Good question

Stephen King asks a good question.

What sort of society has a taxation system that penalises those who value health and education highly? Australia!

He explains how that works.

Every person who buys PHI or who sends their child to a private school saves the government money. By using PHI they reduce the government’s cost of funding the public health system. By sending their child to a private school (which can be the local catholic school just as much as an ‘elite’ grammar) they reduce the government’s cost of funding the public school system. These people still pay their taxes – to fund the public school system and the public health system – and traditionally they have received a ‘partial refund’ through government grants to private schools and through the PHI rebate. But make no mistake. These people, who have the temerity to value education and healthcare highly, pay twice. They pay for the public system through their taxes and they pay again for the private services that reduce their need for the public system.

In comments On your Marx writes

Stephen’s example is merely an apology for keeping existing parts of middle class welfare in existance. Do not worry if you have the resources to pay for health insurance or private education yourself. We will get the State to help you out.

While mainstream that is confused logic. Private health insurance and private education subsidies are not middle class welfare. Public education and public health are middle class welfare. These items should be means tested and taxes cut accordingly.

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101 Responses to Good question

  1. Token

    In the AFR Alan Mitchell notes this about the savings from the “rolling back of middle class welfare”:

    The government’s proposed means test on the rebate is estimated to save the budget $2.4 billion over three years.

    The final incidence of the measure remains to be seen, but there is a risk that a good part of the saving will come out of the hide of the healthcare system.

    The Australian Medical Association wants the saving redirected into the healthcare system, but the smart money has it being used to help the government to meet its promise of a budget surplus by 2012-13.

    Without an acceleration of hospital productivity growth, the saving on the rebate might end up adding indirectly to public hospital queues.

  2. john malpas

    It is still unequal.
    The child of the waitress gets less of a chance than the child of the doctor.
    Assuming , of course, what the public assume :- that state education is of poorer quality than private education.

  3. .

    While mainstream that is confused logic. Private health insurance and private education subsidies are not middle class welfare. Public education and public health are middle class welfare. These items should be means tested and taxes cut accordingly.

    Good call.

  4. Rabz

    If the child of the doctor attends a public school, the doctor is (as far as I’m concerned) getting a free ride on the education system.

    The school education hierarchy in this country is as follows:

    Elite private schools
    Elite public schools (selectives)
    Public schools in higher socio economic areas
    Lower prestige private schools
    Public schools in low socio economic areas
    Public schooling in isolated areas

  5. ar

    The child of the waitress gets less of a chance than the child of the doctor.

    Bullshit. They get the same chance.

  6. Driftforge

    Bullshit. They get the same chance.

    They don’t. But that difference is primarily due to the home, not the school.

  7. So, if access to public health and public education were means-tested, should the subsidies for private health insurance and private education be abolished?

    In any case, the means-testing of access to public health and public education creates exactly the same problem as the means-testing of the private health insurance rebate/subsidy: it’s a deterrent to working harder and increasing one’s income. Taxation based on capacity to pay (without reference to how that capacity is obtained) creates the same problem. The three vices are one. But by some alchemy that escapes my comprehension, the first vice is regarded as right-wing and the other two as left-wing.

  8. The most sensible approach is probably to offer half or whatever percentage funding versus the cost of the state government providing the services. Forget about any class warfare ideas and just be pragmatic. These should be both entirely state responsibilities not federal and we only need to look at the US system to see what happens when the feds get involved. Having states run there own systems is better because they will compete with other states or hopefully get voted out. If it is federal there is nothing to compare to and so the system can fail more and more and nobody will fix it. Having the states do it also will have the effect of good systems being copied and bad ones discarded this does not happen with a failing single system often bad systems are made worse by just adding to them and not fixing them. We might be as the saying goes 20 years behind the US as Howard government getting involved in schools and Rudd/Gillard getting more involved and for health same thing with the feds getting more involved and even talking about building hospitals. So we are trying to copy a proven broken system. Great!!!!

    With both types of services the requirements are actually highly predictable just like the need for roads. So the arguement that private enterprise should just take over does not make sense otherwise why not sell all the roads in the country and put up toll gates. Having a few privately run toll roads, hospitals, and schools is ok.

  9. doug z

    Is it our responsibility to ensure that everyone has the same chance? So, if the millionaire spends a million dollars on his child, we the taxpayers must spend a million dollars on the waitresses child?
    No, we give all children the chance of an education and make sure they get health care when they need it. Equality has nothing to do with it.

  10. On your Marx

    what convoluted logic you use.
    People who more than have the capacity to pay for a resource must get government support to help them pay for something they can clearly pay for themselves.

    That is middle class welfare.

