"
Clearly, being in power while some year is a chance for the country. Now it is up to you, Noynoy and other major politic leaders to impulse the reform, and at a pace faster than 2010.
The first revolution will be to be in total opposition to Nationalistas (to allow foreign investment to be increased by a major reform that they won't like) and Lakas Kampi (to reform the constitution and separate definitively any party and any administration from any outside donator... here vatican).
1) The first reform must to be administrative : We must to reorganize more efficiently the country with a new constitution (more democratic, secular, more liberal, and economically more efficient). Some models exists abroad. In switzerland, for example, they talk 3 different languages and are a democratic united confederation without any problem.
In our country, the administrative division is often blocking new projects. We must to divise the country into 5 big autonomous regions with their own official language : Tagalog, Cebuano, Ilokano, Hiligaynon, Muslim Autonomous Region (Tausug language ? up to them). All of them united under the Philippines confederation with as unity language the english (to be fair).
The confederation would have with their constitution to garranty civil liberties and democracy. Only acceptable limits would be charia rules who makes consensus (for muslim region).The role of the confederation would be the stability of institutions, defense, infrastructures investment (constitution must to force investments to come where there is a lack of infrastructures to maintain unity), custom control, foreign affairs, health, and administration.
Then, barangays and provinces must to be removed from the division. All urbanized areas and their closed provinces must to become new unified cities, whatever the size. Citizen must also to be protected from investment by constitution : investment in something must to come first where there is a 'lack'. For example, Mandaue city, Lapulapu city and Cebu city must to be only one city (sugbo city ?). And the cebu province must to be divised between this sugbo city, and others cities such as moalboal, liloan, samboan, etc.
And to finish, the last point of the constitutional reform must to be to improve the Justice and the Police institutions. These institutions must to be more independants and transparents.
Also, these institution must to have the correct fund to work correctly. They are obviously too slow, and about it, we should follow our Japanese brothers who are in top. Safety non-defense budget in the Philippines is from 1 to 1.1% of the gdp. Let's equalize Japan with 1.4% of our GDP ! Prisonners are humans, they have right also. I condamn the functionment of the cebu provicial prison who is obviously against human rights. Miss Garcia don't have any respect. Also, a numerus-clausus must to be set-up. Prisonners have right to sleep in their own room with shower.
The first revolution will be to be in total opposition to Nationalistas (to allow foreign investment to be increased by a major reform that they won't like) and Lakas Kampi (to reform the constitution and separate definitively any party and any administration from any outside donator... here vatican).
1) The first reform must to be administrative : We must to reorganize more efficiently the country with a new constitution (more democratic, secular, more liberal, and economically more efficient). Some models exists abroad. In switzerland, for example, they talk 3 different languages and are a democratic united confederation without any problem.
In our country, the administrative division is often blocking new projects. We must to divise the country into 5 big autonomous regions with their own official language : Tagalog, Cebuano, Ilokano, Hiligaynon, Muslim Autonomous Region (Tausug language ? up to them). All of them united under the Philippines confederation with as unity language the english (to be fair).
The confederation would have with their constitution to garranty civil liberties and democracy. Only acceptable limits would be charia rules who makes consensus (for muslim region).The role of the confederation would be the stability of institutions, defense, infrastructures investment (constitution must to force investments to come where there is a lack of infrastructures to maintain unity), custom control, foreign affairs, health, and administration.
Then, barangays and provinces must to be removed from the division. All urbanized areas and their closed provinces must to become new unified cities, whatever the size. Citizen must also to be protected from investment by constitution : investment in something must to come first where there is a 'lack'. For example, Mandaue city, Lapulapu city and Cebu city must to be only one city (sugbo city ?). And the cebu province must to be divised between this sugbo city, and others cities such as moalboal, liloan, samboan, etc.
And to finish, the last point of the constitutional reform must to be to improve the Justice and the Police institutions. These institutions must to be more independants and transparents.
Also, these institution must to have the correct fund to work correctly. They are obviously too slow, and about it, we should follow our Japanese brothers who are in top. Safety non-defense budget in the Philippines is from 1 to 1.1% of the gdp. Let's equalize Japan with 1.4% of our GDP ! Prisonners are humans, they have right also. I condamn the functionment of the cebu provicial prison who is obviously against human rights. Miss Garcia don't have any respect. Also, a numerus-clausus must to be set-up. Prisonners have right to sleep in their own room with shower.
