Friday 22nd of August 2014

so much for "the adults" .....

so much for "the adults" .....

Governments are not like businesses. They provide services because the citizens demand them, not because delivering them is profitable. They collect taxes from citizens, not charge prices from customers. While a business has a legal responsibility to maximise the dividends it pays its shareholders, it makes no sense for a government to generate a surplus from its own citizens.

Tony Shepherd’s National Commission of Audit is a deeply flawed document, but its deepest flaw is its authors’ belief that a government should systematically seek to collect more tax each year than it spends. That is, while the report talks about intergenerational equity, the most inequitable thing a government could do would be to collect surplus tax revenue from one generation in order to leave a subsequent generation lower levels of education and infrastructure and a slightly larger bank balance.

The Commission focusses on the need for the government to sustain public finances but barely discusses the role of government in sustaining the health of Australia’s citizens, its communities and its environment. There is no doubt that governments must make sustainable long-run decisions about tax and expenditure. There is also no doubt that the decisions it makes about how to improve the sustainability of our finances can have significant impacts on the sustainability of the broader systems on which our economy is built.

Auditing the auditors: The People's Commission of Audit


phoney tony ....

from politicoz …..

After making political honesty his highest value – his most "core" commitment – before the election, prime minister Tony Abbott is set to break a series of specific promises in next Tuesday's budget. The key question is: why?

Abbott was asked repeatedly before the election how he would keep all of his promises. He repeatedly confirmed (often to incredulous journalists) that his government would not only leave specific spending items (pensions, superannuation, education, health and the ABC) alone, but would also not raise taxes and, above all, not break any pre-election commitments.  He even confirmed that the condition of the budget would not be an excuse for breaking promises.

A release from the Organisation for Economic Cooperation and Development (OECD) overnight confirms what many economists have been saying: there is no "budget emergency". There's simply no imperative for Abbott to risk his political capital by cutting a swathe through the welfare system and breaking core promises.

And yet, break them he will – and surely risk being tagged with the "liar" moniker which dogged Julia Gillard for almost her entire term.