    It is amazing to see ‘fiscal hawks’ go to water when their precious government money is threatened.

    Stephen also believes medicare is a substitute for PHI when it clearly is not.

  11. TerjeP

    Public provision of hospitals and schools, as opposed to public funding, is well past it’s used by date. Although personally I think the political priority is to privatise (or maybe mutualise) all hospitals. The case for doing the same with schools is also strong but politically more thorny.

  12. jtfsoon

    what a predictably stupid contribution from the Woolies cleanup boy.

    1) Everyone except those on low incomes pays taxes
    2) some designated portion of those taxes can be said to go to health and education services
    3) people who choose to send their kids to private schools for instance are basically leaving on the table the taxes they have paid for their schooling
    4) reimbursing them for some portion of their private schooling costs is therefore not a subsidy, it is giving them the share they have left on the table by not taking up a place in the public school.

    The above would be perfectly clear if we stopped funding the producers of public education and just gave everyone vouchers and then allowed public schools to recover their costs through fees

  13. TerjeP

    Whilst you may be correct about privatisation with hospitals I am sceptical and even if you are correct it should still be a state issue. This would as I suggested above lead to best outcome and if it failed no-one would copy it.

  14. Amen to vouchers. Universal access to education may require public funding, but certainly doesn’t require public provision. The provision of educational services is a contestable business and is therefore best left to the market.

  15. .

    People who more than have the capacity to pay for a resource must get government support to help them pay for something they can clearly pay for themselves.

    That is middle class welfare.

    A tax cut is not “Government support”

    Every taxpayer is a creditor of the Government.

    You have perverted the linen white principle of the Government as our servant Homer, and turned it into a Frank N Furter type of master.

  16. michaelc58

    ‘On Your Marx’,
    No.
    You forget that “People who more than have the capacity to pay” are getting a tiny refund of the larger tax they paid – not government support or middle class welfare. Reason – because their opting out of the public system saves the taxpayer money.

    People on the left forget progressive taxing (ignoring rebates etc):
    Hairdresser: income $30K, Tax $4K
    ‘Wealthy’: income $150K, Tax $46K
    Millionaire: income $1Mil, Tax $420K

    Of course, you may feel some deserve the wealth and some don’t or you may feel no one deserves to be so wealthy. That’s a question of political ideology, not fairness of our existing free market system.

    As communists used to say: Comrade, this may work in practice (saving money), but it will never work in theory.”

  17. John of Mel

    On your Marx People who more than have the capacity to pay for a resource must get government support to help them pay for something they can clearly pay for themselves

    This is true in may be 10% of cases. Most middle class households can only afford it with the rebates. With 2 kids in cheap private school, 150K of income and a recently acquired mortgage (400K-450K) there is no way you can afford to pay PHI without the rebate.

  18. .

    John – but let’s also break down their total income and consumption, and the tax rates they pay.

    They are being taxed out of prosperity.

    The final tax rate they pay as a proportion of their income would be well over 50%.

    “Marx” thinks this is unfair and the Government should keep more. If only they lost the attitude and gave up private schooling and medical care for public schools and medicare and 12 month waiting lists!

  19. MIchael

    when will negative gearing be means tested ? now there’s a great lot more money transited to those that one may suggest are not needy. Probably a bit close to the bone for the pollies though. Only a slight change would balance the impact of the PHI rebate tinkering.

  20. sabena

    Does anyone know the per person amount needed to insure everyone for visits to public hospitals,assuming the same level of service as provided by private hospitals?

  21. 2dogs

    Rather than cut the rebate, how about addressing the extent to which the public hospital system is overburdened by those who have private cover, but choose not to use it? Surely, their insurers could be asked to pay the cost in these circumstances.

  22. JC

    what convoluted logic you use.
    People who more than have the capacity to pay for a resource must get government support to help them pay for something they can clearly pay for themselves.

    You complete and other disgrace to the economics profession, Homer. You abject failure.

    Paying less tax to the government is not the government supporting you, you fucking moron.

    That is middle class welfare.

    No it’s not because tax breaks are not welfare.

    It is amazing to see ‘fiscal hawks’ go to water when their precious government money is threatened.

    There at least 30,000 APS that could be fired en masse and no one would blink an eye. For instance the entire Climate Change Department could be shuttered and our lives would be impacted equal to the blink of an eye. Cull every department with climate change or ‘nvironment personnel and it would cull perhaps 10,000 taxeaters!

    We haven’t arrived at the government industry personnel supporting the original owners. That would be another 10,000 schleps.

    Stephen also believes medicare is a substitute for PHI when it clearly is not.

