Since the Indian Ocean tsunami of 2004, disaster recovery plans are almost always framed with aspirational plans to “build back better”. It’s a fine sentiment – we all want to build better societies and economies. But, as the Cheshire Cat tells Alice when she is lost, where we ought to go depends very much on where we want to get to.
The ambition to build back better therefore needs to be made explicit and transparent as countries slowly re-emerge from their COVID-19 cocoons.
The Asian Development Bank attempted last year to define build-back-better aspirations more precisely and concretely. The bank described four criteria: build back safer, build back faster, build back potential and build back fairer.
The first three are obvious. We clearly want our economies to recover fast, be safer and be more sustainable into the future. It’s the last objective – fairness – that will inevitably be the most challenging long-term goal at both the national and international level.
Economic fallout from the pandemic is already being experienced disproportionately among poorer households, in poorer regions within countries, and in poorer countries in general.
Some governments are aware of this and are trying to ameliorate this brewing inequality. At the same time, it is seen as politically unpalatable to engage in redistribution during a global crisis. Most governments are opting for broad-brush policies aimed at everyone, lest they appear to be encouraging class warfare and division or, in the case of New Zealand, electioneering.
In fact, politicians’ typical focus on the next election aligns well with the public appetite for a fast recovery. We know that speedier recoveries are more complete, as delays dampen investment and people move away from economically depressed places.
Speed is also linked to safety. As we know from other disasters, this recovery cannot be completed as long as the COVID-19 public health challenge is not resolved.
The failure to invest in safety, in prevention and mitigation, is now most apparent in the United States, which has less than 5% of the global population but a third of COVID-19 confirmed cases. Despite the pressure to “open up” the economy, recovery won’t progress without a lasting solution to the widespread presence of the virus.
Economic potential also aligns with political aims and is therefore easier to imagine. A build-back-better recovery has to promise sustainable prosperity for all.
The emphasis on job generation in New Zealand’s recent budget was entirely the right primary focus. Employment is of paramount importance to voters, so it has been a logical focus in public stimulus packages everywhere.
Fairness, however, is more difficult to define and more challenging to achieve.
While a rising economic tide doesn’t always lift all boats – as the proponents of growth-at-any-cost sometimes argue – a low tide lifts none. Achieving fairness first depends on achieving the other three goals.
Economic prosperity is a necessary precondition for sustainable poverty reduction, but this virus is apparently selective in its deadliness. Already vulnerable segments of our societies – the elderly, the immuno-compromised and, according to some recent evidence, ethnic minorities – are more at risk. They are also more likely to already be economically disadvantaged.
As a general rule, epidemics lead to more income inequality, as households with lower incomes endure the economic pain more acutely.
This pattern of increased vulnerability to shocks in poorer households is not unique to epidemics, but we expect it to be the case even more this time. In the COVID-19 pandemic, economic devastation has been caused by the lockdown measures imposed and adopted voluntarily, not by the disease itself.
Many low-wage workers also work in industries that will be experiencing longer-term declines associated with the structural changes generated by the pandemic: the collapse of international tourism, for example, or automation and robotics being used to shorten long and complicated supply chains.
Poorer countries are in the worst position. The lockdowns hit their economies harder, but they do not have the resources for adequate public health measures, nor for assisting those most adversely affected.
In these places, even if the virus itself has not yet hit them much, the downturn will be experienced more deeply and for longer.
Worryingly, the international aid system that most poorer countries partially rely on to deal with disasters is not fit for dealing with pandemics. When all countries are adversely hit at the same time their focus inevitably becomes domestic.
Very few wealthy countries have announced any increases in international aid. If and when they have, the amounts were trivial – regrettably, this includes New Zealand. And the one international institution that should have led the charge, the World Health Organisation, is being defunded and attacked by its largest donor, the US.
Unlike after the 2004 tsunami, international rescue will be very slow to arrive. One would hope most wealthy countries will be able to help their most vulnerable members. But it looks increasingly unlikely this will happen on an international scale between countries.
Without global empathy and better global leadership, the poorest countries and poorest people will only be made poorer by this invisible enemy.
Ilan Noy, Professor and Chair in the Economics of Disasters and Climate Change, Te Herenga Waka — Victoria University of Wellington
In the federal budget, Treasurer Scott Morrison promised tax cuts to all working Australians in the form of an offset and changes to tax income thresholds. But our analysis of Treasury data shows that while the government advertised these as payments to low and middle income Australians, most of the benefits would flow through to high income earners in future years.
