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Let the dole bludgers have their cake
The big spending promises made by the Liberal-National Coalition and the Labor Party during the recent election campaign have shown once again that neither party is serious about reining in government spending.
Australia has a public debt of $400 billion. Cutting back on spending is essential if we want to avoid the need to increase taxes for future generations. However, the lack of political will has paralysed any serious effort to take charge of the situation.
Both major parties have wasted political capital going after recipients of the Newstart unemployment allowance or grandmothers on aged care payments. For example, the Turnbull government supported a bill to crack down on jobseekers who unreasonably refuse offers of employment. This is not exactly a winning strategy, since these welfare constituencies are firmly entrenched and – rightly or wrongly – have strong emotional appeal to voters.
Witness, for instance, the massive public support for Duncan Storrar, Ausstudy payment recipient, who (rightly) complained on ABC’s Q&A television show that politicians aren’t raising the tax-free threshold on the lower end of the earnings scale. Storrar received $60,000 in donations after a crowdfunding campaign was launched to help him with living expenses.
The “Aussie battler” has always had a special place in Australian culture. As a result, it makes little sense to argue for spending cuts that target dole recipients or the disabled. An austerity program premised on making the lower and middle-class give up benefits will face huge resistance.
Instead, slashing politicians’ salaries is likely to have broad populist appeal. So too is attacking the privileges enjoyed by lobbyists and special interest groups. A campaign against wealthy elites who siphon millions of taxpayer dollars under the radar is likely to be more successful.
Both parties have spent lavishly on politicians and bureaucrats’ salaries, and have handed out millions in subsidies to favoured lobby groups. In effect, the Coalition and Labor have worked the system to their advantage, at the expense of taxpayers. The Australian parliament has authorised generous perks for politicians, who are among the highest paid in the world. Federal legislators have even received subsidies to buy personal investment properties and attend weddings.
Here’s an idea for a campaign: pay politicians no more than the average Australian full-time wage – about $75,000 per year. The argument that politicians must be paid high salaries in order to attract the best and the brightest, or that their workload is so intense that they deserve to be paid more, is disingenuous. If the state of New Hampshire in America can get by with paying legislators $100 a year, why can’t we?
Another potential campaign idea: stop shelling out taxpayer dollars for useless things. Like when Victorian company Palm Products received $360,000 of taxpayer money to develop a coffee travel cup. Or when the old Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education spent $14,000 to buy a coffee table. Or what about when the Australian Institute of Sport spent $500,000 on a new logo?
And why not scrap grants to companies that contribute directly or indirectly to climate change? Aren’t we supposed to be in the midst of a global warming crisis?
All these examples show that cutting spending doesn’t have to be hard. It just requires identifying the areas on which Australians agree. Is there any doubt that voters would respond more favourably to reducing public servant salaries and eliminating corporate welfare than they would to tightening payment eligibility for perceived needy recipients like Storrar?
Anyone concerned with government spending and its potential to lead Australia down a fiscal cliff should realise that cracking down on welfare payments means setting aside taxpayer funds to chase a never-ending stream of fraud. Ensuring compliance with rules isn’t cheap. It also sets dangerous precedents for privacy invasion, for example, when private companies like eBay are asked to hand over customer data to Centrelink for cross-referencing. This is yet another reason why it makes more sense to go after the elites first.
In the short-term, it might actually be better to stop wasting time and money chasing after dole bludgers and let them have their cake. In the long-term, putting in place policies that create job growth will encourage dole bludgers to get off their bums and into the workforce without having to chase them with draconian bureaucracy that invades privacy.
To stimulate job growth, however, taxes must be lower, and minimum wages and occupational health and safety laws – which add unnecessary costs and hamper business – must be abolished. Since these free-market policies aren’t so easy to secure widespread agreement on, why not start small? By picking fights with elites and obvious rip-offs like a $14,000 coffee table, there is actually a chance of winning since politicians, bureaucrats and politically connected lobby groups are vastly outnumbered by ordinary voters.