44 thoughts on “Monday Message Board

  1. “It is obscene that such large amounts of money are being fleeced from the Australian people, just to be poured into a trough so the public sector can get their filthy snouts into it.”

    Except that the money is being “fleeced” from the massive profits generated by the commodity boom and is being invested not “poured into a trough”.

    Hint: The surplus is the money left after all that filthy evil disgusting perverted frittering away of money on silly nonsense like health, education and old age pensions.

  2. It would be delusional to think that the 33% of GDP (about $350 Billion) that the public sector sponges, is spent “on silly nonsense like health, education and old age pensions”. Only a fraction of the money sponged is.

    About $175 billion is spent on something bona-fide, the other $175 billion is poured straight into an unaccountable trough, to be syphoned up the snouts of the self regulating monopoly, called the public sector.

  3. I was waiting for someone else to call you on this, TG, but since no one has, I’d like you to give an account of the $175 billion of public spending to which you refer, excluding health, education, pensions and (I assume) defence.

  4. No, no, no, John.

    That’s not how it works.

    Libertarians don’t come out and say – let’s cut the aged pension by 50%; take half the police of the streets and close 100 hospitals.

    They make vague references to “efficiency gains” and “the dead hand of government” to pretend they can have the same (or better) quality of services without paying for them.

  5. No, IG, that’s not the Libertarian line at all (or the one used by others like certain flavours of anarchists you might be lumping in there, of whom I’m one) – though I can see how it might come over that way if you put in certain assumptions about how things should be done, ones they try to remove.

    First, the argument is that there is churning etc. going on, which makes for costs. It’s not suggested that half the police should be taken off the streets in order to cut the costs of churning, or half the pensions removed or whatever; it’s quite clear that 100% of the waste would remain if you tried something like that. So, for things like that, the argument is, find and remove the churning. There isn’t any separate budget entry for “waste”, it just grew like Topsy. As far as this goes, I agree with it. That is, I am sure there is a middleman sort of cost there, and if we could find and cut that, we would be better off – but starting at the service end to look for cuttable things isn’t likely to help.

    Second, the argument is made that a great many services should not be provided by governments at all, but that people should keep their own money and pay for their own services. The usual counter is that they can’t afford it, which is countered in turn by the (IMHO) accurate point that it was mostly government burdens that created that insufficiency in the first place. What that does leave out, though, is that merely stopping government burdens would leave a transitional problem. That is, even though the government really did create the dependency, it would still be there for a while even if the government got out of the way. They couldn’t have arranged it better if they’d planned it like a “poison pill” to stop a hostile takeover.

    For a serious attempt at getting the government out of age pensions while managing transitional problems, for instance, see this article of mine. Pretty clearly, I disapprove in philosophical principle of governments, and I see useful lines to explore for working them out of a raison d’etre, like Kevin Carson’s, so it’s at least practical to make a start – but I’m not fool enough to think that simple elimination of the harmful cause would clear up all the effects.

    But there is never any attempt by (genuine, as opposed to self-serving imitation) Libertarians “to pretend they can have the same (or better) quality of services without paying for them”. That’s building in a reading that supposes that you would end up back at a government provision of services again, the very antithesis of what they are aiming at.

  6. I am well aware that various libertarians have proposed various theories about economic management.

    I find most of these theories to be of little to no value.

    I have also found that the great majority of self-described libertarians have little to no interest in or understanding of those theories.

    But by all means explain how you’d implement the $165 billion per year in spending cuts Tony G is advocating.

  7. IG, I told you you were probably perceiving things through a filter that put back in what Libertarians et al were trying to take out, a sort of tunnel vision/blind spot. Now I’m pretty sure of it.

    You state “the $165 billion per year in spending cuts Tony G is advocating”. Now go and look at what he wrote, then back at your own wording. He is not advocating cuts, as such, at this point. He is asserting that a proportion is wasted, and shouldn’t be. Now, within a framework of government service provision, you can no more separate off all the waste and cut it while leaving the service than Shylock could have his pound of flesh and leave all the blood behind. At that level, though, Libertarians advocate that the government get out of the game, precisely because there is no way to get the cut and keep the service. Far from raising an insuperable objection, you are highlighting a key problem of governments!

    At a much smaller and more immediately practical, possibly transitional, level we have another question: what cuts can be made in the here and now, shrinking government as well as its costs (i.e., not aiming at the same services cheaper but at progressive winding back that prioritises cutting costs to the public so we can start fending for ourselves – no freeing up resources for the government to do something else). For that, there would be cuts – but what that approach recommends as its starting point is also, not cuts as such, but looking for areas suitable for cuts. That is, your question is wrongly directed at me; it should be directed to the organs of government.

  8. “I’d like you to give an account of the $175 billion of public spending to which you refer”;

    Well for starters, the $22 billion that isn’t needed by government at present. It should be returned until it is needed, which is never.

    That would leave $153 Billion;

    Less $30 Billion for abolishing middle class welfare found here;
    Table 9.2 page 22;

    To compensate for the abolition of middle class welfare, parents could claim the tax free threshold for each school aged child. This would also lower their taxable incomes into a lower marginal rate for each child claimed.

    That would leave $ 122 Billion.

    Less $45 Billion for abolishing the states
    INVESTMENT same link as above
    Table 17 page 34
    “General revenue assistance –
    States and Territories” $ 45 Billion” Suspend this payment.