If all of the stages of the tax plan passed parliament, there would be a sharp increase in benefits for people earning above A$180,000, due to the reduction of their marginal tax rate from 45% to 32.5%.
Taxes in most countries are progressive. This means that the more you earn, the higher your marginal rate (the additional amount you pay for each dollar earned).
There are good reasons for this – progressive tax systems mean those on a lower income pay a lower average tax rate, while those on higher incomes pay a higher average tax rate. This reduces income inequality – as you earn more, for each dollar you earn, you will pay more in tax than someone on a lower income.
With the 2018-19 budget, the proposal is for a “simpler” tax system from 2024-25. This means a reduced number of tax brackets, and a lower rate of 32.5% to those earning between A$87,001 and A$200,000.
Treasurer Scott Morrison said following the budget:
Well, you’ve still got a progressive tax system. That hasn’t changed. In fact, the percentage of people at the end of this plan, who are on the top marginal tax rate is actually slightly higher than what it is today.
However this new tax system from 2024-25 is less progressive than the current system. It means higher income inequality – the rich get more of the tax cuts than the poor.
As part of the new proposal, low and middle income earners get a tax offset in 2018-19, with high income earners getting very little. This part of the plan is progressive – more money goes to lower income earners.
However, by 2024-25, the tax cuts means high income earners gain A$7,225 per year, while those earning A$50,000 to A$90,000 gain A$540 per year, and those earning A$30,000 gain A$200 per year.
Of course, another factor of tax cuts is that they only benefit those who are employed. Tax cuts don’t benefit people like the unemployed, pensioners, students (usually young people) and those on disability support pensions.
The conversation Australians need to have is how we should be spending the revenue boost we are seeing over the next few years. We can either spend this windfall gain on benefits to high income earners, in the hope that this will flow through spending to everyone else; or maybe we should encourage young people into housing through an increase to the first home owners grant, or increased funding for our schools, universities and health system.
We’ve developed a budget calculator so you can see how your family is affected by the 2018 budget.
Income inequality has dropped slightly in Australia, largely driven by a fall in incomes for the richest 20% of the population, according to the latest Australian Bureau of Statistics (ABS) Survey of Household Income and Wealth.
The richest 20% of the population have seen their real disposable incomes (adjusted for the number of people living in the household) fall by nearly 5%, or close to A$100 per week. Most other households have seen no real increase in their incomes over the two years since the previous survey was released.
Our recent public debate over whether inequality is rising or falling ran into the problem that the two most important sources of data were showing different trends. The ABS survey continues to show a higher level of income inequality than the HILDA survey, but the latest trends now look more similar.
Possibly the best characterisation of the latest ABS figures is that they show inequality remains higher than at any period before 2007-08, but in the short term it is unclear what to expect.
As you can see in the following chart, there has been a slight fall in income inequality between 2013-14 and 2015-16, with the Gini coefficient for “Equivalised Disposable Household Income” falling from 0.333 to 0.323. The Gini coefficient is a measure between zero (where all households have the same income) and one (where only one household claims all the income).
Equivalised Disposable Household Income is the total income of the household from all sources including social security payments, minus direct taxes, and then adjusted for the number of people living in the household. For example, a household of a couple with two children under the age of 15 is assumed to need 2.1 times the income of a household of a single adult to achieve the same standard of living.
So what explains these most recent trends? At this stage, it’s difficult to be definitive. It should also be borne in mind that it has only been two years since the last survey, the overall change is not large, and so we should be cautious in unpacking the trends.
But it is worth noting that this small reduction in income inequality has come at the same time as a small fall in both median and mean disposable incomes for Australian households.
The average taxes paid by households have also risen slightly in real terms (adjusted for inflation) since 2013-14, while the average social security benefits have stayed the same in real terms. This masks a significant drop in the real level of family payments (such as the family tax benefit) received by households, and increases in age pensions and “other payments” (overseas pensions and benefits, partner allowance, sickness allowance, special benefit, war widow pension (DVA), widow allowance, and wife pensions etc.).
However, where there does appear to be large changes are in the sources of income for households. If we compare incomes between the 2013-14 and 2015-16 surveys, we find that the only group that has enjoyed real increases in incomes are those whose main source of income is social security benefits. But these have risen by only A$6 per week, or about 1.3%, and they remain by far the lowest income households in Australia, with their average incomes remaining less than half of all other household groups.
Households who mainly rely on wages and salaries have seen their average real disposable incomes fall by about A$17 per week, or about 1.4%.
