Though there are signs that tax cuts are coming back into public favour, two polls published this morning suggest that this is more due to the politics of massive surpluses, which allow tax cuts and more spending, than to a shift back to preferring tax cuts over more public services.
The more interesting poll, for my purposes, was a Galaxy poll published in the News Ltd tabloids. It asked:
On balance, which one of the following would you prefer the Government to do with $34 billion?
And the answers were:
Give tax cuts 12%
Spend it on schools and hospitals 71%
Give more money to states 3%
Invest in some major infrastructure projects 13%
That tax response is less than a quarter of the lowest support for tax cuts otherwise recorded this year; this question implies an either-or choice that does not exist in reality. It is however consistent with my general theory of opinion on tax and spend, that in a period of prosperity people want to spend more on health and education, but for most people more government spending is the most practical way of doing so. Incremental tax cuts just don’t generate enough additional income to finance private health and education, the most reliable ways of getting better services.
The Galaxy poll reports 12% of people saying that the tax cuts make it more likely that they will vote for the Coalition, while the ACNielsen poll in the Fairfax broadsheets finds 8% saying that they will probably change their current voting intention. We should be sceptical – Galaxy picks up only a 3 percentage point improvement in the Coalition primary and ACNielsen 2 percentage points. But two polls finding much the same change and a persuasive reason why the numbers have improved gives some confidence that the shift is not just statistical noise, though that is a possibility.
One other interesting point in the Galaxy poll is the very low percentage of people favouring more money being given to the states. Almost all the bad public services the public complains about – hospitals, education, transport – are principally the responsibility of state governments. The public thinks that more money is the answer. Yet they don’t seem to want to give the money directly to state governments. ‘Aspirational nationalism’ may be a terrible term for a little-better idea, but Howard (and Rudd, for that matter) may well be right that the public has concluded that the state governments are hopeless, and they will have to rely on the federal government for better services.