    No he doesn’t.

    anyways, you’re wanted in aisle 3. Someone can’t find the right toilet paper.

  23. .

    Rather than cut the rebate, how about addressing the extent to which the public hospital system is overburdened by those who have private cover, but choose not to use it? Surely, their insurers could be asked to pay the cost in these circumstances.

    They ask you, charge the firm and the Health Area Service sends you a nice thankyou card.

  24. JC

    Rather than cut the rebate, how about addressing the extent to which the public hospital system is overburdened by those who have private cover, but choose not to use it? Surely, their insurers could be asked to pay the cost in these circumstances.

    Like who in their right mind would go to a public hospital if they have private cover? You think they want to contract staph?

  25. papachango

    Is ‘wealthy’ now defined as earning $150k? sheesh – that’s a family of two reasonably senior teachers.

    FFS, can we get rid of the highly misleading, leftist-invented term ‘middle class welfare’?

    ‘welfare’, as in ‘the government giving you money’ is only applicable when you get more from the governmment than you shell out in taxes. I’d say all ‘middle class’ people would pay more tax then any of these rebates, so it’s just class war bullshit. Is a tax refund ‘middle class welfare’?

    Of course there’s a good argument to be had about the inefficiency of the govt taxing you a truckload then giving you a few crumbs back with huge administrative requirments. Tax people a whole lot less but eliminate these rebates.

  26. MACK1

    The Dutch are having a crack at managed competition in health. It will take a few years for their system to settle down, but clearly demographic trends mean a fully tax payer funded government health system is completely non-viable over the longer term in developed countries.

  27. .

    Like who in their right mind would go to a public hospital if they have private cover?

    Emergencies, and they get you to stay longer if they fuck up a transfer or forget to do it.

  28. sean

    Just further proof that soviet education/health policy requires constant government inteference to restore fairness as they realise instead of robbing Peter to pay Paul, in this case, they have to rob Paul to pay Paul!

  29. JC

    Tax people a whole lot less but eliminate these rebates.

    ‘sactly.

    Homer however, who is currently busy sorting out toilet products on aisle three, thinks its middle class welfare as he’s wanting more government services.

  30. 2dogs

    Dot, only happens if they request treatment as a private patient in a public hospital. You can be treated as a public patient in a public hospital even if you have private cover. This may be chosen to avoid paying an excess, for example.

    JC, this happens a lot. The difference in quality between public and private hospitals is small compared to the variation between medical professionals. If the area health service happens to have good people for a particular procedure, you may be better off going public for that procedure, even if you choose private in other cases.

  31. papachango

    Like who in their right mind would go to a public hospital if they have private cover?

    As dot said – emergencies, and some things they’re more set up to deal with. If your kid gets sick the Royal Childrens is the best bet. Before they moved the accommodation was god-awful, and they managed to lose our kids chest xray. But the actual medical treatment was fine.

    They ask you, charge the firm and the Health Area Service sends you a nice thankyou card.

    Um no, not even a card. They were pretty insistent we put it on PHI, but got diddly squat in terms of any extra treatment. Even a parents meal would have been nice – had to go get pizza from lygon street and scoff it in the middle of the children’s ward.

    I was tempted to say no to making a PHI claim just to piss them off.

  32. papachango

    though JC – what would all those ATO/Centrelink/Fahcsia/DHS employees do for a living?
    Do you think they’d all get good jobs in the private sector?

    Have you no heart, man?

  33. papachango

    2dogs – Royal Childrens paid the excess out of Medicare funding or whatever. They figured they were better off doing that than the public copping the full treatment cost.

    You’re right about medical treatment – most good Doctors work in a mix of public/private, as you get wider experience to different medical problems in public.

  34. “Do you think they’d all get good jobs in the private sector?”

    Yes, because if the economy can pay people to push paper and electrons around, it can pay them more to produce something.

    Making work destroys jobs. The contrary proposition is known as the broken-window fallacy.

  35. .

    If only more socialists understood the broken window fallacy, and they’d be less worried about cutting back the state.

  36. JC

    though JC – what would all those ATO/Centrelink/Fahcsia/DHS employees do for a living?

    good point. Lets think of it as a stimulus then. A permanent stimulus.

  37. papachango

    Yes, because if the economy can pay people to push paper and electrons around, it can pay them more to produce something.

    question is – are they capable of producing anything? ;-)

    I’ve had some great broken window fallacy arguments with people. Not just socialists, even fairly sensible pro free marketers get this one wrong e.g. when they talk about the post-WWII boom. To which I respond that if it’s such a good thing for the economy why don’t we bomb our own cities every twenty years or so just to stimulate contruction, or torch a few thousand cars to help out the struggling auto manufacturers.