The biggest declines are among those who mainly rely on self-employment income from unincorporated businesses – usually a small business which has not incorporated as a registered company – and people whose main source of income is “other”.
“Other” includes many things, such as income received as a result of ownership of financial assets (interest, dividends), and of non-financial assets (rent, royalties), as well as from sources such as incorporated business income (i.e. companies), superannuation, child support, workers’ compensation and scholarships.
This group is fairly small – about 8% of households, but they are both the group with the highest and most unequal incomes and by far the highest level of net worth (assets minus liabilities). Their average incomes have fallen by around A$93 a week in real terms, or around 8%, but their median real incomes rose by around A$11 per week, suggesting that the loss in income was concentrated among higher income households in this group.
This group in 2013-14 had by far the highest level of income inequality with a Gini coefficient of 0.474. This has fallen to 0.423 in 2015-16. But because a lot of this income comes from the stockmarket, we can expect it to be more volatile.
The group who appear to have lost by far the most, however, are households whose main source of income is unincorporated business income. This is an even smaller group – around 4.6% of all households in 2015-16. Their real average incomes have fallen by more than A$160 per week, or around 16%. They also have a high level of inequality within their group, with a Gini coefficient of 0.353 in 2015-16, down from 0.389 two years previously.
But the overall change in income inequality is not large, and it does not significantly change Australia’s international ranking.
Writing in the Australian yesterday, Nick Cater of the Menzies Research Centre asserted that Australia is “one of the most equal and socially mobile nations on earth”. But even with the slight reduction in inequality, we are slightly above the OECD average, and there are around 20 OECD countries who are likely to have lower levels of income inequality than Australia.
Overall, the data shows a relatively small change in incomes for employee households and for households whose main source of income is social security payments. Together, these account for 87% of all households in Australia.
The reduction in overall income inequality in this period is therefore explained by the falls in income for the self-employed and for the “other” group – the group with the highest incomes and wealth.
Understanding what exactly has been happening for these groups and why will require further time and analysis. The volatility of the income sources for these groups is another reason to be cautious about projecting future trends.
The link below is to an article that looks at the woes of Nathan Tinkler, Australia’s poorest richest man.
Members of a home-based church in the city of Ahvaz are very concerned about their detained member and have reported that after more than a month from his arrest there are no precise information about his condition, reports FCNN.
According to the reports received by the Farsi Christian News Network (FCNN) from the city of Ahvaz, the capital city of the rich petroleum province of Khoozestan in the Southwestern part of Iran, members of a home-based church have informed this news network that more than a month ago one of their members, Neshan Saeedi, has been detained and there are no specific information regarding his condition. This has caused serious worry and concern for the members of the church as well as his family and friends.
The 27 years old Mr. " Neshan Saeedi" , on July 24, 2010 at 9:00 pm, while spending a quiet evening with his wife and young daughter at their home at the Golestan neighborhood of Ahvaz, was attacked by plain-clothes security forces that had entered his house and was arrested.
The security officers searched the home and seized personal belongings such as a computer, CDs containing films of Christian seminars and teachings, Christian books and Bibles, and family photo albums.
Following a rude and intimidating encounter with the security personnel the entire family was then taken to Chaharshir detention center in Ahvaz where after several hours of questioning and harsh interrogation the wife and the 6 years old daughter of Mr. Saeedi were released, but no one has been given permission to contact Mr. Saeedi himself.
The security officers not only insulted the wife of Mr. Saeedi, but indicated that they were apostates and not worthy of raising their 6 years old daughter. They threatened her that if they continue in their Christian activities they may lose their right to her daughter.
They were also accused of threatening the national security of the country and anti-government activities. They were told that they were spies of foreign powers and were leading people to pro-Israel ideology.
The members of the home-based church who fellowshipped with Mr. Saeedi and his wife, out of fear for their lives and the possibility of further arrests and persecution, have since scattered and dismantled the fellowship. It seems that the security agents are desperately seeking two other leaders of this church by the names of Ebi and Omid and are following all leads to pursue and arrest them. Members of this church, who call themselves Unity Church (movahedin) , in their contact with FCNN indicated that not only they are worried about the arrest of their assistant pastor, Neshan Saeedi, but fear further arrests and detentions.
