Where to start with spending cuts

Australia’s policy dice is loaded in favour of more spending and regulation.  Major expansions in recent years have been on education, people with disabilities, the national broadband network (NBN) and renewable energy.

Even those rare politicians who are genuinely concerned about excessive spending are reluctant to oppose those lobbying for such measures and the votes they promise.  Nonetheless an injection of personal responsibility would be useful even if limited to the most egregious and misleading programs politicians have introduced – the NBN and solar rooves being cases in point – just as business leaders pay a personal price for deceit of shareholders.

I have a piece in the Herald Sun today (“How to cut $26 billion in government spending without even trying”) where I point to the progress towards a better budget balance having been overwhelmingly driven by revenue increases; the agreed savings in a $460 billion a year budget comprise a mere “rounding error” of 0.02 per cent.

Easy progress can be made to a budget balance, or equivalent savings, even without markedly touching the sacrosanct Health, Education and Welfare (HEW) spending responsible for two thirds of the total outlays.  Programs identified are

  • $1.4 billion by giving the ABC and SBS to their controlling worker-collectives, leaving them, like other media, to find willing payers for their services.
  • all but emergency foreign aid, which rarely brings benefits other than to consultants and corrupt politicians, saving $3 billion.
  • Largely eliminate the agriculture and industry departments and their associated programs, none of which actually produce anything, and save a further $4 billion.
  • Drastically reduce Commonwealth spending on schools, environment, housing (all of which simply duplicate state functions) and save $12 billion.
  • End all Commonwealth subsidies and spending on renewables and other energy to save $4.5 billion.
  • Subject the 100,000 non-front line public servants to the sort of disciplines competition imposes on the private sector and abolish some 20,000 unnecessary jobs, saving another $2 billion.

That’s $26 billion, equivalent to only five per cent of Commonwealth expenditure but, in effect, balancing the budget.

It is proving overwhelmingly difficulty to achieve a balance other than by growth-sapping increases in revenue collections, partly because green, left and populist politicians take the ridiculous view that taxing the rich or “big business” can be achieved without any detrimental outcomes in terms of future activity.  But savings, like those identified, need to be made and, indeed, built upon since President Trump in his tax cutting, deregulation and outlay paring measures is changing the entire agenda.

Can politicians adapt to such a shifting world – and just as importantly, can the electorate focus on the bigger picture rather than be marshalled by pressure groups to demand the regulation and redistribution measures that are undercutting prudency in government outlays?

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32 Responses to Where to start with spending cuts

  1. Rufus

    President Trump lives up to the traditional presidential moniker ‘Leader of the Free World’. Throughout the West governments will be induced to cut taxes and spending to compete. The resulting general prosperity with be both huge and beautiful.

  2. Rabz

    Where to start with spending cuts:

    The ALPBC
    The AHRC
    The ACCC
    The Bureau of mediocrity
    Immigration
    Foreign Affairs
    SBS
    Any taxpayer funded agglomeration of imbeciles that contains the words “social”, “climate”, “regulation”, “Court”, “justice”, “Department”, “parasite” (just to be sure, to be sure).

    Enough, you filth.

    We’re coming after you. You may try and run, but you will not be able to hide. 🙂

  3. David Brewer

    Trump is doing an heroic job. But will the governments of other countries really follow, when he has only 37 per cent approval? That approval has even gone DOWN over the last month as he has steered through a colossal tax cut, and I don’t see serious moves to cut taxes and regulations in any other major economy. Sure these countries will now suffer a loss of competitiveness compared to the States, but their politicians are too gutless or too stupid to do anything about it.

  4. Tel

    That’s $26 billion, equivalent to only five per cent of Commonwealth expenditure but, in effect, balancing the budget.

    I would support all of the suggested spending reductions but would that really balance the budget? Every year the government debt-to-GDP ratio has gone up by around 3.4% and this has been almost linear, so you need to reduce spending by at least 3.4% of GDP just in order to level out (that’s about 53 Billion AUD unfortunately).

    https://tradingeconomics.com/australia/government-debt-to-gdp

    The $26 billion would not be a great start!! But it’s only a start.

  5. Robber Baron

    You do not need policy advisors at PM&C.

  6. Habib

    Not a bad but very minimal start, and about as likely as me winning Miss World, powerball and the Caulfield cup on the same day.

  7. eb

    How much of that $12bil Commonwealth spending on schools is to keep the private schools going?

    Might not be easy to cut that to zero!

  8. Norman Church

    Where is the will to be found to reduce public expenditure and regulation?

  9. Bruce of Newcastle

    Remove tax deductibility from all charity, union and political party donations.

    The left loves to say not taxing something is a “subsidy”, so take them at their word. Remove the “subsidy” to all these grifters. Those who actually merit a donation can still receive donations after tax. Meanwhile those organisations which have sunk their fangs into the great artery of tax dollars via tax deductibility will be forced to discipline themselves.

    I’m off to give Jonova a merited untax-deductible donation.

  10. Chris M

    Trump… has only 37 per cent approval? That approval has even gone DOWN over the last month

    The US media reported this month his approval had risen slightly, and the following morning AU media reported it has fallen further.

    But anyways it’s all moot, no-one of Trumps calibre in government here and no way such a person could enter with the party structures we are currently saddled with.

  11. Boambee John

    Bruce of Newcastle
    #2592476, posted on December 23, 2017 at 8:29 pm
    Remove tax deductibility from all charity, union and political party donations.

    Indeed, cut the money flow off.

  12. Bruce of Newcastle

    37 per cent approval

    David – As always you have to look at the fake news details.
    Here is a graphic from a very recent Pew Poll on Trump’s relative approval rates.