  38. papachango

    jokes about a government sheltered workshop aside, the free market can provide jobs for even those with lower ability. In European villages of old the simpleton was employed to ring the church bells – all he had to do was pull the ropes on time.

    For that he got basic lodging and food. probably prefreable to being locked up in an institution but these days it would be ‘labour exploitation’

  39. sean

    In European villages of old the simpleton

    they run fantasy sports web sites these days

  40. badm0f0

    A tax cut is not “Government support”

    Every taxpayer is a creditor of the Government.

    The PHI rebate is not a “tax cut” as recipients are not required to pay any tax. It is an explicit subsidy that, like the first home owners grant, goes straight to the seller & is incorporated in the price.

  41. Why does every thread degenerate into the same tired old arguements. Lefties claiming everything is a subsidy for middle class and rich. 2 different approaches which always come up private is perfect and cheaper which is a load of crap if the system is not set up properly and same for the public hospitals than can be run well or badly. The fact of the matter is we have a bloody good healthcare system second cheapest in the world for a high wages country and everyone does not seem to recognise the real threat (in my opinion) and that is federal takover. This is the mob that on both sides of politics is so corrupt it is not funny to do with grants to special interests, electorates etc. and every election is just a competition about handouts. So worry about the broken systems in Aus not the things that are working although currently in the process of being broken.

  42. .

    The PHI rebate is not a “tax cut” as recipients are not required to pay any tax.

    Yes they are. Hence why you need a minimum income threshold.

  43. Sinclair Davidson

    The PHI rebate is not a “tax cut” as recipients are not required to pay any tax.

    But you are required to pay tax. It works off the medicare levy.

  44. badm0f0

    But you are required to pay tax. It works off the medicare levy.

    If you’re saying you need to pay tax to receive it then no, you don’t. You only have to be eligible to receive Medicare.

    Both the ATO & Health Department FAQs specifically state that you do not have to have a tax liability to receive the rebate, nor do you have to claim it via the tax system. It can also be claimed direct from the insurer (as a lower premium) or via cash/cheque from Medicare (or a combination of all 3 methods).

  45. JC

    Bado:

    You came up with the same shit a few days ago. You then went away licking your wounds and trying the same schtick again.

    Lets be clear, you don’t get the fucking rebate if you haven’t paid tax. That’s what a rebate is.

    The other shit you talk about:

    It can also be claimed direct from the insurer (as a lower premium) or via cash/cheque from Medicare (or a combination of all 3 methods

    I said before this is simple describing the different methods of getting it back.

    Will you please stop posting inaccurate crapology.

  46. badm0f0

    Yes they are. Hence why you need a minimum income threshold.

    No you don’t, you are conflating the Medicare Levy Surcharge with the PHI rebate. The MLS is levied above certain income thresholds for those who don’t have private health insurance. The PHI rebate is not income dependent. You can check the details here & here. The relevant info on the Health website is:

    I don’t pay tax (eg. I am a pensioner or a student). Am I still eligible for the Rebate?
    Yes. If you don’t pay tax you can still receive the Rebate in two ways. You can ask your health insurer to reduce your premium up front. Or you can receive a direct payment from the Government through your Medicare Australia office.

    The MLS exemption for those above the income thresholds who have private health cover will remain in place.

  47. badm0f0

    You came up with the same shit a few days ago. You then went away licking your wounds and trying the same schtick again.

    No, I went away and left you licking alone windows again. You should seriously consider knowing something about anything you post comments about, you wouldn’t embarrass yourself so often.

  48. Sinclair Davidson

    What badfofo is saying is that non taxpayers continue to not pay tax – but taxpayers will now pay more.

  49. JC

    I don’t pay tax (eg. I am a pensioner or a student). Am I still eligible for the Rebate?
    Yes. If you don’t pay tax you can still receive the Rebate in two ways.

    So you’re describing an element of the rebate that immediately becomes a subsidy for certain categories of people.

    And you think your claim is legit, right?

    If you don’t fall in those categories, you will not get the rebate if you haven’t paid taxes, you idiot.

    And the other points you describe is the flexibility in getting the rebate and nothing else.

    I had some hope for you, but your relapses makes me despair.

  50. jtfsoon

    badmofo – look up definition of ‘tax rebate’. it’s equivalent to a tax refund.

