LDP senator elect David Leyonhjelm sets out a proposed LDP budget in the AFR this morning.
There are three steps necessary to bring the Australian economy back to health: (1) tax reform and deregulation to boost economic growth; (2) cut government over-spending to immediately bring the budget back to surplus and start paying down the national debt; and (3) structural reforms that ensures government spending is sustainable in the long run.
All good – of course the devil is in the detail. The picture below sums it all up quite nicely (Terje emails a correction: the line labelled ‘government budget’ should read ‘MYEFO’).
I have two quibbles: first the use of the phrase ‘so the rich pay their share’ is very problematic and demonstrates entirely the wrong mind set. The LDP needs to lose that attitude.
My second quibble will generate a lot of controversy in the comments. Including the family home in an assets test is not a good idea.
This keeps coming up time and time again. Apparently there are millionaires living in their own homes who get the age pension. Okay. But let’s think this through. I suspect an actual audit (as opposed to anecdote) of these ‘millionaires’ will uncover a lot of little old ladies – probably widows – who have lived in their family home all their married lives and the suburb around them has gentrified driving up the value of their home. No doubt if these little old ladies were to leave their homes, the house itself could be knocked down and several townhouses erected.
For statists and social planners a policy of removing the elderly from their homes has a lot of benefits; more efficient land use, better allocation of public spending, and so on. Millionaires don’t get welfare. Social planners must find the elderly so annoying in so many ways. On the demand side they under-consume, and on the supply they don’t work and so are unproductive. Not to mention that they often occupy prime real estate in what are now good suburbs.
So as you can tell I’m a bit suspicious of policy recommendations that result in people being removed from their homes because a bureaucrat or politician imagines a better usage of their property.
On the other hand there may well be a policy problem. A reverse mortgage market could solve some problems here.
Overall, however, the LDP budget has much to recommend it.