2) The second big reform concerns the economic freedom in The Philippines.
Except some sectors who need a special regulation (let's talk about that later), Philippines is suffering of its old dying nationalist economy. History showed that in globalisation, the only winner countries are those who have infrastructures, knowledge and who open their market to foreigners.
First thing, we must to stop this administrative economy. Anyone who want to make its business should be able to do it without any autorisation process (who leads often to corruption). Let's adopt a system such as Singapore : some clics on internet, and you are registered, your business can begin !
Second thing concerns foreign investors. A foreign investor should be able to own 100% of its property in our country, or else, they would prefer to invest in another country. And we would deserve to lose them. Foreign companies, then, must to be able to own their properties and lot. Some regulation could be acceptable to prevent companies to invest in real estate leasings but that is all. Here also, we could have inspiration from Singapore (city with a lot of people from The Philippines).
Nationalists and populists pretends that foreign companies don't help the Philippines but their countries : that is or a LIE, or STUPIDITY. Most part of the turnover, whatever the nationality, is to pay employees and re-investment. So foreign investment makes growth, and exponentially. Nationalists and populists are liars.
Third thing would be about individual property right of foreigners. I consider acceptable to limit property right to someone who doesn't live here. However not totally. Moreover, I consider that any foreigner resident could own 100% of its house and lot. Those who doesn't live here should be limited to only one house (and it would make more offer in the leasing market, making housing less expensive in the country). We must to protect the property right as well as the Finland legal system does. According to the economic freedom annual report.
Fourth, the labour market regulation : In our country, there is too much labour market regulation, with as result not a lot of employees protection. It makes our companies less competitive, and our employees, still with bad working conditions. We must to liberalize it to make it more competitive. In this instance, the best example is Bahrain, according to the same report.
However, there is employees protections to set-up if we want to be fair with our citizen :
- 8 day off per month. If not given, the hourly wage of these days must to be the triple.
- 2 weeks of paid-vacations per year. If not given, the hourly wage of these days must to be doubled.
- From 3 month pregnant to 1 year old baby, our mothers have right to a paid vacation. The companies must to be reimbursed by the government as a compensation.
- From 1 year baby to 3 years old child, a parent (mother or father) can have a paid vacation if no one is in jobless (who would mean at home). The companies must to be reimbursed as a compensation for that also.
- A public free nursery system must to be invested to put children from 3 to 4 years old and allow parents to work.
- Some other regulations such as young, senior, women, and disabled tax incitation to recruit could be acceptable.
For the rest, the labour market regulation must to be as little as possible (even if what I proposed looks big, at least, it's flexible).
Then comes the credit market regulation. Here, the global financial crisis prooved us that we must to be careful.However, we must to notice that it is regulation who made the crisis, and not the contrary : US government pushed its two almost-public banks to loan to poors subprime credits, and later, the F.E.D. increased their interest rate. These two public regulations made the crisis, but since a long time USA plays with fire. In this instance, we must to adopt a model who associate credit market freedom and debt limitation. Finland and even Mongolia in Asia associates well these two caracteristics.
However, it would be smart and prudent to cap/ceil this market. To avoid problems but to make it flexible :
- No loans over 20 years
- No monthly reimbursment over 50% of fixed income
As simply as that, and same for individuals and companies.
Next is the money reform. To explain it well, it is very dangerous when governments creates more pesos than what the market did. Globally, in money creation, you have two way to print money :
- Credits from market makes the Bank of Philippines print new pesos.
- Government (or Bank of Philippines) intervention makes new pesos printed.
But every pesos printed is a new inflation. Inflation = money printed. Then, when politics prints money because they are afraid to tax more or to reduce their expenses, they create inflation that everyone support, as a hidden tax. The problem of this hidden tax is that it makes the country less competitive and it creates a speculative bubble. It is a dangerous game who makes the Philippines's economy less credible. Moreover, false money makes also inflation, and God only know how much false printed money are running in our country.
In this instance, we must to make a money reform. First, to make forbidden any politic intervention in the money printing. We must to have as a model countries such as Japan, Taiwan or Switzerland. Moreover, and it would be the Philippines exception, I am favorable to the Gold Standard system. Insuring people that for X money that they have, they can exchange it against gold. It makes the money more stable, and this stability decreases the underemployment in general. In this reform, Bank of The Philippines would be totally independant with those limited roles. And to mark this changing, a new money is to create for a new start. A modern money the most hard to copy. The Philippines Dollar.
