Greg Sheridan has an important piece in The Australian today setting out the case of how the Rudd-Gillard government have infected Australia with the European disease.
Europe’s present distress is our future. Everyone knows that part of Europe’s problem is excessive welfare. As Germany’s Chancellor Angela Merkel has remarked, Europe has 7 per cent of the world’s population, 25 per cent of global gross domestic product and 50 per cent of the world’s welfare payments.
He points to other policies where we’re adopting European ways too.
Our strain of Europitis, however, is particularly strong – as David Uren explains:
The poorest 20 per cent get 42 per cent of all government transfer payments, whereas the top 20 per cent get less than 4 per cent, a ratio of 12 to one.
We take this for granted: why should transfer payments go to higher income earners who don’t need them, we ask. But across the advanced world, the poorest 20 per cent get on average only twice as much in transfer payments as the top 20 per cent. In the US they get only 50 per cent more.
In most other countries, tax contains an element of social insurance. If you lose your job, you get an unemployment benefit for a period at a level based on your income. Age pensions similarly are pegged to final salary. You get some benefit back from the tax that you pay. People on higher incomes pay more tax and get more benefit.
The Australian conception of the state as a giant redistribution machine is unknown elsewhere.
Okay – let’s look first at the upside – “We spend less than the OECD average on government benefits, but our spending has a greater impact on alleviating poverty than in other countries.”
The downside is that Australian policy-makers have an obsession with welfare and redistribution. David Uren is talking in the context of superannuation. Our friends in Canberra believe that the tax-concessions associated with Super are a form of welfare for the rich. Yes – keeping more of the money you have earned is a hand-out from the government. The argument being that government could tax that money and redistribute it to people who have not worked to earn your money.
Greg Sheridan’s Article in The Australia is probably the best summation of the Destruction of Australia by Rudd/Gillard/Swan Labor, Greens and Independents, that I have read
and finally, a journalist understands what our children, grandchildren will have to deal with and pay for in the future
Labor’s economic management has been poor. It inherited a $20bn surplus and has delivered consistent deficits. Gross government debt is $270bn and rising. The economy looks good only because of John Howard’s inheritance and because the minerals boom has made every resources-based economy temporarily look good. But Australia is making no preparation for lean years ahead.
OldOzzie
21 Mar 13 at 8:56 am
Powerful article by Sheridan.
Pity the man spent the first 3 years of this government using his articles to kiss the incompetent Krudd’s bottom.
Token
21 Mar 13 at 8:58 am
One of the best by Sheridan. The light finally dawns in even the darkest of places. But will an Abbott govt have the conjones to fix the mess, or be just a lighter shade of grey?
Sirocco
21 Mar 13 at 9:03 am
Talk about torturing the data!!!
Tom
21 Mar 13 at 9:07 am
The only option is “Going Galt”, which I’ve been busy doing.
You stinking statist mongrels – just get the fuck out of my life and get your stinking paws out of my wallet.
Rabz
21 Mar 13 at 9:42 am
Well said, Token. I recall even Gerard Henderson doing a bit of butt kissing, more than once, on Insiders when he said that Wayne Swan was “doing a pretty good job”. Seriously.
I remember Sheridan’s schmooching up to Rudd, but I guess he understood that if you wanted access to that very strange little man you had to know your place.
In any case, with taxes, I would:
1. Enshrine in the constitution that no government will exceed a fixed level of spending pegged against the GDP, except under a declaration of war. 15%, and that’s plenty. If some pissant little bureaucrat can’t make it work with what he’s got then slash the bullshit starting with the pen pushers they’ve got pumping out stupid ideas and regulations.
2. Abolish income tax first, followed by every other sleazy little money grab from individual citizens. The progressive income tax has been abused enough and politicians have demonstrated that they can’t be trusted to get it right. In the US, around 50% of the population pay around 3% of federal tax, while the top 10% pay about 68%. How is that fair, exactly?