One of the members of the church told FCNN that Mr. Saeedi is one of the older Christians in Ahvaz and he accepted the Lord Jesus as his savior many years ago. During all these years he has been a man of prayer and a worshipper in the house church in Ahvaz. Now, a month after his arrest and detention there has been no permission granted to him to retain a lawyer or contact his family. Moreover, he is under extreme pressure to reveal the names of his church members and to admit his affiliation with foreign powers and his acceptance of financial and other forms of help from them.
The members of the Unity Church (movahedin) not only deny any affiliation and connection to any external organization and foreign powers, but have resorted to exposing this news through FCNN to international media in hope that through prayers and other humanitarian efforts Mr. Saeedi would be released and rejoin his worried and hopeful family.
Report from the Christian Telegraph
Muslims vehemently protest baptism of converts, fabricate false charge against church leaders.
PINGNA, Bangladesh, August 2 (CDN) — Two Christian women in Bangladesh’s northern district of Jamalpur said village officials extorted relatively large sums of money from them – and severely beat the husband of one – for proclaiming Christ to Muslims.
Johura Begum, 42, of Pingna village said a member of the local union council, an area government representative and the father of a police officer threatened to harm her grown daughters if her family did not pay them 20,000 taka (US$283). The police officer whose father was allegedly involved in the extortion was investigating a fabricated charge that Christians had paid Muslims to participate in a river baptism on May 26.
Begum had invited seven converts from Islam, including three women, to be baptized on the occasion, she said. Only six men among 55 converts were baptized by the leaders of the Pentecostal Holiness Church of Bangladesh (PHCB), Christian leaders said, as the rest were intimidated by protesting Muslims; the next day, area Islamists with bullhorns shouted death threats to Christians.
“The council member threatened me, saying I had to give him 20,000 taka or else we could not live here with honor, dignity and security,” Begum said. “If I did not hand over the money, he said I my grown-up twin daughters would face trouble.”
Begum said her husband is a day-laborer at a rice-husking mill, and that 20,000 taka was a “colossal amount” for them. She was able to borrow the money from a Christian cooperative, she said.
“I gave the extortion money for the sake of our safety and security,” Begum said. “It not possible to say aloud what abusive language they used against me for inviting people to God.”
Villagers backed by a political leader of the ruling Bangladesh Awami League party also allegedly extorted 250,000 taka (US$3,535) from another Christian woman, 35-year-old Komola Begum of Doulatpur village, whose husband is a successful fertilizer seller.
The villagers claimed that she and her husband had become rich by receiving funds from Christians. After the baptisms, local Muslims beat her husband to such an extent that he received three days of hospital treatment for his injuries, she said.
Komola Begum, who had invited 11 persons including three women to the baptisms, told Compass that her husband’s life was spared only because she paid what the Muslims demanded.
“My husband is a scapegoat – he simply does business,” she said. “But he was beaten for my faith and activities.”
The 55 baptisms were to have taken place on the banks of the Brahmanputra River in Mymensingh district, 110 kilometers or 68 miles north of Dhaka (Jamalpur is 140 kilometers or 87 miles northwest of Dhaka).
Leaders of the PHCB congregation had begun baptizing the converts, and the rage of area Muslims flared as they staged a loud protest at the site, area Christians said. Police soon arrived and detained the Christian leaders and others present.
At the police station, officers forced one of those present at the baptism, 45-year-old Hafijur Rahman, to sign a statement accusing four of the Christian leaders of offering him and others money to attend, Rahman told Compass.
Police swiftly arrested two of the Christian leaders, while two were able to flee.
Rahman told the Compass that he was not offered any money to go to the baptism service.
“I was not aware of the content of the case copy – later I came to know that a case was filed against the four Christian neighbors by me,” Rahman said. “I am an illiterate man. Police took my fingerprint on a blank paper under duress, and later they wrote everything.”
Rahman said he went to the baptisms because one of his neighbors invited him.
“I went there out of curiosity,” he said. “They did not offer us any money.”
The document Rahman signed charges that he and others were offered 5,000 taka (US$70) each as loan to attend a meeting in Mymensingh.
“Instead of attending a meeting, they took us to the bank of the Brahmanputra River,” the document states. “Some Christian leaders had some of us bathed according to the Christian religion. Then some of us protested. The Christian leaders said, ‘If you need to take loan, you need to accept Christian religion.’”
Denying that Rahman was forced to sign the document, local Police Chief Golam Sarwar told Compass that a fraud case was filed against four Christians.
“They lured local Muslims by giving them 5,000 taka to become Christian, and their activities hurt the religious sentiment of the Muslims,” Sarwar said.