Next is the freedom to trade internationally. Why Philippines would do protectionnism as some other countries such as Australia ? It is bad for their economy. It protects those who product in the "protected" sectors, but it penalizes the most part of pinoys who must to pay more expensively for a product. Nobody wins with protectionnism. Those who are not enough competitive must to fail to not brake the best sectors of the economy. We must to accept this market rule. Then, to make Philippines less expensive and more competitive in the long term, we must to make as maximum as possible the freedom to trade internationally true in the country. Hong Kong and Singapore are examples in this way. Chile also in a more little proportion (but bigger country).
The last non-financial/non-budget reform is about the size of the government. Here, this is crazy. You can find 36000 different kind of "bureau" or "department". All of this must to be really simplified to focus on the main mission of a government.
All these constitutional and economic freedom reforms could be made directly in the begining of the first electoral mandate, and would be a real positive revolution here. All you need is courage.
PS : I forgot also another detail in the constitutional reform that I talk about. Every pinoy should be able to vote and run for any election. Not only pinoy born here... There is no two categories of citizen. A real democratic liberal country is a country who treat all its citizen by the same way. Also, foreigner residents should be able to vote in local elections to imply them in the integration.
Except some sectors who need a special regulation (let's talk about that later), Philippines is suffering of its old dying nationalist economy. History showed that in globalisation, the only winner countries are those who have infrastructures, knowledge and who open their market to foreigners.
First thing, we must to stop this administrative economy. Anyone who want to make its business should be able to do it without any autorisation process (who leads often to corruption). Let's adopt a system such as Singapore : some clics on internet, and you are registered, your business can begin !
Second thing concerns foreign investors. A foreign investor should be able to own 100% of its property in our country, or else, they would prefer to invest in another country. And we would deserve to lose them. Foreign companies, then, must to be able to own their properties and lot. Some regulation could be acceptable to prevent companies to invest in real estate leasings but that is all. Here also, we could have inspiration from Singapore (city with a lot of people from The Philippines).
Nationalists and populists pretends that foreign companies don't help the Philippines but their countries : that is or a LIE, or STUPIDITY. Most part of the turnover, whatever the nationality, is to pay employees and re-investment. So foreign investment makes growth, and exponentially. Nationalists and populists are liars.
Third thing would be about individual property right of foreigners. I consider acceptable to limit property right to someone who doesn't live here. However not totally. Moreover, I consider that any foreigner resident could own 100% of its house and lot. Those who doesn't live here should be limited to only one house (and it would make more offer in the leasing market, making housing less expensive in the country). We must to protect the property right as well as the Finland legal system does. According to the economic freedom annual report.
Fourth, the labour market regulation : In our country, there is too much labour market regulation, with as result not a lot of employees protection. It makes our companies less competitive, and our employees, still with bad working conditions. We must to liberalize it to make it more competitive. In this instance, the best example is Bahrain, according to the same report.
However, there is employees protections to set-up if we want to be fair with our citizen :
- 8 day off per month. If not given, the hourly wage of these days must to be the triple.
- 2 weeks of paid-vacations per year. If not given, the hourly wage of these days must to be doubled.
- From 3 month pregnant to 1 year old baby, our mothers have right to a paid vacation. The companies must to be reimbursed by the government as a compensation.
- From 1 year baby to 3 years old child, a parent (mother or father) can have a paid vacation if no one is in jobless (who would mean at home). The companies must to be reimbursed as a compensation for that also.
- A public free nursery system must to be invested to put children from 3 to 4 years old and allow parents to work.
- Some other regulations such as young, senior, women, and disabled tax incitation to recruit could be acceptable.
For the rest, the labour market regulation must to be as little as possible (even if what I proposed looks big, at least, it's flexible).
Then comes the credit market regulation. Here, the global financial crisis prooved us that we must to be careful.However, we must to notice that it is regulation who made the crisis, and not the contrary : US government pushed its two almost-public banks to loan to poors subprime credits, and later, the F.E.D. increased their interest rate. These two public regulations made the crisis, but since a long time USA plays with fire. In this instance, we must to adopt a model who associate credit market freedom and debt limitation. Finland and even Mongolia in Asia associates well these two caracteristics.
