Taxing times for economic sense

THE declaration by Tony Abbott this week that increasing goods and services tax (GST) was more acceptable than increasing the Medicare levy is just the sort of issue that cuts across all we face today.

I am not sure whether to be gobsmacked by the arrogance or the ignorance of this statement.

It presumes that the only solution available to the government is to increase revenue with no apparent regard to the need to improve efficiency or efficacy of the money they have.

Aside from asking for more money, it seems to me the government is proposing a business as usual plan. Even the most radical changes proposed by either side of politics does not result in any significant change in the way the machinery of government really works.

In 1972, spending across all three levels of government accounted for approximately 27 per cent of gross domestic product (GDP) in Australia. In 2008, this had grown to just under 36pc. In 2014, our combined government spending has reached 39pc of GDP.

All of this money is raised annually through borrowings or taxes.

The borrowings must be repaid eventually and so our political masters have gleefully tried to pass the cost of our government on to future taxpayers on a grand scale.

The truly scary aspect of the proportionate growth of government spending is that over this 40-year period, we have seen comparatively small investment in nation-building infrastructure that will provide significant benefit to future generations.

The truth is we are overrun by a bullying and bloated bureaucracy that seeks to interfere in every level of our lives, creating legislation for legislation’s sake.

For example, I am intrigued by a federal department of health that employs well over 4000 people with an annual wage bill approaching half a billion dollars, none of whom, to my knowledge, provides a single front-line medical service.

The public service is allowed to operate with impunity. It can stand behind a range of processes to obscure its accountability to the people it is supposed to serve: the public.

The situation our country faces is that government is too big, too intrusive, too constraining and evidently too corrupt.

Government is supposed to foster and promote commerce and provide basic social support where needed. It should be committed to a symbiotic relationship with taxpayers, providing a valuable return in services for the taxes it takes. Instead, we see a parasitic public service and government that diminishes the opportunity for industry.

Instead of looking inward to meaningfully cut costs in non- front-line service positions, we see a bureaucratic industry burgeoning with key performance indicators (KPIs) around internal process, rather than measurable improvements in the performance of its services for those that pay taxes and ultimately its wages.

A few years ago, Kerry Packer was called into a parliamentary inquiry and was asked whether he had evaded tax. He replied: “I am not evading tax in any way, shape or form. Of course, I am minimising my tax. Anybody in this country who does not minimise his tax wants his head read. I can tell you as a government that you are not spending it so well that we should be donating extra.”

Mr Packer’s statement is as true today as it was then. The second half of this great quote is essential. The assertion is that the government is not spending the money it currently gets well enough on our behalf to justify being allowed to take any more.

We have allowed the 'party first' culture of our political duopoly to dumb down the crop of politicians who occupy the various houses of government in this country. The pursuit of power by forcing solidarity has meant too many of our elected representatives are no longer prepared to stand up honestly and call bad policy and bad government when they see it.

Sadly, these politicians become institutionalised and quickly promote the status quo.

It is important to understand at this point that the failures in state planning rules and federal environment assessment guidelines is not driven by ministerial agendas as much as it is by ministerial incompetence. The bureaucracy is running the country in the real life version of Yes Minister or The Hollow Men and our ministers are incapable of reigning them in.

This is how we end up with governments so keen to court big coal and approve a mine on the Liverpool Plains or the Darling Downs. This is how we find ourselves as a nation so willing to sell our children’s legacy to the highest foreign sovereign bidder.

I have talked a lot about the need to change the way government makes decisions. If I ran my farm the way that our country is being run I would not get any sympathy from my banker. We are the government’s banker and it is time we stepped in.

I have been accused of political naivety by some of the “party first” foot soldiers, but I reject that assertion with some contempt.

Einstein’s definition of insanity is to keep doing the same thing while expecting a different outcome. I would argue that any politician who continues to promote the current political circumstance is insane and quite seriously a threat to our children.


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