found 55 per cent of respondents would prefer the proposed tax cuts to be delivered as extra payments to their superannuation fund. This included a majority of Labor and Coalition supporters.
Only 38 per cent of people wanted the money upfront through lower taxes.
That’s a very similar result to a Newspoll last May, in which a supplementary tax & spend question warning respondents that tax cuts would be inflationary saw opinion on tax cuts shift from 66% in favour to 33%, with the proportion against going from 19% to 53%.
The public seems to have paid a suprising amount of attention to the macroeconomic debates over the role of fiscal policy in inflation and interest rate outcomes.
There is, however, an important difference between this week’s Galaxy poll and last year’s Newspoll. As Stephen notes, people could get the tax cuts and voluntarily put the money into super. He suggests that the logic might be as follows:
The only reason to favour having the choice made for you would be as a solution to an imagined collective action problem: I might save my tax cut, but if others don’t, the consequences could be inflationary, so a policy that is also binding on others is to be preferred.
There is a pattern in public opinion of the public believing rather different things of themselves compared to others. My favourite in his genre was an Australia Institute poll a few years ago which found a majority of people thought that they did not have enough money and that Australians in general were too materialistic. But in this case it is realistic to believe not just that others will spend rather than save, but that the respondents themselves might think they need shielding from their own temptations.
The poll question I’d like to see is whether people support cuts to government spending as an inflation remedy, and not just the soft-target, small-dollar cuts in the number of public servants. To seriously reduce government spending health, education, defence or social security need to be targeted.
And unlike tax cuts, some of which will certainly be saved, all goverment spending reductions on domestic purposes eases demand in the Australian economy. A question on cutting government spending would be the real test of how serious the public is about the links between fiscal policy, inflation and interest rates.