However, it would be smart and prudent to cap/ceil this market. To avoid problems but to make it flexible :
- No loans over 20 years
- No monthly reimbursment over 50% of fixed income
As simply as that, and same for individuals and companies.
Next is the money reform. To explain it well, it is very dangerous when governments creates more pesos than what the market did. Globally, in money creation, you have two way to print money :
- Credits from market makes the Bank of Philippines print new pesos.
- Government (or Bank of Philippines) intervention makes new pesos printed.
But every pesos printed is a new inflation. Inflation = money printed. Then, when politics prints money because they are afraid to tax more or to reduce their expenses, they create inflation that everyone support, as a hidden tax. The problem of this hidden tax is that it makes the country less competitive and it creates a speculative bubble. It is a dangerous game who makes the Philippines's economy less credible. Moreover, false money makes also inflation, and God only know how much false printed money are running in our country.
In this instance, we must to make a money reform. First, to make forbidden any politic intervention in the money printing. We must to have as a model countries such as Japan, Taiwan or Switzerland. Moreover, and it would be the Philippines exception, I am favorable to the Gold Standard system. Insuring people that for X money that they have, they can exchange it against gold. It makes the money more stable, and this stability decreases the underemployment in general. In this reform, Bank of The Philippines would be totally independant with those limited roles. And to mark this changing, a new money is to create for a new start. A modern money the most hard to copy. The Philippines Dollar.
Next is the freedom to trade internationally. Why Philippines would do protectionnism as some other countries such as Australia ? It is bad for their economy. It protects those who product in the "protected" sectors, but it penalizes the most part of pinoys who must to pay more expensively for a product. Nobody wins with protectionnism. Those who are not enough competitive must to fail to not brake the best sectors of the economy. We must to accept this market rule. Then, to make Philippines less expensive and more competitive in the long term, we must to make as maximum as possible the freedom to trade internationally true in the country. Hong Kong and Singapore are examples in this way. Chile also in a more little proportion (but bigger country).
The last non-financial/non-budget reform is about the size of the government. Here, this is crazy. You can find 36000 different kind of "bureau" or "department". All of this must to be really simplified to focus on the main mission of a government.
All these constitutional and economic freedom reforms could be made directly in the begining of the first electoral mandate, and would be a real positive revolution here. All you need is courage.
PS : I forgot also another detail in the constitutional reform that I talk about. Every pinoy should be able to vote and run for any election. Not only pinoy born here... There is no two categories of citizen. A real democratic liberal country is a country who treat all its citizen by the same way. Also, foreigner residents should be able to vote in local elections to imply them in the integration.
3) Next part of the reform that I advise you is more about expense programs... It can not be made directly. To reach this program you need two or even three electoral mandate, the road is long then (or else if the movement is too fast, the unstability would create unemployment).
I developped my proposition on a OECD basis, this OECD basis allows me to see clearly what works, and what don't work.
- social expenses (not including social health expense, social education expenses) : +0.35% if efficient, 0% for the rest
- education expenses : +0.1% if efficient, 0% for unefficient expenses
- administrations and public services : +0.35% if social public services such as nurseries, 0% for the rest
- health expenses : 0%
- police, justice, and other safety expenses : +0.1%
- defense expenses : +0.1%
- infrastructures, housing and collective developments : +0.1%
- culture expenses : 0.1% if language school abroad for skilled immigration program, 0% for the rest
- environment expenses : 0%
- economic miscellaneous affairs : 0.1% if only minimum necessary such as energy and monopoly prevention, 0% for the rest
As you probably know, every expense makes a gain of growth, every tax the contrary, and every debt to reimburse is exponentially more expensive. The number that I proposed you is this multiplier that you commonly can find in many economists websites. 1% of GDP of superior expense makes X gain of growth.
In this instance, let me propose you this final goal (after some mandates), as what is expensed in the best OECD country in each category. Only my social expense is not into them because with my left-liberal ideology. I have my own conception of social system.
- Social expenses : 23.5% of the GDP
With this expense, no more poors.
Everyone can eat and ride public transportation because of an universal allowance equivalent of 15% of the local GDP per capita. Only condition : being 18.
Every family with children would have a family allowance of 15% of local GDP per capita. However, if a family have more than one children, they would not have more than this amount, as an incitation for family planing.
Everyone in jobless who don't refuse to study (TESDA programs or college/university) can live in a brick studio with aircon and internet because of a 40% of the local GDP per head additionnal social fund. Those who refuse would not have it, and students would have it.
