July 28th, 2015 | Uncategorized | 0 Comments
You don’t have to be a brain surgeon to understand the budget problem. Governments are spending too much of our money.
Australian Medical Association president Brian Owler – a neurosurgeon by trade – sees it differently.
“There is clearly a revenue problem,” Owler told the press club last week. “It’s not an expenditure problem.”
Owler’s diagnosis is seriously wrong, I write in The Australian today.
The revenue problem, if we are to call it that, is that the state takes too much of our money. Far from falling, government revenue has risen by 0.5 per cent as a proportion of gross domestic product since the 2008 financial crisis.
The trouble is that spending has risen five times faster, from 35 per cent to almost 38 per cent of GDP. Kevin Rudd and Wayne Swan’s emergency spending levels have become the new norm, while Owler and countless other rent-seekers demand it should be pushed even higher.
In a submission by the Menzies Research Centre to the National Reform Summit Tony Makin and Alex Robson write:
Australia therefore unequivocally has a government spending problem — not a revenue problem. Australian governments should resist the temptation to increase the tax burden under the guise of ‘tax reform’, and instead focus their efforts squarely on reversing the irresponsible fiscal profligacy of recent years.
Makin and Robson have the facts on their side. The evidence counts for nothing in the debate about whether to cut spending or raise revenue, however. It is a debate framed by ideology. It’s a debate between those who argue for a greater role for the state and those who believe that individuals, as a general rule, are best placed to spend their own money.