    As you can see Trump’s approval with Republican voters is quite normal. The negative numbers are ALL coming from Democrat voters who think he is worse than Vlad the Impaler.

    Consequently the skewed Dem/GOP bias in most political polls immediately makes Trump’s numbers vastly worse because they are intentionally oversampling the Dem voters, who rate him lower than snail slime. It’s quite transparent and totally immoral.

  13. egg_

    Wot Rabz said.

    Start at the top – the Ministry of Disinformation at TheirABC.

  14. zyconoclast

    The Bureau of mediocrity

    +100

  15. Procrustes

    Robber Baron “you do not need policy advisers at PM&C”

    You are wrong. You need policy advisers like my time at PM&C. They need to be told “the PM’s priority is budget repair and your job is not to cuddle up to your mates in line agencies but it is to be more hostile towards spending than either Finance or Treasury and you will prosecute this at every meeting you attend.”

    And there are a couple of ideas here: http://www.ncoa.gov.au

  16. struth

    built upon since President Trump in his tax cutting, deregulation and outlay paring measures is changing the entire agenda.

    It won’t be changing agenda2030 and malcom has signed up to that in blood.

    It’s time to admit.
    We are closer to Venezuela than a member of the anglosphere club.
    Our Agenda will not be changed, comrade.

    Trump… has only 37 per cent approval? That approval has even gone DOWN over the last month

    Is this like, he hasn’t got a hope of winning the presidency, type of poll.
    If an election was held tomorrow he’d increase his majority.

  17. David Brewer

    Thanks Bruce and struth for finding reasons to hope. I do think that once an election is called, the focus must come more onto achievements, which will boost Trump’s numbers.

    He sure has an uphill battle with the press though. Check out the WaPo’s idea of “balanced” coverage of his tax cut here.

    Talk about straining at a gnat but swallowing a camel… The trouble is, many voters seem stupid enough to swallow this sort of tripe.

  18. The ABC is the keystone to the whole edifice, the Ministry of Propaganda which empowers the State to thrive and grow. Giving the ABC to its staff is a great idea, but take care as they will still expect their annual running costs to be met by the taxpayer.

  19. entropy

    A bit simplistic there, Alan. Who does quarantine? Who actually tells those tossers in DFAT what is needed in a trade agreement, and more importantly, what not to give up?
    Those departments you cavalierly dismiss so have a legitimate function. They could be smaller and stop trying to extend into state gov business, but there are reasons you might want some capacity.

  20. Rayvic

    What, no mention of defence spending cuts, Alan? The fanciful, outrageous new-submarine project should be totally reviewed, so as to lop two-thirds off the $50 billion grand total spend by buying design-proven nuclear submarines off the shelf.

  21. Those departments you cavalierly dismiss so have a legitimate function.

    That can and will be said about any Government dept or Qango . They make regulations in the name of their legitimate function but they have their smartest people employed to ensure ongoing funding and institutional status is not threatened. They are vested interests, all dedicated to their own survival.

  22. Robber Baron

    Procrustes, have you had a look at the advisors PM Maol has hired at PM&C? Surely you jest.

  23. entropy

    So who would write and importantly, police the protocols for say, importing a new variety of sunflower Jannie?
    The current mob do a poor enough job of it. Handing it completely over to someone with no skin in the game at all, or worse, some main chancers in DFAT would not be a good idea

  24. entropy

    Basically I am saying you should look at what functions are actually necessary, rather than departments, then shut down everything else.

  25. Boambee John

    Jannie
    #2592550, posted on December 23, 2017 at 10:37 pm
    The ABC is the keystone to the whole edifice, the Ministry of Propaganda which empowers the State to thrive and grow. Giving the ABC to its staff is a great idea, but take care as they will still expect their annual running costs to be met by the taxpayer.

    They could expect what they like, “given to its staff” means they have to get subscribers, since they hate advertisers. No subscribers, no future. Surely Friends of Their ABC would be happy to organise the funding? (sarc to the 100th power)

  26. manalive

    All the above and include the value of the ’principal place of residence’, above a reasonable base of say $500,000, in the age pension assets test.

  27. Merry Christmas Alan.
    Keep up the good fight.

    And what entropy said.

  28. Terry

    include the value of the ’principal place of residence’, above a reasonable base of say $500,000, in the age pension assets test.

    I’d prefer something much simpler.

    All welfare received to be tallied as an interest-free loan but indexed for inflation (a bit like a HECS debt), to be repaid once a future income level is reached (say +2% above a minimum of $40k p.a. per individual) or repaid from the estate, if any balance remains.

    Your credit/debit balance to be noted on your annual Notice of Assessment each year from the ATO.

    Sure, some welfare recipients will never pay anything back and will leave this earth in debit, but that is no different to now.

  29. Dr Fred Lenin

    You forgot the federal health department which doesn’t even have one clinic. The federal education department which only has a crèche for staff members kids. Federal department of transport which carts polliebludgers ‘ about . Lots of embassies to places we’ve never heard of , BOM and science department which tells lies about the u.n. Communust weather ,the u,n,communust inhuman rites gang indigenius welfare bludgers “migrants” coming here for welfare ,”refugees “from violence that bring their own violence with them . Probably missed a few ,but there’s a few billion there .

  30. bollux

    Put Public Servants on the same pay as their U.S. counterparts. Probably another $20 billion easy. Merry Christmas.

  31. Paridell

    A worker controlling collective at SBS? A clearer case of “and SBS-ism” I never saw. Sufferers from the condition are invariably compelled, whenever they utter the words “the ABC”, to add “and SBS”. This phenomenon reflects no considered view or indeed knowledge of SBS, being more more akin to an involuntary ejaculation than to a rational utterance. It may be cured by study and reflection, but sufferers also tend to suffer denial to an extreme degree, making the success rate low.

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