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The money

The last update came only a couple of days after Huey's extensive end of term report, so to save a few lines, I chose not to update on the finances that hadn’t changed enough to warrant reading, after an interesting few days its time to update the nation.

We started the term with a total of 390,209.08 in cc (298,392.43 of which was located in orgs) and 1,235.62 Gold (39.16 was in orgs, mainly spread through many orgs in small amounts)

The position we are in now ( day 2462 when this was written) is with a total of 518,920.61cc (278,919.57 of which is in orgs) and 1,295.62 Gold (89.16 of which is in orgs)

This is an increase in cc of 128,711.53and an increase in gold of 60

The change in gold resulted from the purchase of 100 gold in the BoE for training grounds, 50 of which was handed out, 10 was immediately repaid (to the country accounts through myself) as a consequence of the irritatingly short promotion and the recipient being slightly short on gold. Others have either upgraded their TG’s or have retained the gold for a future sale. All will be expected to repay within 60 days

There have also been 2 loan repayments

One payment is pending transfer to the country accounts.

The substantial increase in CC is as a result of the salary driven increase in work tax that will be expanded upon later in the article.

This brings us to a point where we have over 3 months worth of reserves at our minimum expected spend per month of around £150k which is a positive position to be in following the treasury theft.

Any surplus beyond this amount the MoF will be looking to distribute back to the citizens of the eUK. As many are struggling to afford the cost of work tax it has been put to congress for discussion as to how to administer it. Whilst there are many ways that it could be done a middle point between fairness and being realistic from a logistical sense needs to be found.
As this is an issue where one course of action won’t please all it seems our elected representatives will be better suited to arguing to a mutually acceptable position than myself and Huey deciding alone.

Whilst MM fishing isn’t being carried out this term, we will be looking into the potential profitability of printing money over the next few days following the consistent drop below 200cc/ gold.

Graphical and Tabular representation of income/expenses


This table has come out a little smaller than expected from the preview so a zoom of 150% to 200% maybe required

On to an overview of our current economic situation.


Financial qualms

Over the last couple of days the debate over tax levels has once again risen. People always want lower taxes, governments always want higher. This had been fiddled with quite a lot over the past months where we had to move from a position where we made either a loss each month or barely broke even. If windfalls aren't included (competition gold) it would have probably been about 5 months since we ran at a profit on just MPP spending, and significantly worse given the CO spending in the period of conflict we had with Argentina, Canada and France.

Last month we had in my opinion hit a happy medium where taxes generated enough funding to meet our needs with a little left over, this allows for a rainy day. As we all know wars aren't won with small CO’s this is an important part of government finances where 6 months profit can easily be wiped out in a single conflict.

As one would expect from that when the issue of lowering work tax was raised again, it wasn't met by myself with much enthusiasm. We had a tax system that worked and at an average wage of around 35cc gave a cost of 0.7cc per factory. If you worked on a aluminium mine producing 200wrm daily this would sell for 6cc @ 0.03 and 8cc @0.04. Loosing the 0.7cc wasn't unsustainable in the slightest.

Contrast ourselves with other nations, and we do infact have one of the lowest rates of most comparable nations, with only france who are permawiped on 1% tax and a couple of other less comparable nations, with equal or lower work tax rates. this combined with our above average core region bonuses (which we have the majority of the time) give our producers some of the most profit conducive conditions available.

I'm all for low taxation and keeping peoples own money in their pockets, however this shouldn't come at the expense of the government being unable to pay for the day to day spending that keeps our bonuses as often as possible.



Recent change

Recently there had been a small but significant rise in wages following the introduction of housing which caused our tax take at 2% work tax to increase slightly to around 6.5k per day

Since the start of this most recent round of debate there has been a surge in tax take with this reaching over 20k the day before last and over 30k yesterday. It looks to be around the same today.
the reason for this is a dramatic and unprecedented rise in average wage. Whilst market jobs are on for around 40cc the national average has hit in excess of 150cc. This isn't something the market would generate itself as there would be no reasons other than what I'm about to suggest for employers to raise wages in such a way.