    The fact that people who are not net taxpayers also get it and will continue getting it only reinforces the fact that the net change is a tax increase for high income earners

  51. Pingback: Independent review for Fair Work Australia’s HSU/Craig Thomson investigation (but why it isn’t Gillard’s biggest headache) « bingbing

  52. badm0f0

    This isn’t a semantic game, the “private health insurance rebate” is a rebate on health insurance premiums, not a tax rebate. It can be claimed as a tax offset but even as such doesn’t actually require any tax to be paid. The fact that you are relying on petty semantic claims (& in JC’s case willful stupidity) doesn’t inspire much confidence in any other argument you may make for retaining the rebate.

  53. jtfsoon: Newstart Allowance is likewise paid to “people who are not net taxpayers”. So, is Newstart a tax rebate? And is the means-testing of Newstart a tax?

  54. jtfsoon

    Gavin
    I said that the bit of the rebate policy which benefited people who are not net taxpayers was stupid.

    The bit of the rebate policy which was actually affected *is* a proper tax rebate. But on top of that they have tacked on a subsidy to people who are not net taxpayers. Somehow it seems that to you and mofo, this part of the policy means that the change doesn’t amount to a tax increase when in fact the opposite is true

  55. Entropy

    There is nothing semantic about it. If you pay more tax than the value of the rebate, it is treated in your tax turn as a tax offset. Clearly not a subsidy.

    I guess Bad’s partially right in that if you don’t pay any tax (eg because your income was bugger all) but still take out PHI you would still receive the ‘rebate’ which would therefore be a subsidy in its effect.

    The fact for the vast majority of people that can afford PHI it works as a true rebate seems lost on him though.

  56. jtfsoon

    Yep, entropy has said what I said in a different way.

    For all but a small percentage of recipients, the rebate for health insurance functions as a proper tax rebate.

    More importantly the change that was announced affect the legitimate ‘tax rebate’ part of the policy. Ergo it is a tax increase.

  57. JC

    Somehow it seems that to you and mofo, this part of the policy means that the change doesn’t amount to a tax increase when in fact the opposite is true

    ‘sactly.

    However Bado knows better, because I nicely explained it to him yesterday and therefore he’s willfully pushing this dishonesty again today, or failing that he’s again relapsed into an idiocy stupor needing my help to get out of….. again.

  58. badm0f0

    I said that the bit of the rebate policy which benefited people who are not net taxpayers was stupid.

    “Their government cheque is welfare, mine is reward”. Little wonder governments find it so difficult to break the entitlement mentality once it takes hold.

    The fact for the vast majority of people that can afford PHI it works as a true rebate seems lost on him though.

    You can call it whatever you want if it makes you feel better about accepting welfare payments, whether that be “true rebate”, “price subsidy” or “health dole”.

  59. jtfsoon addressed me:

    Somehow it seems that to you and mofo, this part of the policy means that the change doesn’t amount to a tax increase when in fact the opposite is true.

    In terms of incentives, it doesn’t actually matter whether it’s a tax increase or a means-test. That was the point of my first comment. Yet we’re debating the point as if it matters.

  60. JC

    Bado

    Most, if not all of us agree that it would be better to settle for a lower rate of tax and do away with every single form of rebate and subsidy. It would be far more efficient and simpler.

    We don’t have that and no one is thinking about it.

    What you’re suggesting is that I should see my tax effectively rate rise without the corresponding tax cut and that the government ought to pocket the money and subsequently fund it’s own constituency.

    Fuck that. I’ll have my rebate thanks and no amount of you trying to push this pile of shit uphill with your relapsed ideas will change things… or the reality of what these lowlife scumbags are trying to pull.

  61. badm0f0

    I’ll have my rebate thanks …

    Like I said, you’re free to enjoy your health dole & I wouldn’t dare criticise you for continuing to bloat the welfare state through inefficient subsidies.

  62. John Comnenus

    Most proponents of public goods (health and education) conflate asset ownership with access to services – a point many of us have repeatedly made. we all support access to services and most think – in fact know – that the government almost always delivers a lower quality service than the private sector and delivers that lesser service at a higher cost. The elephant in the room is massive government waste in the public health care system.

    There is no down side for Federal Government from this decision. If the Coalition are right and more demand goes onto the public system the cost will be born by the states. If the coalition is wrong they have just saved some money.

    How is it fair that I pay for my healthcare three times over – through the tax system, insurance premiums and through out of pocket gap payments? Why are my taxes, which prevent me from providing as much for my family as I would like, provided only to other people’s families? Why am I not entitled to derive some benefit from my taxes myself? Especially given that I am demanding less of the system in the first place and I pay a lot more tax than many of those benefiting from my tax.

  63. sean

    It’s climate change, suddenly the loopy left, who would normally back national socialism and therefore subsidy for industry (e.g. MRET), are seeing everything as a subsidy and have gone completely feral.