For three days after the baptism ceremony, Jamalpur district villagers announced through bullhorns the punishment Christians would receive for their activities, chanting among other slogans, “We will peel off the skins of the Christians.” They also shouted that they would not allow any Christians to live in that area.
Johura Begum said that when she became a Christian 20 years ago, area Muslims beat her and forced her to leave the village, though she was able to return three years later.
“Local Muslims bombarded us with propaganda – that when I became a Christian, I would have to be naked in the baptism before the Christian cleric,” said Johura Begum. “Recently they are bad-mouthing Christianity with these kinds of disgraceful and scurrilous rumors, and my daughters cannot attend their classes.”
Report from Compass Direct News
Muslim landowner offers to remove chains from 11-year-old boy if he converts to Islam.
WAZIRABAD, Pakistan, June 21 (CDN) — An 11-year-old Christian boy here is growing weak and ill from malnutrition from working in slave-like conditions for a Muslim landowner who kidnapped him and is forcing him to work off his family’s debts, his mother told Compass.
Katherine Bibi said landowner Ashraf Cheema of Dhonikay village, Wazirabad, has offered her son better conditions and possibly cancellation of the debt if he will convert to Islam.
“He is frequently invited to convert to Islam by Ashraf Cheema, and in return he is promised that he will be freed from the iron chains and his work will be eased and he will be served better meals,” she said. “Cheema has said, ‘The debt of your father and brother might also be forgiven if you convert.’”
Young Danish Masih works without break from 4 a.m. to 11 p.m., often in iron chains, on half a loaf of bread per day, according to Dawood Masih of the National Commission of Justice and Peace (NCJP).
“Due to the lack of sleep and immense physical and mental pressure, he is becoming weaker and ill,” Dawood Masih said. “And he is doing this bonded labor without any kind of leave, including sick leave, for the last one-and-a-half years, in place of his father Riaz Masih and elder brother Adnan Kashif.”
The boy’s father and older brother had been working for Cheema to pay off a debt of 142,000 rupees (US$1,640), but their employer was neither paying their monthly wages nor deducting the amounts from their debt, said Emmanuel Berkat Gill of the All Pakistan Minorities Alliance (APMA). Riaz Masih’s monthly wage was 3,000 rupees (US$35), and Adnan Kashif earned 2,500 rupees (US$29) per month.
Cheema also extorted land worth 35,000 rupees (US$404) from the boy’s older brother, again without deducting the amount from their debt, and ransacked the family’s house in Ali Naggar village, stealing Katherine Bibi’s dowry worth 200,000 rupees (US$2,308), she and Gill said.
“Being a rich, powerful and influential Muslim landowner, Cheema did all of this and also had the cruelty to not deduct the amount from the debt,” Gill said.
Suffering under Cheema in this way, the family decided to flee to Islamabad, 165 miles (102 miles) away, Katherine Bibi said. About 18 months ago, however, the peaceful life they had begun anew was shattered when Cheema abducted their youngest son, also known as Mithu, and took him to his farmhouse at Dhonikay village near Ali Naggar in Wazirabad.
“After all these cruelties, Ashraf Cheema owes us some amount, rather than us owing him,” an inconsolable Katherine Bibi told Compass by telephone.
She has gone to court to recover her son – both her husband and older son do not risk provoking Cheema by attaching their names to the case – and on June 10 District and Sessions Judge Chaudhary Muhammad Ilyas sent a bailiff to Cheema’s farm to secure the return of the 11-year-old.
“But the bailiff returned unsuccessfully without Mithu, as Ashraf Cheema, being an influential and rich landowner, was told beforehand about the raid by an anonymous insider, and he hid the child,” Katherine Bibi said.
She said that since the bailiff failed to recover her son, Cheema has hurled threats at her and her husband, saying, “After this raid by the bailiff, you will neither be able to get back your son, nor will you be granted a cancellation for your debt.”
After joint efforts by Gill of APMA and Dawood Masih of the NCJP, however, Cheema agreed that if Riaz Masih would work in place of his son, he would release the child, Gill said. When Gill, Dawood Masih and Riaz Masih went to Cheema’s farmhouse, however, the landowner went back on his word and refused to hand over the boy.
Contacted by Compass, Cheema said that no such boy works at his farm or fields, and that “someone must have misled you.”
Besides the court recognition of the abduction, however, Gill and other credible sources assert that Danish Masih works from dawn to dusk under a sizzling summer sun without any break or meal.
At press time local Christian leaders had petitioned the deputy superintendent police of Wazirabad to recover Danish Masih.