They always walk among those who cherish liberty as much as the air they breathe but, given their modus operandi of political concealment, it is less commonplace for members of a certain group to conspicuously reveal themselves in public view (an exception is Prime Minister Julia Gillard, whose affiliation with the shadowy group is printed, in black and white, in her parliamentary Declaration of Interests register).
As the title of this blog post explains, yes, I am referring to the Australian members of the Fabian Society, a group dedicated to implementing socialistic ideals by gradualist means. The logo of the Society, of a wolf dressed up in sheep’s clothing, is all you need to know about how these people seek to achieve their objectives – hoodwinking the largely unsuspecting public into the alleged reasonableness of their egregiously liberty-eroding positions is the order of the day for a Fabian.
When the Fabians do express their affiliation in public it typically comes attached with sweeping statements misguidedly extolling the virtues of larger government. Late last week a Mr Joff Lelliott, a Fabian affiliate, wrote a piece for the ABC Drum website suggesting that Australia is relatively low-taxing compared with high-taxing, high-spending European states and, so, Australia should follow their lead to bankruptcy. A paragraph or two from his piece is below:
If Australians want high-quality services and infrastructure, there needs to be a better understanding of the relationship between the amount of tax collected by governments and what they can provide.
With a GDP of over $1.5 trillion, if Australia taxed at the OECD average, there would be well over $100 billion extra for governments to play with. To put this in context, it is estimated that the National Disability Insurance Scheme (NDIS) and Gonski reforms to education would together cost about $14 billion.
Australia’s tax burden could be increased far less than this to cover the NDIS, Gonski and more, and still see Australia with one of the lowest tax-to-GDP ratios in the OECD.
Now, it is the humble duty of any classical liberal or libertarian (btw, I see them as pretty much one and the same), and indeed just any lover of freedom, to counter economic nonsense wherever it is found. Accordingly, I wrote a response which appears on the same website. The guts of my rebuttal goes as follows:
It seems for Lelliott the amount of Australian GDP absorbed in taxation by Commonwealth, state and local governments is insufficient, and he accordingly provides a rough calculation of the additional amount of taxation revenue to be raised if Australia taxed at the OECD average of 33.8 per cent of GDP.
The magic (or should that be magic pudding?) additional tax revenue figure Lelliott estimates is ‘well over $100 billion extra for governments to play with,’ which could be used to finance proposals such as the NDIS and Gonski and an undefined ‘more.’
Intriguingly, Lelliott suggests that Australia’s overall taxation burden could be increased by ‘far less’ than the OECD average to cover NDIS, Gonski and ‘more,’ but does not provide further detail, presumably preferring that the political class have themselves a bigger economic muck-up day with more taxpayers’ money to burn.
If readers suspect that something is amiss with Lelliott’s analysis, in particular that higher taxing European nation-states haven’t been necessarily travelling well in the economic growth stakes for a fair while, they are onto something.
That is because a larger size of government often reflected in empirical studies through the taxation-to-GDP ratio, or even the ratio of government spending to GDP which has to be financed through taxes anyhow, will harm economic performance even in relatively small-government countries.
An overwhelming number of cross-country studies over the past decade that accommodate econometric innovations and richer data sets, and which often include Australia in the empirical coverage, have found that a larger public sector is associated with slower economic growth rates.
Election years tend, more than most, to be periods in which economically and socially irrational or even malevolent proposals are put forward to the Australian public for their voting consideration. Classical liberals and libertarians certainly have their work cut out to respond to the avalanche of nonsense, but respond to Fabian and other fallacies we must.