Business Articles Analysis
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Assignment 1 Business Articles Analysis
Luyang Zhao (020972121)
Feb 15th 2012
BUS106ZO
Professor Jane Forbes
Summary of Article One
Jim Flaherty, the Finance Minister, claimed that spending cuts needs to be implemented in various degrees within government divisions based on the reflection of 2012 budget of the Conservative government while preserving straight distribution of national services to Canadians. Besides, He implied the next government budget that may involve public sector pension amendments.
Some thought making a reduction in the munificent pension scheme for members of Parliament could be an effective strategy to promote public pension amendments. The New Democrat MP, Joe Comartin, had an opposite opinion on public pension amendments could result in government savings. John Gordon, the president of the Public Service Alliance of Canada, was still worried although he had been informed by Mr. Flaherty that public pension would remain after labour unions increased the contribution ratio to 40 percent.
The government goal is to save $4-billion a year at lowest from the $80-billion annual expenditure. Different divisions were required to cut off 5 percent to 10 percent depending on the services provided. (Curry and Bailey B8)
Business Topic
The article “Flaherty says departmental cuts to vary widely” (Curry and Bailey B8) is mainly related to Chapter 3, “The Role of Government in Business”, from the Text Book (Nickels 54). This is because both the textbook and the article discuss the influences to business and society from the government decision making on federal budget and expenditures. The textbook introduces the government role from the following six categories, “Crown Corporations”, “Laws and Regulations”, “Taxation and Financial Policies”, “Government Expenditures”, “Purchasing Policies”, and “Services” (Nickels 56). Most of these categories are closely related to each other, and have been discussed in the article.
First of all, the “budget cut” decision based on the “2012 federal budget” (Curry and Bailey B8) mentioned in the article is related to the federal financial taxation policies. Either increasing tax or decreasing government expenses can reduce the “federal deficit” (Nickels 67), and the government decides to cut “government expenditures” through the financial policies (Nickels 71).
Secondly, in order to reduce “government expenditures”, one of the financial policies that government may implement is to reduce the “public sector pension” (Curry and Bailey B8), which is the expense of “welfare” and “workers compensation” that government disburses (Nickels 71).
Last but not least, at the same time reducing expenses, government is still trying to ensure the “services” provided, for instance, the “Industry Canada” mentioned in the textbook (Nickels 75). The cut rate may vary depending on the significance of the services provided (Curry and Bailey B8).
Business Terms
Federal budget: A comprehensive report that reveals government financial policies for the coming years (Nickels 69).
Explanation: The Conservative government 2012 budget had shown the importance of reducing government spending in terms of amending the public sector pension while protecting the straight delivery of services to Canadians (Curry and Bailey B8).
Labour: People have always been an important resource in producing goods and services, but many people are now being replaced by technology (Nickels 10).
Explanation: Labour unions mentioned in the article were representatively playing an important role in affecting the employee share of pension contributions (Curry and Bailey B8).
Pension (pension funds): Amounts of money put aside by corporations, non-profit organizations or unions to cover part of the financial needs of their members when they retire (Nickels 273).
Explanation: The article mentions that not just government but also many private and publically traded corporations are struggling with pension liabilities; besides, it also refers to different attitudes about if public sector pension amendments could possibly lead to government savings. (Curry and Bailey B8)
Personal Impact
Although the fact mentioned in the