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Health & Education vs Welfare

August 20th, 2003

Peter Saunders (the CIS one) has a piece in today’s Age about people’s responses to public question on taxation and public spending. He correctly observes that it all depends on what question you ask but gets the main issues wrong. Saunders makes a big deal about status quo bias, arguing that the big difference is between questions that ask “tax cuts vs improved services” and those that ask about “higher taxes for improved services”. The ACTU gets 76 per cent in favor of improved services vs tax cuts, whereas the CIS found only 12 per cent in favor of higher taxes.

The status quo effect is real, but Saunders ignores the big difference between the questions. The ACTU asked about health and education services, whereas the CIS asked about welfare. An ANU question asking about “social services” came in halfway between the two. This is consistent with a string of findings going back to EPAC surveys in the early 90s which show that people are much keener on health and education spending than on higher welfare payments.

Reading the data, most people are happy to keep welfare payments where they are, though more would prefer a cut to an increase. On the other hand, most people would support higher taxes for better education and health, though of course they’d prefer other people to pay the higher taxes.

Even given his relatively recent arrival on our shores, Saunders ought to be aware of all this. It may be that he’s papering over the gaps in his argument, or it may be that he’s simply not up to speed with the issues.

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  1. George
    August 20th, 2003 at 08:25 | #1

    Your comment is right, but to direct it at Saunders is not right. Your comment is more appropriately directed at ACTU leaders Greg Combet and Sharron Burrow, who have tried to claim that the results of their survey show that people want to pay higher taxes, period.

    People may indeed want higher expenditure on Meidcare, funded by an increase in the Medicare levy; but they also want lower income taxes and lower welfare spending. This does not mean that they want to pay higher taxes and higher expenditure overall, as Combet and Burrow have both claimed in media interviews this week.

    This is exactly the point that Saunders was trying to make.

  2. August 20th, 2003 at 14:10 | #2

    There is also the constraint Peter Saunders labours under, as indeed do most commentators apart from thos who exactly fit one or another party line. He can only communicate something that has been trimmed to fit, as with the best will in the world any other related points he tries to make will just get edited out.

    I know this from a meeting we had some months ago, when I sounded him out about getting Kim Swales’ material presented for examination in an article. Eventually the answer came down the line that it didn’t fit their CIS market. And, of course, as an approach that aims to remove the need for things like public provision of services, it fits the “social democratic” agenda even less (I use the inverted commas to acknowledge the fact that there is no single party line there; but it is still not so broad as to allow the Swales approach).

    Does anyone know where I might have a chance of getting articles like that printed, that don’t line up with either the pro or the anti orthodoxy, so I can at least get a proper enquiry started? I arranged to get a Liberal Party resolution passed on the subject about a year ago, but they too have sat on it ever since.

  3. Dave Ricardo
    August 20th, 2003 at 23:26 | #3

    “It may be that he’s papering over the gaps in his argument, or it may be that he’s simply not up to speed with the issues.”

    Maybe he’s just plain old disingenuous.

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