The ongoing debate on the need to establish a new tax towards an unemployment benefit fund is brewing a real storm among the employed public.
For those without a blue-collar job (formal employment) to be victims of this tax it may sound like sweet music, the same way the Housing Levy has been to them. Anyone who has ever been retrenched or fired without notice may identify with this felt need (twice I lost teaching jobs without notice), so I do understand this dilemma perfectly well.
This however opens a valid question as to whether it is the business of the government to cushion people who get retrenched or have their contractual employment terminated for one reason or the other. Is it not the responsibility of any abled citizen to plan their finances effectively to anticipate such eventualities and create buffers for them?
From where I stand, this bill will not go anywhere, at least not in the foreseeable future for 3 reasons:
- The current government has already bitten too much than is necessary with the Housing Levy, NSSF, the proposed NHIF increments & a rapt of other quite unpopular taxes -supporting such a bill for the KK administration will be madness at best or political suicide at worst;
- Nobody with a Payslip in this country can take it anymore -we’ve had too much to bear any further levies lying down. In as much as we have a civic obligation to pay taxes, there is a limit. Most people also completely distrust the government to administrate such a fund even if it were to succeed; and
- No sane employer would want to carry any more burden to fund fancy ideas from politicians whose only known trade is ‘wanton extravagance’ on the blood and sweat of poor masses and struggling employees.
Having said that, let us address candidly the question of planning for emergencies and eventualities at the personal finance level.
- Ultimately, your finances are your personal responsibility for anyone of the majority age. This can never be transferred to anyone else no matter what. The order of God is for any living creature to be able to feed itself from a certain age. Even the wild animals understand this pretty well. It is only human beings in the animal kingdom who breach this order of God and expect to live on the sweat of others -most developed countries have already attained this order of life;
- All personal finance coaches advise setting aside a buffer of at least 6 months at your current lifestyle level -this must be in liquid cash or investments that you can easily convert into cash if need be. However, for whatever reason most people chose the path of living hand to mouth from one month to the next one. If you are one of them, this is the clearest indicator that you have no control over your money and sooner rather than later, things will eventually catch up with you;
- While we are social beings, this does not take away individual responsibility to plan for your money – in this country, WhatsApp groups and fundraising have been abused to cover for individual failures to plan for their finances. It is not uncommon to find people ‘eating live with a BIG SPOON’ at one moment and turning into begging the next as soon as they lose their primary source of income. While people may provide support out of human compassion, they have no financial obligations to you – everybody is having their own struggles in these hard economic times. So do not start shouting out how friends, colleagues, family or acquaintances abandoned you at your low moment. Instead, learn how to plan your money and life while it’s raining, Dry seasons do come to all of us;
- Good financial mastery includes understanding your working and economic environment – while no one plans to lose their jobs, it is a reality in the modern business environment. Anybody who still believes in permanent and pensionable (PnP) employment terms in this 21st century is living in a fool’s paradise. Even governments that collect taxes are being forced to lay off staff or engage them on short-term contracts. It thus becomes a personal responsibility to understand, internalize and factor this into your personal financial plans & management;
- Government benefits are not meant to provide any comforts but only to give a bare minimum to survive -even if this unemployment fund were to become a reality, it would not offer an indefinite benefit for loss of employment income. At the moment, the proposal is only to cushion those who lose jobs for an initial 6 months. With the level of incompetence and bureaucracy of Kenya’s successive governments, it will probably take ages before you can even access such a benefit when you deserve it.
The long and short of it is that no one under the sun will ever be able to meet your financial needs and responsibilities except yourself. The earlier each one of us comes to this terms and reality, the better.
Take charge of your money, understand the times we are living in and plan accordingly. You will thank me later!