Social Climate Tech News

Thu 07 07 2022

Increase contributions at the same rate as inflation

by bernt & torsten

Right now, parallels are being drawn to the 1970s with a prolonged recession with low growth, high unemployment and high inflation. Those affected are those who already lived with small margins before: poor pensioners, single mothers with precarious employment and the long-term unemployed.

Governments must, therefore, among other things, ensure that the contributions to the most affected follow inflation. 

While vulnerable groups in society find it difficult to get their finances together to pay for housing, food and getting to work or school, the government, encouraged by seven out of eight parties, chooses to prioritize high-income earners who can afford to drive large heavy vehicles – those who do not can afford a car get nothing at all.

This is unwise, inefficient and historyless.

That the deep economic crisis of the 1970s hit the world so hard was largely due to the fact that we were all deeply dependent on oil. Then, just as today, the whole of society was hit by the tripling of oil prices over the course of a year between 1973 and 1974.

It should therefore be obvious to everyone that the world’s only way out of a long-term economic crisis is that today we instead have an enormously better preparedness to switch to fossil-free energy sources, to a fossil-free economy. The business community wants to invest, the people profit from it, and politics must follow.

Instead lowering the price of fossil fuels is headless. This means increased emissions, and more money for Putin, and at the same time as it damages the economy in the long run. In addition, it is the support that is largely paid out to people who are not in need of state aid at all.

Now the governments must act quickly and efficiently.

It is important to support households when prices rise. 

  1. Halve the food VAT. Children can not eat gasoline. For those households that are already turning over every penny, rising food prices will mean that they do not have enough to satisfy all their stomachs for the rest of the month. At the same time, halve the VAT on restaurants whose businesses are hit hard by the more expensive food prices. 
  2. Inflation-proof contributions. Not all contributions today are inflation-hedged, especially those that have a major impact on, for example, poor pensioners. The housing allowance, child allowance, housing supplement and maintenance allowance should be increased permanently and directly so that the purchasing power of these allowances is not eroded.
  3. Lower the price of public transport. Regardless of where you live and whether you have a car or not, you must be able to get to work and school. Household expenditure is now higher in several areas at the same time. Then we can not continue to have the high prices for public transport that we have today.
  4. Increase student support and pay extra support for the month of July to all students. For those who study, the economy is already scarce. Their student aid must keep pace with price developments when inflation rises so they can afford to continue their studies. Over the summer, give an extra payment to help them through the tough summer months when inflation is expected to peak.
  5. Reduce taxes in sparsely populated areas and provide extra support to those living outside the cities. Those who live outside the cities have longer distances to school, jobs and social services. They also have higher energy costs. Then they need support to cope with the new fuel and energy prices.

In the face of an impending economic crisis, in the midst of a burning climate crisis, we have no time to lose.

When chances of succeeding well consist of investing in quickly reaching a fossil-free economy that at the same time increases the chance to reach climate commitments, subsidies for fossil fuels are the absolute worst alternative.