Minimum wage must to be hourly, and calculated to make the minimum income of a full time worker up to 55% of local GDP per capita.
A work incitation allowance up to 10% of local GDP could be made gradually to push people to work.
Pills, condoms and abortion would be free and allowed.
This is what we can do with this amount, and I am absolutly sure that there is no poverty anymore with that plan. Please note that I don't mean that this plan must to be made by the government, but it means a total of national and local public expenses.
- education expenses : 6% of GDP.
This is the amount expensed by the best education system in the world : Finland.
Their educative system is free for everybody, from primary school, include to university.
Their educative system is totally public, but autonomous. Teachers with the least performances at middle term lose their jobs directly, and teachers just under the average must to follow a training to renew their skills. Management is evaluated also.
From 4 to 15 years old, according to PISA test, Finland system is from far the best of the world. Finland people are not superior humans, they just have a good system.
There, children are responsabilized very early. School have a main program to provide them mathematics, science, history, language and foreign language skills. This program is of 15h per week only. Then, students are pushed to take optionnal courses up to 10h a week : doing a sport, playing music, trying some vocational shed/studio to know if they would like, learning another language, etc etc. This system continue till their high school graduation (graduation there is year 12 and not year 11 unlike here... so their bachelor is a 3 year program).
Their universities are also the best of the world for three reasons :
- they graduate 80% of their youth, that is huge
- as a proportion of their inhabitants, they are not bad in the rankings
- they are free of fees
Their universities work on the same philosophy than their primary and secondary system. Also there, they recruit wisely their teachers, expect good performances from them, but pay them in a better proportion also.
Only their vocational training are to improve. Not because of its system but because their training doesn't provide exactly what their local labour market need.
- Administration and public services : 6% of GDP. In fact, a country provides a good administration at a low price : UK with 4.5% of their GDP. Why 6%? I counted approximatively a free nurseries system (this expense would push more people to work, so would create growth).
- Health expenses : 2.9% of GDP. I don't consider public expenses in health useful because the market can provide it. Which country spend 2.9% of their GDP ? Macau for example, and the life expectancy at birth there is one of the best in the world. Then, I see these expenses as incitations for the market to go in any places (to not make health desert), and incitations to health medical insurrances to not make too much profits (as a compensation).
BE CARREFUL, with economic freedom reform that I proposed upper, you would have such as 50 different companies who would proposed their offer. This competition would already make their price really more little. Just observe abroad if you want to have an idea.
- Police, justice, and other safety expenses : 1.4% of GDP. This amount is spent in Japan. Japan is the only one OECD country who have good results in crime fight. I observed that globally, all the other countries spend less, it explains their bad results.
- Defense : 1% of GDP. I observed that in superpower countries, germany spend less for its defense (1.1% of their GDP). So I supposed that for a country like here who doesn't need to be implied internationally, 1% would be a good proportion to stop the rebellion in a middle-term.
- Infrastructures, housing, and community developments : 1% of GDP. The most efficient OECD country, as well for infrastructures as housing price, is Germany, with 0.8% of GDP. But Philippines by its situation need a constant effort to catch up its situation while Germany just have to maintain it. That is why I suppose that an effort of 0.2% additionnaly is necessary. Two sectors for that. First, making airports, ports, and public transportation as a public autonomous monopoly. The term autonomous is really important in that. Second, making financial incitations to build brick houses, studios and appartments : Philippines is able to stop to see its most poor people to live in bamboo houses. All we need to do is to improve the offer of brick hourses.
Today, approximatively 50 brick houses per 1000 heads. Tomorrow, almost 550 brick houses per 1000 heads needed.
This decreased price will make the foreign and local investment more interesting also in the long term.
- culture expense : 0.1% of GDP. This expense is one of the most useless expenses that exists except making language schools in the embassies and consulates where we can get skilled needed workers (ex : countries as rich/poor as here, or countries more poor). Japan is the OECD country who spent the least in culture, with 0.14% of their GDP. However, Japaneses have their own culture, even without public expenses ! So to just focus on language training for skilled immigrates, I think that only 0.1% of GDP is needed.
- environment expenses : 0% of GDP (same than USA). As for the culture, this expense is useless. Earth always lived period more hotter and colder, that is cycles. In the 19th century, earth was more hot than today. Are we dead ? No. There is more important pollution fights such as PM10 who are dangerous for health. And incitative taxes are enough to fight it, making expenses is not necessary. These are the reason why I don't advise expenses in this sector.
