Chapter 696: Chapter 393, Hongjian Star Joins
Regarding the reforms of Fatchess Tri-Star, even if the plan devised by Osenia were to proceed smoothly, the Alliance would still have to endure continuous losses until they could break even after five years.
In the meantime, the Alliance is estimated to subsidize between 10 to 15 billion.
However, this is different from maintaining the old system with a net loss of two billion per year. The extra money spent by the Alliance could be considered an investment into the construction and reform of Fatchess Tri-Star, which would yield returns in the future. Such an investment is something Gu Hang is relatively willing to undertake.
As for whether the Alliance can endure the loss of 15 billion over five years… if there’s any doubt about that, it’s an underestimation of the Alliance’s capabilities.
Even without the complete reform on Korolya and with Rage Owl Star and Heijian Star still needing to provide substantial material support to Fatchess, these two foundational Alliance stars still have the capacity to cover the deficit of Fatchess Tri-Star.
And this is without considering the profits from the Alliance Shipyard.
…
Moreover, now that the Alliance has unified its taxation system, the expenses dedicated to the Star Realm Army can certainly be tax-deductible. Dragonhawk Legion’s involvement in this suppression of the rebellion war surely means that the Military Affairs Department should fund it.
Maintaining Dragonhawk Legion, regular personnel turnover and recruitment, ammunition consumption and equipment wear and tear, as well as garrison and training costs… when calculated, shouldn’t the Alliance’s annual investment equate to about one billion in tax currency?
The Military Affairs Department can simply pay and then deduct it from taxes.
However, maintaining an army is still a costly affair for the Alliance. The Rage Bear Legion is expensive, though few in number; the Korolya Salvation Army may be cheap, but with a population of 300 million, it can’t exactly be considered cheap either.
Korolya can still bear the Salvation Army’s three hundred million strong force.
Going forward, as reforms in Korolya continue and productivity improves, the financial pressure on the Alliance will be significantly reduced.
At present, Korolya’s annual production value can reach nearly twenty billion—compared to Fatchess Tri-Star, although it has an additional three hundred million people, its production value is still not as high. The Alliance is still losing money on Korolya.
However, one-third of Korolya’s Nest Capital has already advanced the reform strategy. Over the past year, the Alliance’s tax revenue from areas without reform was 11 billion; the concentrated production reforms in the reformed areas also generated a profit of 8 billion.
This is still achieved under circumstances where Korolya has suffered a population loss of over forty billion and continues to transfer populations to Rage Owl Star and Heijian Star.
It has already reached the yearly twenty billion tax revenue Korolya produced before the war.
The tax amount of Korolya is forty billion; the shortfall of the remaining twenty billion in past years was compensated through population taxes.
Gu Hang’s expectation for Korolya is that in the remaining four years of the tax exemption period, the population will be reduced to under thirty billion through transfers, and the various production values and profits will reach thirty billion.
If this can be achieved, then Korolya could be considered self-sufficient, no longer requiring subsidies or population taxes to meet the Imperial Tax.
As for the nearly sixty billion population that will continue to be relocated in the next five years, they will settle on Rage Owl Star and Heijian Star. With these two stars and the production value of the shipyard combined, Gu Hang hopes that after five years, they will achieve a production value of over twenty billion, and the Alliance can reap a profit exceeding six billion. By then, with the Imperial Tax from both places totaling about seventy billion, the Alliance would still have a surplus of over sixty billion after collecting seven billion.
Upon reaching this point, the Alliance could be considered an extremely powerful political entity within the Star Domain.
Self-sufficient with surplus profits each year, capable of producing most of the standard equipment required by the Star Realm Army, maintaining a Starfighter Battle Group and a Battle Nun Association, and capable of producing its own warships.
Although, under the structure of the Planetary Defense Force and the Star Realm Army, possession of a naval fleet isn’t allowed, nor is engaging in large-scale interstellar trade—an activity for which an Empire Commerce Guild merchant’s license is required.
However, such regulations have never been absolute, as many planets have their own fleets. Not for naval or interstellar trade, but for logistical transport needs, escort missions, deploying flexible defenses in planetary orbit, and for internal system anti-pirate operations—which all are perfectly reasonable requirements, so isn’t it reasonable to have some ships?
The biggest obstacle for most planets not having their own starships is not imperial regulations, but rather the fact that they can’t afford it; even if they can afford it, they can’t afford to maintain it.
But Gu Hang doesn’t have this worry. He can form an escort fleet since the Alliance’s jurisdiction already spans multiple star systems, which is a practical necessity. What if interstellar pirates come roaming? As for the cost, he can produce his own, further supplemented by his own shipyard; the costs of formation are controllable and low.
Even if we step back, Gu Hang can have the Alliance Fleet registered under Gu Commercial Firm, ostensibly as the firm’s merchant fleet, but in reality, as the Alliance’s naval fleet.
With both land and naval forces, at that point, the Alliance can truly be described with the words ‘rich and powerful.’
Not to mention, over these five years, Gu Hang, due to his position as the Star Sector head, could get his hands on Flying Wing Star. As mentioned in a previous conversation with Xu Dechen, Pei Desi has already been abandoned by the Parliamentary Faction. Without his older brother and support from behind, he simply can’t control Flying Wing Star.