Reasons

Potential reasons for this rise in average salary are somewhat of a grey area, we have no real way to prove or disprove them and as such any ideas are somewhere between speculation and guesswork.

One part of this is the recent introduction of housing and the wage rises as a result of that, following that a mission that required 5 worker clicks drove salaries higher. Whilst in theory this could produce this result I’m hesitant to believe this is the entire reason. Firstly I would have expected a rise in average to begin immediately after these two events. This is not the case and no spike was seen as a result of housing and the increase from the worker based mission had a larger lag than you would expect.

The other issue I have with this is that we are the only country that I can see (without trawling through the economy pages of the entire world- I'm sure someone will) that has had this average wage rise. Both larger, smaller and comparably sized countries have average salaries ranging between approximately 25-40cc dependant on their various region bonuses and tax policy.

I can’t think of any genuine reason that the UK’s production and factory base is so structurally different from the other nations that it could exhibit such a drastic variance from the market fueled wages seen in other nations.

This only leaves the option of foul play where someone for some reason is artificially raising prices. Its improbable that they will make a direct profit from this however given the somewhat loose border controls over the last few terms, its safe to say anyone from any country with absolutely any motive could be behind this.

In before “you’re too suspicious, who would spite themselves to spite us” in the absence of a feasible explanation for the rise as outlined above, what else can you be left with?


My hypothesis

Someone with a vested interest in lowering work tax for their own financial gain has artificially raised the average salary. By paying one worker a huge salary ( I would imagine someone that would pay it back to them) it can raise the average substantially. Now yes, they would lose some money on tax going to the government, however as a wealthy producer chances are they are better prepared to weather the storm they created.
Joe public has small margins on WRM production and as such is less able to cope with the rise in work tax as a result of the wage increase which increases the cost per company. This puts pressure on the government and congress to lower rates to ensure people are making a profit.
As such work tax lowers, people are happy that it doesn't cost as much and the artificial salary increase is removed whenever deemed applicable.

Either this or they simply wish to spite us and have more money than conscience.

As (hopefully) conveyed to congress and recently enacted in Talon’s successful proposal, I support the change down to 1% work tax to relieve some of the pressure. However work tax rates will still be significantly higher than we would normally see.

If the average wages drop afterwards, we could look into alternative ways of raising revenue through VAT IF we look to drop below the 5k per day limit (150k per term) I would predict we need for day to day running and CO allocation. If wages remain high and revenue stays above this threshold, I would suggest not adjusting anything further.



Highlights a weakness

This highlights the ability for not only domestic people with their own interests to abuse work tax, but for foreign nations to abuse it, if this was enacted by two citizens of foreign origin with uk citizenship with perhaps a 1,000,000 salary whilst we were under a wipe, given 1000 citizens at 40cc average this could raise the average salary to around 1000 causing work tax to be 20cc per day crippling the country. Under the wipe they would keep 80% of any tax take spike and simultaneously stop our production ensuring we remain wiped.

Granted, not everyone could get their hands on that sort of cash but it wouldn't be the first time foul play has been sponsored by a government.

This hypothesis isn't by any means conclusive and with no substantiated evidence for it it is purely theoretical, however I doubt anyone else can explain a reason for the rise in average wage given all mentioned above. I do of course welcome any constructive ideas.

In lieu of these developments your Co-Minister of Finance Huey George has drafted a profitability calculator to help citizens understand how, when and how much profit or loss they are making.




