Ideas@TheCentre
Promoting the benefits of smaller government
Over the last 40 years, the size of government has increased substantially. Government spending relative to the size of the economy has increased even though Australia has come through a period of extraordinary economic growth, with sustained increases in GDP stretching back for decades. The economy has grown, but government has grown quicker still.
Spending across all 3 levels of Government has increased at an average rate of 4% a year since 1972. Today the government rakes in more than a third of everything this country produces. Around the world, decades of these misguided policies have created serious debt crises (particularly in Europe).
Australia is not yet in crisis but in the future we will face substantial challenges from an ageing population, rising healthcare costs and expected slower economic growth.
To meet these challenges, we must cut wasteful spending and stop the unbridled expansion of government. If government is not reined in, spending could exceed 50% of GDP by 2050, burdening future generations with higher taxes, higher debts and a further breakdown in society.
Without TARGET30, governments could be wasting $150 billion by 2021.
TARGET30 promotes the benefits of smaller government and aims to reduce government spending to less than 30% of GDP in the next 10 years.
The initial research in TARGET30 will focus on health, welfare and education, because together these areas make up more than 60% of governments budgets. TARGET30 will focus on ways that these essential services can be delivered efficiently and effectively, while reducing wasteful spending.
While forthcoming TARGET30 publications will deal in more detail with ways to cut spending, there are some practical steps we can take now to get us on the right track.
The starting point needs to be an audit of all existing government departments and programs to determine what programs are really necessary, and what programs are effective.
Obvious areas of inefficiency and waste should be cut immediately. This includes the billions provided in corporate welfare to the foreign car makers and others and the massive duplication of functions at the state and federal level.
To meet the challenges of an ageing population, we must spur improvements in public sector efficiency and productivity, especially in aged care and hospitals. This should be linked with improvements in public sector workforce productivity stimulated by appropriately rewarding good performers and, more importantly, making removing poor workers easier.
The CIS is excited to bring the TARGET30 campaign to you, and we hope that you will add your voice to the fight for smaller government, because smaller government means a bigger future for us all.
Simon Cowan is a Research Fellow at The Centre for Independent Studies and author of the foundation report for the TARGET30 campaign, TARGET30 – towards smaller government and future prosperity, released Wednesday, 6 March 2013.
