Comments on: Should small government liberals abandon the Liberals?

By: Geoff Robinson

Geoff Robinson — Thu, 03 Apr 2008 00:17:08 +0000

Ross Douthat the American soft neo-conservative has argued that now that the Republicans rely so heavily on lower-income conservative votes their economic policy will have to accomodate their needs: http://www.weeklystandard.com/Content/Public/Articles/000/000/006/312korit.asp
Maybe Howard led the way here?
Infrastructure: state Labor govts are doing their best to prove public choice theory correct by borrowing from the future by not investing in physical and human capital
If academic critics of university management are so confident that they could do a better job why don’t they leave universities and apply their unrecognised managerial talent elsewhere and make buckets of $$: if you’re so smart why aren’t you so rich as Deirdre McClosley argues?

By: derrida derider

derrida derider — Fri, 28 Mar 2008 03:42:47 +0000

Winton, I dunno about “a widespread view … that the [previous] government had become unprincipled in its spending of public funds” so much as a widespread view that it was unprincipled full stop. “Mean and tricky” is the phrase that comes to mind.

By: derrida derider

derrida derider — Fri, 28 Mar 2008 03:39:24 +0000

OT, Andrew, on superannuation you should know that Treasury projections are for it to save remarkably little in aged pensions - of the order of 10-15% of age pension expenditure in 2040. Saving age pension outlays is a very weak justification for super tax concessions - they are already costing more than a universal (non-means tested) age pension would and the relativity will only worsen over time.

Oh, and BTW congrats on scoring a well-deserved invite to the great 2020 talkfest.

By: Winton Bates

Winton Bates — Thu, 27 Mar 2008 23:46:39 +0000

I suppose there is a possibility that once the Libs get over their election defeat they might rediscover the merits of small governmnent.
I would like to think they were punished by the electorate for appearing too desperate to stay in power at any cost (to taxpayers). A prime example of what I have in mind is the ad hoc decision of the Commonweath to fund the Mersey hospital in Tasmania not long before the election.
It would be interesting to know whether there was a widespread view among voters prior to the election that the government had become unprincipled in its spending of public funds.

By: Andrew Norton

Andrew Norton — Thu, 27 Mar 2008 10:29:16 +0000

Russell - I am happy to have the exemptions cleaned up as well, though legitimate business expenses should be deductible. The problem with negative gearing of rental properties is not the deductibility as such, it is deducting the losses at high progressive rates of income tax while claiming the profits at lower rates of capital gains tax. Provided superannuation avoids people taking the aged pension later on it makes fiscal sense, but clearly some people are using it well beyond that. The effect of these distortions is to make marginal tax rates much higher than average tax paid in order to finance government expenditure. But cutting expenditure is also worthwhile.

By: conrad

conrad — Thu, 27 Mar 2008 10:05:45 +0000

Russell,

a different way to think about this is what proportion of people really couldn’t afford to pay for a decent education for their children in Australia (or at least part of) ? Obviously there are unemployed people, and single parents on minimum wages and so on, but these are only a small percentage of the population. If the rest would pay, I’m sure there would be enough money to buy the really poor schools an AC unit. But that isn’t what happens now. You can compare my school if you like for the opposite anecdote. I live in a neighborhood where I’m sure house prices are now over 600K on average. But everyone wants their kids to go to the basically free public school. Is that fair?

By: Russell

Russell — Thu, 27 Mar 2008 03:31:31 +0000

Conrad - yes it is in part the individual’s responsibility and most people expect to meet that responsibility via the tax system. And to pay enough to provide a certain standard. Example - a few weeks ago the temperature in the classrooms at my local primary state school was 44 C. The Education Department said it was up to P&Cs to provide things like air-conditioning. The schools in the rich areas can raise the money, the ones in poor areas can’t. Is that fair, that some kids swelter in classrooms while others can comfortably concentrate on their work?

Andrew - this state-federal blaming thing is silly, the set-up (one raises the money, the other provides the services) is broken.
How come you only identify expenditure to be cut and not tax ‘exemptions’ that should be abolished? Some examples from my limited social circle - a brother who is always buying almond or olive or some other sort of trees, not for any purpose but to avoid tax; a colleague who is fairly well off with property and shares who salary sacrifices half her income into super, to avoid tax; a friend who has investment properties, and benefits from negative gearing. Trusts might be worth investigating.

By: Andrew Norton

Andrew Norton — Thu, 27 Mar 2008 02:39:45 +0000

Russell - Infrastructure is largely a state responsibility, so any failings there are mainly of the centre-left social democrats that run all the states rather than the conservative social democrats who used to rule in Canberra, though I take Sinclair’s point that federal regulatory factors may have obstructed private investment in some cases.

It’s pretty easy to point to areas where significant savings could be made federally, with family benefits (the second largest line item in the budget) top of my list. Overly generous handouts to seniors (the largest budget line item) could also be hauled back. The HELP loans scheme and tuition subsidies could also generate savings, plus all the pork and waste that Labor has identified.

By: conrad

conrad — Thu, 27 Mar 2008 02:39:01 +0000

Russell, surely in terms of hospitals and schools, it’s at least in part the individuals responsibility. I don’t see why the government should be coughing up all the money to fix, for example “shabby buildings”, especially when most people are living in what most of the world (including rich countries) consider mansions and driving around in expensive cars.
On this note, I don’t see why I should have any sympathy for rich people (most of Australia) complaining about a shabby school system. If they want a decent school system, then they should cough up the bucks, which a fair proportion now do. If enough of those that could afford it (and thats _before_ buying other luxuries, like huge houses) were willing to cough up the bucks, the amount left might actually be used usefully on those that really don’t have the money versus the freeriders.

By: Russell

Russell — Thu, 27 Mar 2008 01:39:28 +0000

Sinclair - your evidence doesn’t look like much to be proud of - I particularly noted the lackluster performance in bridges, water and sewerage because Perth has a bridge (’The Narrows’) across the Swan River but then you have to go right down to the port at Fremantle before you’ll find another bridge. Ridiculous. As for sewerage - my parents moved to City Beach (the closest beach to the Perth CBD) in the 50s and recently had to have the septic tanks cleaned out, again.
.
But by infrastructure I was actually thinking of hospitals, schools etc. We have some pretty shabby old buildings which need replacing. I think it’s irrelevant whether this is state or federal government responsibility - it’s absurd to have the federal government producing ’surpluses’ to stuff into future funds when we need this infrastructure now.

I guess my question to Andrew is - why only look at the amount of spending and say Liberal spending is better because it’s less? If that spending is on the wrong things, and the necessary things are neglected, you might be better off voting for Labor.