    That would leave $77 Billion

    Less $50 Billion
    For the sake of this exercise we will estimate savings of $50 Billion of the States & Territories $ 140+ Billion expenses.

    The argument for ridding the country of multiple legislative bodies, filled with seat sniffing,* jailed or dead paedophilic* or habitual speeding* types, plus their associated cronies, including government departments (full of high paid executives and consultants who have not been allocated a job, yet are on full pay). The abolition of such States far outweighs any benefits of retaining our ‘so called’ federation. A unitary system with regions would be much more equitable and efficient.

    *Buswell,Orkopoulos,Della Bosca, Hickey, Gibson etc.

    That will leave $17 Billion

    Greenie Handouts;
    Fuel and energy $5 billion

    Farmer Handouts;
    Agriculture, forestry and fishing $3 Billion

    Industry handouts;
    Other economic affairs; $ 7 Billion
    Table 3 page 5

    That leaves $ 2 billion

    Cut 40,000 of the 247000 commonwealth public servants @ $50k = A $2 Billion saving
    Table 22 Page 41

    That leaves My side of the equation accounted for .

    It would be interesting to hear “you to give an account of the $175 billion of public spending to which you refer”, it seems to include only $145billion; health $44b, education $19b, pensions $64b* and (I assume) defence. $18b.

    I would like to claim that $30 billion as a potential saving as well.

    * Age, Vets, Disable, Unemployed and Sick

  9. “I’d like you to give an account of the $175 billion of public spending to which you referâ€?;

    Well for starters, the $22 billion that isn’t needed by government at present. It should be returned until it is needed, which is never.”

    You really genuinely don’t understand the difference between “expenditure” and “surplus” do you?

    Oh and what do you think that $45 billion to the states gets spent on?

  10. Impressive, TG, you’ve managed to double-count $45 Billion + $50 billion of cuts to the states, with not a single item of expenditure actually identified (other than the tired old standby of “too many politicians”). Ian is right about the surplus. As regards middle class welfare your link is totally bogus. The Budget Papers don’t as you suggest identify $30 billion in middle-class welfare and neither have you. That’s almost $150 billion of bogus claims.

    The bits and pieces that make up the rest have problems too. On other economic affairs, are you aware that you’re proposing the abolition of all vocational and industry training programs, the immigration department, and labour market assistance to the unemployed. Given that you describe all this as “industry handouts”, I suspect not. The same is true of many of the programs in agriculture, energy and so on. Are you planning on abolishing quarantine, for example?

    At this point, TG, an honest admission that you you really meant to say “I’m sure government expenditure could be cut significantly, though I don’t know how much” might be preferable to digging your hole deeper.

  11. I think Tony G was being slightly tongue in cheek,trying to highlight the enormous amounts of money spent on various programs.We(the voters)never seem to be asked if we are happy with the spending arrangements.Would we like higher pensions and lower private school funding?More infrastructure and less public servants? Direct tax or indirect tax.The perennial problems of health,education and public transport will never have enough money thrown at them because as Kevin Rudd succinctly put it”We have done as much as we physically can to provide additional help to the family budget” So no joy there.

  12. As i’m sure Terje will point out, the LDP offered pretty much the choice you seem to want, while the SWP has (at least in some recent elections) offered the opposite.

  13. It is back of an envelope stuff.

    Yes “I’m sure government expenditure could be cut significantly, though I don’t know how muchâ€? and neither do you nor THEY themselves, and that’s the scary bit.

    The States are a black hole issue on their own best left to later, regardless of the $50 Billion.

    You and Ian can call it what you like, in industry they call a surplus a profit. Governments aren’t suppose to make large profits and hoard them.

    Family Tax Benefit – A
    Family Tax Benefit – B
    Parenting Payment – Single
    Parenting Payment – Partnered
    Child Care Benefit
    Baby Bonus(a)
    Child Support (Registration and
    Collection) Act 1988
    Supported Accommodation Assistance
    Grants to Family Support Organisations
    Support for Child Care
    Child Care Tax Rebate

    It reads like middle class welfare to me.
    and it adds up to $30 Billion.

  14. “Could you explain to me who’s expenditure it is?”

    It’s not expenditure – it’s saving. The surplus is the money left over after taxing and expenditure which is used to either pay off government debt or invested to produce income in future.

    Saying you’re going to cut government expenditure by eliminating the surplus is like saying you’re going to reduce your grocery bill by reducing the amount you pay into superannuation.

  15. “It reads like middle class welfare to me.”

    So you think the bulk of sole parent benefits, emergency accommodation for the homeless and family tax benefits go to the middle class?

  16. Tony, I think it’s clear you’re new to this topic – it’s generally wise to leave “back of the envelope” estimates to experts. A basic error in this field, to which you’ve fallen prey, is to focus on the accounting distinction between tax expenditures (delivered through deductions and rebates) and transfer payments (which appear on the expenditure side of the accounts). Most middle-class welfare is delivered through tax expenditures, particularly the favorable treatment of superannuation.

    Looking at your welfare proposals, you suggest scrapping all the existing benefits and replacing them with a tax deduction, equal to the income-free threshold, for each child. To get the maximum benefit, the parent would need to be paying the top marginal tax rate, applicable to incomes over $180K. That’s middle class welfare with a vengeance, which is why, from the 1970s onwards, both Labor and Liberal governments have abandoned the use of dependent deductions and replaced them with the means-tested schemes we have now.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s