3. Raise the GST to 20% on all purchases, including food.
4. Cap welfare payments to 12 months. You’ve got a year to sort out your crap and after that you’re on you’re own.
5. Outlaw union membership for public servants at all levels. They’re paid by the public to serve. Striking is not serving. If they don’t like it, they can get off their arse and get a job in the private sector.
6. Abolish compulsory super and peg retirement pension payments against the total GST payments you have made in your life. If you’ve contributed mightly to running the state through you’re efforts, you’re entitled to more than some bludger who hasn’t.
7. I better get back to work.
Ant
21 Mar 13 at 9:43 am
Here ya go oldozzie, read ém and weep.
Winston Smith
21 Mar 13 at 10:13 am
I want a T shirt with this on it.
Ï’m only spending my kids inheritance now, but just wait until they get the Credit Card bill.”
Winston Smith
21 Mar 13 at 10:19 am
To my mind Uren’s article and Whiteford’s paper are arguments against the Sheridan thesis and our system is a good thing. If there is going to be tax and spend then it is much better than the Euro version where both are higher. Arguments for and against redistribution are not necessarily arguments for and against the Australian model, which makes sense irrespective of the amount of redistribution you support.
Pure churning through govt makes no sense in any context. I recall Howard or maybe Costello arguing that you need a degree of churning back to the middle class to maintain broad support for the part of redistribution that actually makes sense. Also, some degree of churning has to be inevitable when you’re making extra allowances for families and you are not taxing family income instead of individual income.
The political obsession with redistribution exists irrespective of the design of our welfare system.
Pedro
21 Mar 13 at 11:18 am
Rabz care to enlighten us with methods of how this works in Australia?
Ant – that Bishop woman was publicly agreeing with the toothy Green leader the other day that we need a “ban on semi-automatic weapons”. Libs = Labor lite.
Chris M
21 Mar 13 at 12:27 pm
Effective 1996. It would be nice if they engaged their brains before they opened their mouths.
Empire Strikes Back
21 Mar 13 at 12:42 pm
Well I think the Green lady wants to remove all the registered handguns also. She can be forgiven on the basis of being clinically insane but not Bishop for agreeing with her.
Why do the Libs feel the need to ever agree to any of the Greens ideas? EVERYTHING they stand for is unhinged. They are the party for the deranged.
Chris M
21 Mar 13 at 1:16 pm
Wait, wasn’t that one argument for the 1901 Federation, that payment of welfare needed to be centralised, with age and invalid pensions specifically charged to the new govt in the constitution? After that it has simply been a process of improving bureaucratic efficiency, with the biggest expansions responding to returning soldiers from 2 Wars, including their ‘boom’ children, with the 20th century emergent independence of women.
Australia was proto-’socialist’ (a vague term) from British Settlement, with the govt awarding land, and doles of rum and rations to the poor.
one old bruce
23 Mar 13 at 7:08 am
one old bruce, pensions only became a federal responsibility after the 1946 referendum. They were never an argument for federation.
2dogs
23 Mar 13 at 8:34 am
Sorry 2 dogs, I’m not convinced.
“The Commonwealth of Australia was formed on I January 1901 by federation of the six States under a written constitution which, among other things, authorised the new Commonwealth Parliament to legislate in respect of age and invalid pensions. In the event, the Commonwealth did not exercise this power until June 1908 when legislation providing for the introduction of means-tested ‘flat-rate’ age and invalid pensions was passed. The new pensions, which were financed from general revenue, came into operation in July 1909 and December 1910 respectively, superseding State age pension schemes which had been introduced in New South Wales (1900), Victoria (1900) and Queensland (1908) and an invalid pension scheme introduced in New South Wales (1908).
The new pension was paid to men from age 65. It was paid to women at age 60, but not until December 1910. The age pension was also subject to a residence qualification of 25 years which was reduced to 20 years shortly after introduction. A residence qualification of five years applied to the invalid pension.
In 1912 the Commonwealth introduced a maternity allowance. This allowance was a lump sum cash grant payable to a mother on the birth of a child.”
http://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/8e72c4526a94aaedca2569de00296978!OpenDocument
Is the above wrong?
one old bruce
24 Mar 13 at 5:59 am