    Government advertising ‘propping up the right-wing press’

  64. badm0f0

    are seeing everything as a subsidy

    Especially the actual subsidies, like the health dole.

  65. John Comnenus

    The simple solution is to cut the tax rate to encourage more insurance, a larger more efficient private sector and introduce a means test on the ability to access public service for ‘free’. We should be reversing this policy, reward those who pay for themselves and punish those of means who use ‘free’ services that were always predominantly intended for the less fortunate. Such a policy applied to health and education would dramatically decrease the amount of state involvement (and hence waste) in health and education and not restrict access to health or education at all.

  66. .

    Jesus. The poor are merely slugged before this bill gets passed. That’s all. The rich are not save for the MLS.

    You’d think a Government that looks for Pigouvian solutions wherever they can no matter the cost would like the idea of rewarding those who take out private cover. Instead we find they are insincere just as they are insincere Keynesians. Next up: Gillard forces the poor to pay MLS.

  67. Samuel J

    There is an easy approach. Get rid of public schools. Let everyone have access to a private education. Provide subsidies – which would mean effectively free private school education for those of little means. Do the same for public hospitals.

  68. pedro

    Sinclair you doofus, sure it’s middle class welfare, along with that earning retention allowance the govt kindly allows you to receive in your pay packet. :-)

    Yes, there’s a difference between sending you money or goods and services, and defining your taxable income.

  69. badm0f0

    There is an easy approach. Get rid of public schools. Let everyone have access to a private education. Provide subsidies – which would mean effectively free private school education for those of little means.

    Or you could make private school fees & private health insurance fully tax deductible but remove all government funding from private schools & restrict privately insured patients to using private hospitals & doctors with no Medicare rebates.

  70. Sinclair Davidson

    pedro – you’re right. I’m so ungrateful. I should be thankful that the government let’s me keep any on its money that I earn. :)

  71. Samuel
    You are assuming governments are much smarter than the private sector and they are not, the private sector will milk the government for all they have. Although your simple idea is pragmatic governments should not give up control and should run at least some of the schools themselves as they do have a competitive advantage with capital costs and assets. I’ll stick with my own pragmatic idea which is already proven but should a state want to do your idea good for them and hope it isn’t QLD.

  72. Mark

    “they do have a competitive advantage with capital costs and assets”

    The $x00,000 pagodas or COLAs or whatever come to mind. My kids’ private school, where new developments have to be justified to the parents, wouldn’t have embarked on something like that if it was paying for it itself.

  73. wreckage

    what convoluted logic you use.
    People who more than have the capacity to pay for a resource must get government support to help them pay for something they can clearly pay for themselves.

    That is middle class welfare.

    It is amazing to see ‘fiscal hawks’ go to water when their precious government money is threatened.

    In other words, you don’t care if more people freeload, so long as none of them only partly freeload.

  74. wreckage

    & restrict privately insured patients to using private hospitals & doctors with no Medicare rebates.

    No, not quite, because people who pay through PHI while in a public hospital provide more funds than the Medicare payment would to that public hospital.

  75. Rococo Liberal

    I pay 16.6 times more in tax than someone who earns 6 times less than me, and that utter twunt Plibershite dares tell me that the 50K earner is subsidising my health insurance rebate?

    Jonathan Holmes has apparently used the same argument as Pilbershite. Well, I have subsidised his stupid effing, left-wing media-watch for a long time, too, and he has the gall to say that I, and other top-marginal rate taxppayers like me, who pay his wages and for this complete shambles of a government are being subsidised by 50K earners? The mind boggles at the sheer bloody-minded ignorance of such wankers.

    Now I wouldn’t mind giving up my rebate, if the Government were honest and said that they needed to raise more revenue to prop up the budget. Even then I would complain because the government has wasted so much money on idiotic things like gold set-top boxes for pensioners. But this class warfare nonsense, this idea that a tiny tax discount (for that is what the rebate really is) amounts to middle-class welfare is insufferable.

    If this government is so concerned about equity why don’t they drop the levy on high income earners who dont take out PHI? Without the rebate the levy is grossly unfair in that it now forces people to subsidise the poor by either unclogging the Medicare system or paying more for the right to use it.

    And I suspect that those whose rebate will be reduced but not abolished will still cop a 30% increase in premiums, because they won’t know their income until the end of the financial year and so won’t be able to tell the insurers until then. Imagine that, you buy something and the government in one fell swoop puts up the price by 30%. You might get some of that back but have to wait 12 months until you put in your tax return. Talk about caveat emptor!

    Sinistra delenda est!