- economic miscellaneous affairs : 1% of GDP. One of the best OECD country about that expense is France with only 1.2% of their GDP. I simply think that it is possible to spend less, France spend too much as shareholders of useless companies such as "Quick" (equivalent here of Jollibee), or in automobile. This procent is made to make a public energy company, and a public medecine production company, to sell their product at a discounted price.
I developped my proposition on a OECD basis, this OECD basis allows me to see clearly what works, and what don't work.
- social expenses (not including social health expense, social education expenses) : +0.35% if efficient, 0% for the rest
- education expenses : +0.1% if efficient, 0% for unefficient expenses
- administrations and public services : +0.35% if social public services such as nurseries, 0% for the rest
- health expenses : 0%
- police, justice, and other safety expenses : +0.1%
- defense expenses : +0.1%
- infrastructures, housing and collective developments : +0.1%
- culture expenses : 0.1% if language school abroad for skilled immigration program, 0% for the rest
- environment expenses : 0%
- economic miscellaneous affairs : 0.1% if only minimum necessary such as energy and monopoly prevention, 0% for the rest
As you probably know, every expense makes a gain of growth, every tax the contrary, and every debt to reimburse is exponentially more expensive. The number that I proposed you is this multiplier that you commonly can find in many economists websites. 1% of GDP of superior expense makes X gain of growth.
In this instance, let me propose you this final goal (after some mandates), as what is expensed in the best OECD country in each category. Only my social expense is not into them because with my left-liberal ideology. I have my own conception of social system.
- Social expenses : 23.5% of the GDP
With this expense, no more poors.
Everyone can eat and ride public transportation because of an universal allowance equivalent of 15% of the local GDP per capita. Only condition : being 18.
Every family with children would have a family allowance of 15% of local GDP per capita. However, if a family have more than one children, they would not have more than this amount, as an incitation for family planing.
Everyone in jobless who don't refuse to study (TESDA programs or college/university) can live in a brick studio with aircon and internet because of a 40% of the local GDP per head additionnal social fund. Those who refuse would not have it, and students would have it.
Minimum wage must to be hourly, and calculated to make the minimum income of a full time worker up to 55% of local GDP per capita.
A work incitation allowance up to 10% of local GDP could be made gradually to push people to work.
Pills, condoms and abortion would be free and allowed.
This is what we can do with this amount, and I am absolutly sure that there is no poverty anymore with that plan. Please note that I don't mean that this plan must to be made by the government, but it means a total of national and local public expenses.
- education expenses : 6% of GDP.
This is the amount expensed by the best education system in the world : Finland.
Their educative system is free for everybody, from primary school, include to university.
Their educative system is totally public, but autonomous. Teachers with the least performances at middle term lose their jobs directly, and teachers just under the average must to follow a training to renew their skills. Management is evaluated also.
From 4 to 15 years old, according to PISA test, Finland system is from far the best of the world. Finland people are not superior humans, they just have a good system.
There, children are responsabilized very early. School have a main program to provide them mathematics, science, history, language and foreign language skills. This program is of 15h per week only. Then, students are pushed to take optionnal courses up to 10h a week : doing a sport, playing music, trying some vocational shed/studio to know if they would like, learning another language, etc etc. This system continue till their high school graduation (graduation there is year 12 and not year 11 unlike here... so their bachelor is a 3 year program).
Their universities are also the best of the world for three reasons :
- they graduate 80% of their youth, that is huge
- as a proportion of their inhabitants, they are not bad in the rankings
- they are free of fees
Their universities work on the same philosophy than their primary and secondary system. Also there, they recruit wisely their teachers, expect good performances from them, but pay them in a better proportion also.
Only their vocational training are to improve. Not because of its system but because their training doesn't provide exactly what their local labour market need.
- Administration and public services : 6% of GDP. In fact, a country provides a good administration at a low price : UK with 4.5% of their GDP. Why 6%? I counted approximatively a free nurseries system (this expense would push more people to work, so would create growth).
- Health expenses : 2.9% of GDP. I don't consider public expenses in health useful because the market can provide it. Which country spend 2.9% of their GDP ? Macau for example, and the life expectancy at birth there is one of the best in the world. Then, I see these expenses as incitations for the market to go in any places (to not make health desert), and incitations to health medical insurrances to not make too much profits (as a compensation).
