The fiscal burden of Family Tax Benefits

In the executive summary of the second Intergenerational Report, released today, it says after noting various fiscal pressures that will build over the next 40 years:

It will be important to focus on the efficiency and effectiveness of government spending

I couldn’t agree more. Unfortunately, the government isn’t heeding its own advice, as the Integenerational Report itself shows. In an appendix on spending projections the Report compares spending forecasts made in the first report five years ago with those Treasury makes now. Back then, they thought that Family Tax Benefits A and B would consume 1.3% of GDP in 2006-07. In the second Report they say FTB spending will be 1.6% of GDP in 2006-07. In a trillion dollar economy – as various government Ministers for some reason keep telling us – that 0.3% is a lot of money. In real per person terms, it’s gone from $613 per person to $790 per person, or about a 29% increase.

Now what do we have for all this money? According to the Report:

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