billion ducats for Broadcast and Electronic Media, Communication go for and get back to you.

 

[unmerged(33865)]

Looking at the maps, Uxbridge, in New Lancaster, is served by neither rail nor freeway. After the acquisition of the Inter-Provincial Freeway System is completed, we might want to consider building a spur off of the A4 between Douglas and New Lancaster City to Uxbridge. It would be a bit more than 50 km (as these are never straight) and would involve building a bridge over the Conder River. I know the original construction costs were about 1 million Ducats per mile, but in the US, they are now running at about $5.5 million per mile for a 4 land freeway (two lanes each way), so even allowing for our lower costs it would cost at least 2.5 million Ducats per km, just for construction, not counting the cost of acquiring the right of way. Including that and the bridge, we are talking about 300 million Ducats, which would be spent over three terms, or 100 million per term.

Also, we will need to improve maintenance on the existing freeways, above what the tolls will bring in initially, so I would like to budget an additional 100 million per term for maintenance. The combined effect would be an additional 0.2 in the budget for MIDA in Interprovincial ground transportation.

 

[Josephus I]

I've looked over the budget. Here are some of my initial proposals. Unless otherwise stated, all expenses remain the same as in the previous budget with the following exceptions:

MIDA:
A one billion increase to the police force =20
A .5 billion increase to Highway projects =12.5
A 5 billion decrease to Communications= 1


MESA
A 2 billion increase to Welfare (if necessary, but budgeted) =50
A 4 billion increase to health =40


This increases our expenditure by only 2.5 billion. And keeps the hawks at bay as we haven't decreased military spending.

Now, our revenues should have increased, allowing for economic growth and stability, but without numbers, I can't mess with that. If we introduce VAT, this would give us 15 billion more. If we throw this excess revenue into the mix, this leaves us a 12.5 billion increase.

With this 12.5, I wish to implement a Presidential Emergency Expense. This gives us the cash to throw around at things needed as they come by...say hurricane relief, military emergencies...that sort of thing.


Comments.


Josephus

 

[unmerged(33865)]

Communications was 1 per year or 3 per term in the term 7 budget. Leaving it unchanged would free up 3, cutting it to 2, would be workable especially considering the loss of three provinces, but cutting it to 1, a 67% cut would probably create some dislocations that might come back to bite us, at least in the form of nasty headlines. Therefore, I would recommend cutting it to 2, not 1. If that works out okay, we can consider reducing it again in the future.

 

[Cecasander]

I agree with not changing much in the budgetting this term, though I think 12.5 billion in a emergency deposit might be a bit much. If there would be a major disaster (that would require the state to pay 12 billion) that money could also be claimed from several departments, like infrastructural repair from the MIDA. To give the budget a bit more of a 'social' face, I would support raising development aid, environment welfare, and not cutting public broadcasting to much (ooc: that public media isn't pictured in the game doesn't mean it isn't there). As I said, I agree with not changing the budget, but I don't want this cabinet to look 'weak' either. And then we can still have 5, 6 billion left for emergency situations.

 

[Josephus I]

Thanks Loic and Alexis.......good comments. You're right, maybe it isn't such a good idea to totally rape the communications budget right away...I'll adjust that. any more comments?

Josephus

 

[unmerged(33865)]

We might want to slow the production rate for Gorgon II tanks unless we can start selling some to our neighbors or to overseas clients. Ideally we could sell the old Leopard tanks they are replacing to some third or fourth world country, so we could get more than just the scrap value. But this is a matter for MDIS and MTIA to decide.

 

[unmerged(1522)]

OOC

Cautionary note about budget adjustments: individual budget items may be somewhat arbitrary, but that is only OOC. As far as in-game reality is concerned, there presumably is a reason for the amounts allotted to, e.g., media and communication, and that is the assumption you should operate under.

In other words, you may feel that some budget items are hopelessly over-inflated, and it's of course entirely possible that this is the case in-game - but until you have in-game facts that "prove" you right, that's just speculation. Simply asserting that the amount spent on a given item is too high doesn't make it true.

Consequently, I'd suggest to be very careful with massive random cuts to a given item. Blindly cutting expenditures may produce unwelcome results (you wouldn't want to wake up one day just to find that, say, Eutopia no longer has telephone, Internet, or email services thanks to your cuts, no?).

Anyhow, that just as an aside.

 

[unmerged(33865)]

Maybe we should move broadcast media, etc. to 5 from 6 instead of to 2. I would expect that some cost cutting measures could achieve that modest 17% reduction. If this proves problematic we can get a supplementary appropriation if necessary.

 

[Josephus I]

Ok. I guess bringing it down to 2 is too much of a cut.

This means, though, we have less money to throw into healthcare.

I am left with two options.

1. Ask you guys where else we can cut from.

2. Should we try to pass VAT before we do anything else?


Josephus

 

[unmerged(33865)]

We could have the military medics help out in healthcare.

We had also talked about an inheritance tax.

 

[Cecasander]

I see no reason in not installing the VAT. Even the opposition would like it - as long as it wouldn't damage the economy - as we could spend money without having to make any cuts. If cuts have to be made, I personaly would still support cutting the military, as 33 billion ducats is about ten percent of our funds, and that's is just a whole lot for military spending in a western country. Most countries spendings are around 2 to 4 percent. There are thirteen countries in the world that spend over 10 billion American dollars to defence, and all of them (safe Saudi-Arabia maybe) has a multitude of Eutopia's population and funds.

 

[Josephus I]

Well....we did campaign to cut back military spending.

Thing is I'm not sure VAT will pass the Assembly...they're pretty much sworn against anything we produce. But here's an idea....there's at least a couple of hawks in the Assembly. What if we try swing them over to the VAT side, and in return promise them, no military spending cuts?

Josephus

 

[unmerged(23409)]

Mute point Josephus. They can vote down a VAT and a Military cut if they want. So we can propose a VAT and see it get voted down, no harm in that, but the Budget won't be decided here.

I would present the budget we would want to be passed, and see it get voted down so we can comprimise.