BE CARREFUL, with economic freedom reform that I proposed upper, you would have such as 50 different companies who would proposed their offer. This competition would already make their price really more little. Just observe abroad if you want to have an idea.
- Police, justice, and other safety expenses : 1.4% of GDP. This amount is spent in Japan. Japan is the only one OECD country who have good results in crime fight. I observed that globally, all the other countries spend less, it explains their bad results.
- Defense : 1% of GDP. I observed that in superpower countries, germany spend less for its defense (1.1% of their GDP). So I supposed that for a country like here who doesn't need to be implied internationally, 1% would be a good proportion to stop the rebellion in a middle-term.
- Infrastructures, housing, and community developments : 1% of GDP. The most efficient OECD country, as well for infrastructures as housing price, is Germany, with 0.8% of GDP. But Philippines by its situation need a constant effort to catch up its situation while Germany just have to maintain it. That is why I suppose that an effort of 0.2% additionnaly is necessary. Two sectors for that. First, making airports, ports, and public transportation as a public autonomous monopoly. The term autonomous is really important in that. Second, making financial incitations to build brick houses, studios and appartments : Philippines is able to stop to see its most poor people to live in bamboo houses. All we need to do is to improve the offer of brick hourses.
Today, approximatively 50 brick houses per 1000 heads. Tomorrow, almost 550 brick houses per 1000 heads needed.
This decreased price will make the foreign and local investment more interesting also in the long term.
- culture expense : 0.1% of GDP. This expense is one of the most useless expenses that exists except making language schools in the embassies and consulates where we can get skilled needed workers (ex : countries as rich/poor as here, or countries more poor). Japan is the OECD country who spent the least in culture, with 0.14% of their GDP. However, Japaneses have their own culture, even without public expenses ! So to just focus on language training for skilled immigrates, I think that only 0.1% of GDP is needed.
- environment expenses : 0% of GDP (same than USA). As for the culture, this expense is useless. Earth always lived period more hotter and colder, that is cycles. In the 19th century, earth was more hot than today. Are we dead ? No. There is more important pollution fights such as PM10 who are dangerous for health. And incitative taxes are enough to fight it, making expenses is not necessary. These are the reason why I don't advise expenses in this sector.
- economic miscellaneous affairs : 1% of GDP. One of the best OECD country about that expense is France with only 1.2% of their GDP. I simply think that it is possible to spend less, France spend too much as shareholders of useless companies such as "Quick" (equivalent here of Jollibee), or in automobile. This procent is made to make a public energy company, and a public medecine production company, to sell their product at a discounted price.
For you to know, I counted how much is spent today in each sectors by the government (unfortunaly, local governments are not enough transparents to add their own expenses. But often their expenses are just "administration". Eventually "infrastructures" and "safety" if they are less bad than the average).
*****2010 expenses (% of GDP)*****
18.05% || Total government expenses
4.17% || Public debt annual reimbursment
0.22% || Useful economic expenses : energy, medication production
1.49% || Housing, Infrastructures, community services
1.21% || Social
0.44% || Health
2.76% || Education, vocational education, culture
0.86% || Defense
1.10% || Security, Justice
1.25% || Administration and Public services
4.55% || Useless expenses : subventions, environment, etc
I also forgot to say that in what I called economic affairs, I included all fiscal advantages to make agriculture more competitive or housing less expensive.
This article can be found here : http://www.marroxas.com/forum/topic/ambition-for-economic-liberal-reform
*****2010 expenses (% of GDP)*****
18.05% || Total government expenses
4.17% || Public debt annual reimbursment
0.22% || Useful economic expenses : energy, medication production
1.49% || Housing, Infrastructures, community services
1.21% || Social
0.44% || Health
2.76% || Education, vocational education, culture
0.86% || Defense
1.10% || Security, Justice
1.25% || Administration and Public services
4.55% || Useless expenses : subventions, environment, etc
I also forgot to say that in what I called economic affairs, I included all fiscal advantages to make agriculture more competitive or housing less expensive.
4) The last point of program advised is of course about revenues
You fighted against VAT. Probably because hard for poors. However, the amount of social expenses I proposed is designed for a VAT at 26% as a liberal consensus (I explained that in my blog, I invite you to visit it http://jeffincebu.blogspot.com). So the problem is not anymore a problem.