  76. Rococo Liberal

    I go to a meal with 4 others. We all eat food of the same value. As I am rich, I pay 70% of the $500 the meal costs. three of the other pay 10% of the bil eac, because they are pretty poor and one pays nothing, as he’s on the dole. However, the restarauter, knowing that I am a good customer decides to give me a discount of a few percentage off the $350 I pay, because he wants to encourage me to continue eating at his establishment.

    Now explain to me, lefties, how the other four are subsidising my discount. They each got $100 worth of food and not one paid as much as his meal was worth.

    Only the left’s rraison d’etre, the politics of envy, can explain why they act the way they do and spout the rubbish that they do.

    Sinistra delenda est

  77. Rococo Liberal

    I should have added, for the benefit of our less bright leftist friends, that my example above is based on a famous analogy of the workings of the tax system with a tweak of my own.

  78. Mark
    Not sure exactly what you mean to say. If you are referring to the feds hand outs with the school halls thing then it should have never happened. What is COLAs? My basic idea is what already existed before 2000 as it worked and was cheap.

  79. Rococo
    the tweak is that you are loaded?

  80. Jumpnmcar

    Rococo Liberal
    15 Feb 12 at 9:35 pm

    Well put. Should be on front pages.

  81. wreckage

    Actually I think if education is going to be government run, it’s excellent to have the feds funding one alternative and the States another. It’s half as bad as a single, government supplier.

  82. Jumpnmcar

    Sept
    “”I go to a meal with 4 others. We all eat food of the same value. As I am rich, I pay 70% of the $500 the meal costs. three two of the other pay 10% 15% of the bill each, because they are pretty poor and one pays nothing, as he’s on the dole. However, the restarauter, knowing that I am a good customer decides to give me a discount of a few percentage off the $350 I pay, because he wants to encourage me to continue eating at his establishment.

  83. wreckage
    No have federal and state will always fail. Guess what they will both try to pass costs onto each other and blame each other. There are 8 states and Territories and that is enough competition and real competition as a neighbouring state can say how good or bad and the bosses could keep their job or get the sack on that assuming people think when they vote.

  84. wreckage

    No have federal and state will always fail. Guess what they will both try to pass costs onto each other and blame each other.

    They do that anyway, how does that guarantee, or even increase the odds of, failure? No, with both directly in the marketplace and funding different strands their opportunities for blame-shifting are reduced. Failure comes when they share responsibility in a murky combined system, as per health.

    There are 8 states and Territories and that is enough competition and real competition as a neighbouring state can say how good or bad and the bosses could keep their job or get the sack on that assuming people think when they vote.

    Nonsense. I can’t move interstate to change school systems, and by the time a new government is voted in my kindergartener is in year three, and past all the opportunities for solid basic literacy.

  85. wreckage
    the funding you are suggesting is for the same thing and if you went to school more than 10 years ago the feds were not involved this is a very recent developement by the Howard government. Possibly they copied the stupidity of the US. Your second comment suggests you expect a perfect system which will never exist and you are not capable of choosing a school for your children and that 3 years of their life will decide success or failure only based on the government in power at the time. This is highly unlikely, it will take maybe 20 years for a system to really destruct or I would suggest 10 years under a central government system that can blame the states.

  86. wreckage

    the funding you are suggesting is for the same thing

    You are missing my point. Coles and Woolworths do the same thing. But, since they have different supply chains and storefronts, they have difficulty blaming each other and could, even as the only two competitors in the hypothetical marketplace, compete.

    However, imagine that there were Coles and Woolworths, and they had one storefront called “Groceries” and each could blame the other for anything because nobody knew for sure which one had caused any given rotten apple or ridiculous price? that’s the current state of health.

    Possibly they copied the stupidity of the US.

    There is no resemblance.

  87. Sleetmute

    I think the PHI rebate is clearly a subsidy, but a justifiable one to extent it leads to the public health system avoiding costs. Assuming costs are not avoided, then by all means remove the rebate, but do not tax me extra for not buying PHI – because I won’t if I don’t have to. The current political and media debate about this issue is completely disingenuous. Many young, healthy higher-income earners like me would be happy to not accept the subsidy so long as we weren’t threatened with the Medicare surcharge. After all, if PHI does not avoid public health system costs, why penalise people for not buying it?

  88. wreckage

    Your second comment suggests you expect a perfect system which will never exist and you are not capable of choosing a school for your children

    that is essentially the case in the US.

    and that 3 years of their life will decide success or failure only based on the government in power at the time

    My mother works in remedial education. Literacy and numeracy “success” is pretty much locked in in the first 3 years. That’s a fact.

