Taxation and Fiscal Policy

CountryMinded is committed to maintaining and improving the social services expected of Government.  It is essential that the public expectation is tempered and informed with a clear understanding of the costs and benefits of these services. 

A key and increasing failing of the political system in Australia is the tendency for public service programs to be driven by overly and increasingly overtly partisan party politics.  This means that the cost benefit analysis, if conducted at all, is in terms of the political advantage of the party proposing the program instead of the appropriate return to the community, taxpayer and/or the nation.

Increasingly we see a political system preoccupied with short term political gain capturing the public service and in turn distorting the essential connection between the public service and their real “customers”, being the taxpaying public.  This leads to a public service that is predisposed to short term planning reflecting the term and tenure of the government of the day. 

In spite of our growing national debt, Australian Government revenues have been increasing year on year suggesting that as a nation we do not have a revenue problem.  At the same time, front line services have declined year on year in real terms and real investment in nation building infrastructure is lagging badly in proportion to previous generations.  These two factors indicate that Australia has a resource allocation problem with an inference that crudely applying more money does not equate to better service delivery.

Over the past forty years spending by all levels of Government has increased as a proportion of GDP from approximately twenty-seven percent to nearly thirty-nine percent.  At the same time, we see infrastructure and services, including in health and education, declining disproportionately and even closing down completely.  Government spending is out of control and grossly inappropriate to function.

Government does not need to increase overall tax rates, nor does it necessarily need to cut social service provision.  Government needs to ensure expenditure is efficient and appropriately targeted.

The Australian Government needs to enforce its tax regime fairly on all participants in the Australian economy by ensuring larger corporations cannot unfairly evade tax by shifting profits offshore.  At the same time, it needs to stop the wanton waste and inefficiency in public service spending. 

There is ample evidence to support the notion that Government can and must do more with the revenue it receives.  There are more public servants than ever before, delivering fewer and inferior frontline services.  No business could survive operating with the inefficiency of the public service and objective merit based key performance matrices must be adopted and applied within the public service, including an independent merit based review of the performance of personnel including politicians.

Modelling suggests that freeing up small business and providing increased incentives for essentially best practice by mitigating commercial risk, especially in the agricultural sector, will deliver increased revenues to Government through increased operating profits.  At the same time this modelling indicates regional centres will retain higher populations, better utilising existing infrastructure.  Similarly, this modelling indicates the resulting increase in Government revenue will be higher than the cost of the risk mitigation.  This makes this type of investment cash positive and therefore essential. 

Novel funding models that incorporate a commercial partnership with the private sector to deliver desirable public amenities or outcomes that provide opportunities for increased efficiency in the application of public funds.  The Clean Energy Finance Corporation is one such model that increased private sector investment in renewable energy projects and at the same time provided a cash positive funding model.

Australia is ridiculously over governed with three levels of Government as a result of the Federation model and structure.  While structural reform is unlikely, it is clear that operationally there could be significant improvement in efficiency of both the collection and distribution of public monies across the three layers of government.  The unnecessary duplication of bureaucracy is an obscene and unnecessary waste of taxpayer monies and delivers very little in frontline services. 

An example of this duplication lies in health.  While Health is a state portfolio the Federal Department of Health employs over five thousand three hundred (5300) people and delivers almost no frontline services if any.  CountryMinded is not suggesting we do not need a Federal Department of Health and we acknowledge some aspects of the portfolio are exclusively federal, it is effectively an administration department and hard to justify to that extent.

There are a number of taxes that are simply bad for business.  Payroll tax is a prime example of a tax that is a major disincentive for small business to expand and increase employment opportunities in the community.  Obviously this example is a state tax as opposed to a federal tax which highlights the problem of the community being taxed independently by three levels of government and then having those tax dollars move inefficiently between those three levels of Government.

CountryMinded would prefer to see a single simple tax point for consumers. The Goods and Services Tax is an appropriate and relatively efficient tax model and potentially should be broadened, but any changes should come with the abolition and or reduction in other taxes

CountryMinded would prefer a streamlined geographic distribution of funds based in part of population/Gross Domestic Product and in part on economic contribution to Gross National Income.  Infrastructure investment decisions should be informed and supported by objective cost benefit analysis in terms of long term benefits to Gross National Income as a key index in lieu of Gross Domestic Product.

Any infrastructure spending on public service infrastructure supporting or prescribed for administration of government or public services should be reviewed independently and benchmarked to similar commercial infrastructure investments.

CountryMinded is committed to an essential, motivated and empowered public service sector.  The Government and the nation cannot operate without a viable public service sector.  However, it is imperative that there is a concerted effort to ensure that public servants are deployed in roles that actually add value and improve the efficiency and effectiveness of the delivery of services.

CountryMinded is committed to limiting the size and intervention of Government.  There is a need for a more commercial and objective process of review of public spending initiatives and a meaningful application of that rationale.   Government needs to adopt a mindset that there is no reason to accept that the public service can’t match private sector operational efficiency and effectiveness.

Government revenues should increase naturally with an increase in the affluence of the nation through considered policies that actually support domestic industries and businesses that provide real development and employment opportunities, with a particular emphasis on small business.

CountryMinded will work to implement stable non-partisan fiscal policies with the aim to minimise uncertainty that arises with every change of government. It is imperative that consistent, effective and workable policies are developed and understood by all sides of politics.  CountryMinded will work with all sides of politics to particularly develop greater understanding of rural and regional industries and communities.

Specifically, CountryMinded will pursue policies that will:

  • abolish state based payroll tax;
  • abolish stamp duty;
  • oppose unmitigated increases in the overall rate of tax, particularly on small business;
  • consider economic performance in terms of Gross National Income rather than just Gross Domestic Product;
  • implement fiscal policies that put downward pressure on interest rates and the Australian dollar to improve the competitiveness of domestic industries;
  • close tax loopholes to ensure all companies participating in the Australian economy pay appropriate and equitable taxes, regardless of their country of origin;
  • phase out negative gearing;
  • increase revenues by aggressively attacking and abolish inhibiting regulation and needless government intervention and compliance costs and conditions on domestic enterprise;
  • make bureaucracy accountable through thorough commercial cost benefit analyses;
  • attack Government waste at all levels;
  • provide public sector investment in a range of true nation building infrastructure initiatives, such as dams, roads, railways, ports and airports to facilitate efficiency gains and improve domestic industry competitiveness;
  • support novel funding and tax models to encourage private sector investment in sectors with public amenity value.

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  • Warwick Tweedie
    commented 2016-06-23 15:48:32 +1000