You must to notice, if it is not already the case, that VAT is a good tax who doesn't penalize a lot the economy.
Here are the multipliers :
- VAT, immovable property taxes, financial transaction taxes (if no more than 0.1% per transaction) : -0.1% of growth per % of GDP taxed.
- Social cotisations on salaries : -0.2%
- Income taxes on individuals and businesses : -0.3%
- Excise taxes, and other miscellaneous taxes of this type : -0.4%
- Taxes on wealth, on inheritance, gifts, and taxes on capital : -0.5%
Of course, the revenues who are not from taxes are the best. And it is advised to privatize all the useless public companies and sell the useless shares. Also advised if later the budget is an excedent to loan to other countries, as China is doing.
And for information, here are the revenues made by our governors (central, I still can't guess for the local) this year :
15.20% || Total revenue
2.65% || VAT
4.81% || Excise tax
5.73% || Income tax individuals and corporate
1.46% || Non-Tax revenue
0.55% || Estate and gift tax
Unfortunaly, impossible for me to separate the estate tax from the gift/inheritance tax, but we can have an idea.
You fighted against VAT. Probably because hard for poors. However, the amount of social expenses I proposed is designed for a VAT at 26% as a liberal consensus (I explained that in my blog, I invite you to visit it http://jeffincebu.blogspot.com). So the problem is not anymore a problem.
You must to notice, if it is not already the case, that VAT is a good tax who doesn't penalize a lot the economy.
Here are the multipliers :
- VAT, immovable property taxes, financial transaction taxes (if no more than 0.1% per transaction) : -0.1% of growth per % of GDP taxed.
- Social cotisations on salaries : -0.2%
- Income taxes on individuals and businesses : -0.3%
- Excise taxes, and other miscellaneous taxes of this type : -0.4%
- Taxes on wealth, on inheritance, gifts, and taxes on capital : -0.5%
Of course, the revenues who are not from taxes are the best. And it is advised to privatize all the useless public companies and sell the useless shares. Also advised if later the budget is an excedent to loan to other countries, as China is doing.
And for information, here are the revenues made by our governors (central, I still can't guess for the local) this year :
15.20% || Total revenue
2.65% || VAT
4.81% || Excise tax
5.73% || Income tax individuals and corporate
1.46% || Non-Tax revenue
0.55% || Estate and gift tax
Unfortunaly, impossible for me to separate the estate tax from the gift/inheritance tax, but we can have an idea.
Then, according to these informations, and wanting as goal to not make the wedge more than 60%, here is the revenue advised, designed for the expenses proposed before. Of course, I didn't count non-taxes revenues because they are unstable and not safe, but if there is possibility to have donations from abroad, or other kind of non-tax revenues, it is the priority.
- VAT at 26% but 0% in food, housing, electricity, public transportation, internet : 14.8% of GDP of revenues expected
- Proportional Income tax on individuals at 25% with fiscal deductions for the topics I said upper (real estate, etc.) : 9% of GDP expected
- Social cotisations on salaries at 35% : 10.4% of GDP expected
- Immovable property taxes at two times the ireland rates (I invite you to consult their website to know more exactly about it) : 1.3% of GDP expected
- Financial transactions tax at the same level than Australia (here also, too complicated to explain it in one sentence only) : 1.4% of GDP expected
- Proportionnal Income tax on businesses at 25.8% (less incitations) : 6.4% of GDP expected
I also invite you if you have time to visit my blog http://jeffincebu.blogspot.com
My email and msn is also here : gangrene23@live.fr"
- VAT at 26% but 0% in food, housing, electricity, public transportation, internet : 14.8% of GDP of revenues expected
- Proportional Income tax on individuals at 25% with fiscal deductions for the topics I said upper (real estate, etc.) : 9% of GDP expected
- Social cotisations on salaries at 35% : 10.4% of GDP expected
- Immovable property taxes at two times the ireland rates (I invite you to consult their website to know more exactly about it) : 1.3% of GDP expected
- Financial transactions tax at the same level than Australia (here also, too complicated to explain it in one sentence only) : 1.4% of GDP expected
- Proportionnal Income tax on businesses at 25.8% (less incitations) : 6.4% of GDP expected
I also invite you if you have time to visit my blog http://jeffincebu.blogspot.com
My email and msn is also here : gangrene23@live.fr"
This article can be found here : http://www.marroxas.com/forum/topic/ambition-for-economic-liberal-reform
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