AltAusterity Digest #70 October 18-24, 2018

Ahead of next week’s budget, the Resolution Foundation has found that UK chancellor Philip Hammond will need to boost annual spending by £31bn by 2022-23 to fulfil PM Theresa May’s promise to end austerity. According to the think-tank’s analysis, the PM’s promise is incompatible with lowering debt as a proportion of GDP unless taxes are also raised. According to the study, how “ending austerity” is defined politically will have implications for the types of changes that are rolled-out. At a minimum, however, the Resolution Foundation has said that it should mean that no government department faces further cuts in real terms day-to-day spending over the next few years. To meet debt targets the government could cancel planned cuts to corporation and income taxes, which would help raise revenue.

The Ontario Conservative government has introduced the Making Ontario Open for Business Act to “lower business costs and boost competition.” This legislation largely undoes the modernizing labour legislation that was passed by the previous Liberal government. The Ford government will freeze the minimum wage for the next two years at $14 and will eliminate the two paid sick days for Ontario workers. The minimum wage will rise with inflation starting after 2020, which means it will reach $15 by about 2024, rather than the scheduled date of January 1st, 2019. Other repeals in the bill involve the equal pay measures for non-standard employment, fair scheduling, and increasing protections for “independent contractors.”

A study published by The Economic and Social Research Institute has found that budgets between 2008 and 2018 led to greater income reductions for women than men. Stay-at-home mothers and low-income earners fared the worst. The gender differences were most pronounced during the austerity budgets of 2008 to 2012. The decline in welfare and child benefits caused the disposable income of women who don’t work to decline by 8.5% between 2012-2018, and by 13% between 2008-2012. The comparable figures for men were 4.4% and 6.5% respectively. For those who were working, men’s disposable incomes increased only 1% between 2012-2018, while women fared even worse, with only a rise of 0.7%.

The Sudanese PM Moataz Moussa told parliament Wednesday that a 15-month emergency economic-reform plan would begin this month. The austerity measures will aim to reduce inflation, stabilize the currency and achieve 4% GDP growth. The main measure will be to remove all tax exemptions except for taxes on materials used in production, while withdrawing vehicles for government officials, and cutting back on government employee perks will also be used to cut costs. Despite Sudan having a 20-year-old U.S. imposed trade embargo lifted last year, Washington’s designation of Sudan as a state sponsor of terrorism has severely limited any foreign investment.

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