Tuesday, September 26, 2006

The Australian budget - bad value for money

The Australian budget is viewable online, and on page 30, the following summary of government revenue and spending appears:

Lets deal with the revenue side:

  • $115 bil is raised through income taxes. This is a tax levied on people who work and generate an income. So the Australian government punishes all of those that engage in profitable activities, those who work hard, those who exchange their labour for an income.
  • $58 bil is raised in company taxes. So once again, there are thousands of businesses who are being punished simply for making a profit and being succesful. These are businesses that are forced to deal with enough troubles, to make complex and dynamic decisions every day, to meet consumers demands, to employ labour and capital, to outperform competition and to operate as efficiently as possible. As if they didn't have enough to worry about, if they are lucky enough to make a profit, the government punishes their success with the 30% corporate tax rate. Its a wonder we still have such a strong robust economy with a diversity of businesses, and its clearly an outcome that has occurred *despite* govenrment intervention and not because of it.
  • $14 billion raised through petrol excise. This affects the millions of motorists every time they fill up their tanks. Just because they choose to run a vehicle, for their own business or personal use, they are being punished with a tax. This would cost each of the millions of individuals, as well as families, hundreds if not thousands of dollars per year.

And now.. given that we have all been taxed coercively, and had the money forcibly removed from our pockets (not paying taxes is a punishable offence), what do we get ? Given that the millions of individuals all would have done certain things with the savings, that they have their own individual and unique priorities, lets see if the government can spend it better than they can. Its hard to believe, especially when you have poor individuals who struggle to pay for food and shelter and clothing. When there are young and old people alike who are burdened with debt and putting hundreds of dollars towards relieving that debt would be valuable.

Where does most of it go ? Down the toilet.. thats where.
  • $91.7 bil towards Centrelink *EACH YEAR*! What an absolute waste. This is more wealth than the entire economy of some smaller nations. The government is subsidising failure and need. If an individual can show that they have failed to earn an income, that they have lots of needs, then they qualify for welfare. Does this eliminate poverty ? Is this money well spent ? Does this improve things ? Does this lead to a better future and growth ?
    Well, if it did, then the need for welfare would diminish over time. If poverty were alleviated, then you wouldn't need as much welfare in the coming years. But why, then, does the funding for Centrelink balloon and grow at a tremendous rate ?
  • $5bil towards community services and culture. What the hell ? What is this ? Why role does government have, by giving money to communities and to cultures ? Whats the point ? Would Australians really want to spend so much on these "feelgood" things if they could choose ? Do community services and culture put food on the table, or pay the bills ?
  • $29 bil towards "General government services". What the ?! Is that the cost of our bureaucracy and administration?
  • $39 bil towards health. So how does our public health system compare to the private system ? Why do we even need a public system, if people can already purchase private health cover ? We don't have public toasters and televisions, so why public health cover ?
  • $16bil to education. Same arguments as above with health. Why should government be involved in the purchasing of education ?
What I find most informative, is that although the Australian economy continues to grow and standards of living improve, the Australian government always finds a rationale for increasing its size, its scope, its power and its revenue. Health and education are 2 of the most troublesome industries, plagued by government bureaucracy, inefficiency and lagging standards. Although their funding has ballooned over the last few decades .. somehow, we are being constantly told by the media that the cure for all problems is.. more money.

Now look at the private sector. Look at televisions and toasters, automobiles and computers, mobile phones and appliances, food and medicine. All of these things have improved over time, AND gotten cheaper and more affordable. If you want the same outcome for health and education, stop trying to manage them from a central government authority and let the businesses and millions of consumers in the market manage it.