Tuesday, March 28, 2006

World: If you don't want taxes, you're an anarchist and you need to participate more

Ben Franklin’s actual words were “In this world, nothing can be said to be certain, except death and taxes.”

Who said: “That the Government has kept spending down has reduced the burden on workers”?

Well, although it’s only attributed to Treasurer Peter Costello [by the Herald’s subeditor], it’s exactly the sort of thing he’s said in the past.

Do you believe it? What’s he really talking about?

What he’s said is undoubtedly true for the well-off worker. The whole philosophy of reducing taxes is aimed at the well-off worker. The professional, the manager, the highest paid strata. But for those who rely on collective bargaining and decent governments for protection from the ravages of an employer whose legal obligation is specifically to its shareholders, all this “lower taxes” mantra so successfully marketed by the self-interest is simply lies.

Taxes provide government services. Do we want government services? I guess if you’re the sort of person that can afford private health care and private education, you may think you don’t need them, and can provide everything for yourself. But even if you are entirely self-interested, consider the case for early childhood intervention that I noted before. A government bent on reducing taxes to benefit the already well-off would find it totally beyond the pale to invest in long-term initiatives for which the payoff is, for example, decreased assault, murder, or property damage - or, at the other end of the scale, intrinsic to our entire survival, such as global environmental danger.

At the end of the piece, Peter Costello did say: “We are in a relentlessly competitive world and we should aim to have taxes and spending as low as possible consistent with the standard of health, education,defense and security that our public is justly entitled to receive”.

Another aspect of Costello’s message is that reducing taxes and working conditions encourages job growth. And it is quite true that studies have often shown that the best reduction in poverty comes with moving to employment. Yet that has been based on an Australian experience where we have traditionally had the protections not afforded by a country like the USA. More recent studies have shown an increase in the ‘working poor’ in Australia, consistent with the US experience. We will get to the point where employment in itself won’t be saviour from poverty. In fact, Costello is now crowing about this phenomenon:”A historical milestone was passed three years ago: government spending in Australia became lower than in the US”. (Of course, he wasn’t accounting for the onorous costs of hegemony!)
The new industrial relations laws (and recently-revealed regulations placed on top of them) will do nicely, indeed, to foster a working poor. The worst of both worlds.

This is actually rather different from the usual mantra, but in fact just what is meant by those who try to sell the whole of the public (not just their own sectional interests) on a very simple message.
Why did he add that caveat? Well, he is a politician, after all, and he’s angling not just for the next election, but for prime ministership. And he hasn’t, of course, defined what that standard is; his standard is guaranteed to differ from the government services needed in the west of Sydney, for example. I’ll leave aside health for the moment, as it is a complex issue where technology changes have greatly increased the demand for the dollar. But taking education as an example, all studies have consistently shown that under Costello’s watch, investment in education - the very core of a nation’s future - has dipped significantly. Hardly surprising for a government whose mantra is lower taxes.

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