Opinion & Commentary
Howard's obscene spending spree
Phillip Adams is right - 'the billions being showered on the electorate belong to the electorate' (Opinion, 28/9). Politicians are trying to bribe us with our own money.
Alan Wood (Opinion, 28/9), too, is spot on when he describes the government's proposed 'spending spree' as 'obscene' and a 'tragically wasted opportunity. The billions being squandered on new payments, allowances, rebates, subsidies, benefits, grants, safety nets and services are proof of over-taxation. What the government taketh away, the government giveth back come election time.
We are reminded of H.L. Mencken's comment that 'every election is sort of an advance auction of stolen goods'.
Our tax and income transfers system needs fundamental reform, not more tinkering. Earlier this year, The Centre for Independent Studies proposed cutting the top income tax rate to 40 per cent, raising the tax-free threshold above the welfare floor, indexing all tax brackets, and replacing current means-tested family payments with a single flat-rate per capita payment. These changes would ensure families do not encounter dispiritingly high effective marginal tax rates as they increase their earnings.
Commentators agreed that our proposals would restore rewards and incentives, but some thought they would be too expensive (we estimated the whole package would reduce government revenue by up to $13 billion per annum).
But all the proposed new spending since we published our proposals makes $13 billion look like chicken feed. The money was there after all. It would have been better used bolstering self-reliance rather than buying off different sections of the electorate with even more hand-outs.
Families have to live within their limited budgets. It's time the electorate demanded the same of their politicians.
Greg Lindsay is executive director and Peter Saunders is Social Research Director at The Centre for Independent Studies.