Companies and Profit

The Ministry of Finance would like to offer our support to the business owners of the UK with some guidance of calculating profitability;

Company Profitability Formula

If you know the correct formula to use to calculate the profit (or losses) your companies will make. Keeping a track of your companies’ finances will be easy. Below are a range a examples;




Return on investment(ROI) calculations can be used in conjunction with any of the formulas

Raw Material Example

Using the Food/Weapon Raw Material Production formula the MoF has worked up a quick example of course in a variable market the cost of food will change or you may sign up to the NHS or a MU which provides food. We've also included 1% and 2% rates of Work Tax which can have a significant and variable impact (as we've recently seen) as it's the calculation of the average net salary paid in the last 30 days.,


This table has come out a little smaller than expected from the preview so a zoom of 150% to 200% maybe required

We'll leave the example and/or your own calculations do any analysis you require however the Ministry of Finance can be contacted if any specific advice is required regarding your own set-up of your raw material companies or if you'd like a copy of the above spreadsheet.

Raw Material Company Advice and Work Tax

Long-standing advice that the MoF been aware of has been to invest Aluminum...if you go back far enough Saltpeter. Rubber has always had a fairly substantial return on investment (ROI) time however has always been considered a good investment if you can afford the initial outlay. To pick up on Fishery, Cattle and Deer generally the investment advice we've been aware of is to produce WRM as the turnover of produce has been greater than FRM however all three can be considered profitable. So the citizens which WAM with these companies would make a profit at a 1% or 2% Work tax rate.

The importance of Work Tax has become very relevant over the past handful of days and the example above is calculated based on a Work Tax which is calculated based an average net salary of 100.00 cc paid in the last 30 days. If the average net salary decreases to 40.00 cc Iron, Aluminum, Grain, and Fruit once again become profitable although if the average net salary increases profitability will decrease in Aluminum, Saltpeter, Rubber, Fishery, Cattle and Deer. Another important factor is Country’s resource bonus currently the example above assume 60% food and weapon bonus, if we loss or gain regions this could change.

Weapon and Food Factory Example

Below are examples the MoF have worked up for Weapon Factories and Food Factories use the Food/Weapon Production (Work as Manager) formula of course in a variable market, the sell value, the cost of food, raw material (while not used in the example some calculations are displayed), workers etc will change or you may sign up to the NHS or a MU which provides food. We've also included 1% and 2% rates of Work Tax as the importance of work tax is just as valid.



These tables has come out a little smaller than expected from the preview so a zoom of 150% to 200% maybe required

Once again we'll leave the examples and/or your own calculations do any analysis you require however the Ministry of Finance can be contacted if any specific advice is required regarding your own set-up of your Food/Weapon companies or if you'd like a copy of the above spreadsheet.

Weapon and Food Factory Advice

Generally the advice has been to invest in a high as possible Weapon Quality Factory as it's very difficult to turn a profit let alone recoup your investment at times in this market with lower Quality Weapon Factories. In terms of Food Factories, the turnover of produce is lower however profitability tends to remain even in the lower quality factories. Again an important factor is Country’s resource bonus currently and the examples above assume 60% food and weapon bonus, if we loss or gain regions this could change.

Housing Industry Profitability

Finally an examples the MoF have worked up for the Housing Industry using the Food/Weapon/House Production (Workers and Workers Produce Raw Material) formula and Food/Weapons/House Production (Workers and Purchase Raw Materials) formula Once again in a variable market Workers Wages, Raw Material Cost etc will change.


This table has come out a little smaller than expected from the preview so a zoom of 150% to 200% maybe required

Once again we'll leave the example and/or your own calculations do any analysis you require however the Ministry of Finance can be contacted if any specific advice is required regarding your own set-up of your House Raw Material Companies or House Factories or if you'd like a copy of the above spreadsheet.

Housing Industry Advice

It's a new market so the MoF advice is be careful you are making a profit as some of the current sell values seems like an indication that some houses currently for sale won't return a profit of course the wage estimates or raw material cost in the example could be too high compared to your own specific housing industry so it's best you work up your own answers. Again an important factor is Country’s resource bonus currently and the examples above assume 20% house bonus, if we loss or gain regions this could change.



Close

For any further information don't hesitate to contact any of your MoF team.

ArgoFookYourself - Minister of Finance and Governor of the Bank of England
Huey George - Co-Minister of Finance