Are voters tiring of tax and spend?

Three years ago I wrote a paper on a reversal in 30 years of public resistance to higher taxation, which I argued was largely the result of prosperity. When household budgets are less tight, I suggested, people want to buy more or better goods and services. But for services that are largely provided by government, such as health and education, it is hard to purchase better services without the large financial leap involved in going private. A small increase in taxes for the government to improve services is, for these people, the cheaper option. This was why the polls showed trade-off questions between reducing taxes and spending more on services trending in favour of services, and why surveys assuming there was a surplus found large majorities in favour of extra spending.

For example, in January 2004 a Newspoll asked

If the federal government has a large surplus, should this be spent all or mainly on health and education, on personal tax cuts, or both?

72% of respondents preferred the surplus to be spent all or mainly on health and education, 9% wanted tax cuts, and 16% wanted it spent on both equally.

In the last few months, there are signs that public opinion is shifting away from tax and spend. In April, an ACNielsen poll found that two-thirds wanted income tax cuts to be included in the May Budget. About a week later Newspoll came to a very similar result.

Neither, however, directly asked about a trade-off with services, though support for tax cuts dropped to 36% when respondents were told that tax cuts might push interest rates up.

Today’s Galaxy poll reported in the News Ltd tabloids again finds the two-thirds in favour of tax cuts previously recorded by ACNielsen and Newspoll. Continue reading “Are voters tiring of tax and spend?”