    Listen very carefully: I have used the split in the Sate-public Fed-private education system twice to save my child from incompetent bureaucrats who happened to be “teachers”. Evil middle class welfare enabled me, as a dead-broke wage-earner, to move my kid from a class that was causing her extreme distress to one that she loved.

    Stop parading your ignorance.

  89. wreckage

    I think the PHI rebate is clearly a subsidy, but a justifiable one to extent it leads to the public health system avoiding costs.

    And if, in the final analysis, $50 in subsidies to PHI saves $100 in subsidies to Public Health Monopoly Inc., you’d have to be mentally deficient to insist that the $50 subsidy is the problem here.

  90. wreckage it does not mean I am ignorant just that I have a different opinion. To put it another way if I am the state government it is actually to my advantage to let my education system fail then more people will move to the private system which is partly funded by the feds saving me money. If the state government was giving the subsidy from there own money wouldn’t that be better and they will do this because it saves them money? I am glad things are working out with your child and I don’t know what that is like and I don’t have a child. I actually haven’t commented about middle class welfare and have actually said that is not a concern at all for me just high outcomes for low cost.

    The current state of health based on 2009 numbers is 6% of GDP public health spending versus 8% for US. For total health spending is 8.5% GDP for Aus versus 16.2% for US. If you want to pay more money in tax and more money for insurance good luck to you. The current state of health for hospitals as far as I know is still state but the federal government wants to change that and already is starting to I believe.

  91. wreckage

    liddle, you have a differing opinion, yes, but in some areas I have to consider you ignorant based on my own observations of reality and on established facts.

    Listed: ignorance of the differences between our and the US’s system, ignorance of the similarities between your proposal and the current US system, ignorance of the importance of literacy and the relatively small window before disadvantage becomes entrenched, and ignorance of real and current advantages to the system you oppose; opposition based entirely on ignorance of the nature and current real outcomes of that system.

    I’m not ranting, you’re wrong on those points. The rest we can argue over.

    To put it another way if I am the state government it is actually to my advantage to let my education system fail then more people will move to the private system which is partly funded by the feds saving me money.

    In the short term a split system gives some degree of choice- a good thing. In the medium term a State government that lets its education system fail will get voted out – also a good thing. Failures in the State system will be highlighted, and excuses amounting to “it’s too hard, nobody could succeed better than our miserable failure” rendered null, if there is a successful alternative.

    Simply put, a State with a full monopoly on education can still let it fail to save money. Their incentives are the same. Why does the existence of rivals in the market-place make them more likely to choose failure?

  92. kelly liddle

    wreckage
    The point about US is high involvement from the feds most expensive education system in the world highest cost system in the world. Australia somewhere near the top in performance one of the lowest spenders based on GDP. Same for health. Australian tax rates increasing from 20% GDP at my birth 1973 to approximately 30% GDP now which indicates continuous expansion of government. Everytime the federal government becomes involved in an area they shouldn’t be the costs go up. Would you prefer a 5% tax cut and the state automatically gives you a subsidy based on half the cost of providing the education themselves? My proposal is to change nothing and to stop or reverse changes that are effectively removing state responsibility. On other threads you say you are against corporate welfare, what about burueracrat welfare? By this I mean all the extra employees you are so happy to employ at the federal level when could be spent on teachers. Don’t know exactly what it cost but the BER was a complete waste, so whilst your arguements may make sense the reality as observed is that at best you will have a very minor improvement at very high cost.

  93. meant to say one of lowest education outcomes for OECD country for US.

  94. Simon

    If your paying for fully comprehensive PHI why do you need to pay the medicare levy? It shouldn’t be based on your income but based on usage and cover. It’s the only fair and traceable way. If the federal government wants to give out healthcare as welfare it’s only right that they surrender that income from other areas.

  95. .

    That’s what I said the other day. PHI should be deductible against the MLS.

  96. Peter Patton

    Like who in their right mind would go to a public hospital if they have private cover? You think they want to contract staph?

    Folks who have only taken out the minimum PHI, which turns out to be insufficient when some major medical issue strikes them.

  97. Peter Patton

    Also, there are tonnes of medical conditions, for which the best medical care is a large teaching/research hospital, which are overwhelmingly public hospitals.

  98. badm0f0

    If your paying for fully comprehensive PHI why do you need to pay the medicare levy?

    Because Medicare covers 75% of the scheduled benefits for in-patient costs even for those with comprehensive health insurance.

  99. Sleetmute

    Then don’t make us buy PHI. I don’t want it, but I am effectively forced to have it by the surcharge. If PHI doesn’t avoid much cost for the public health system, then by all means don’t subsidise PHI, but remove the surcharge and I will take my chances with Medicare.

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