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The Forum > Article Comments > It's time for smaller government > Comments

It's time for smaller government : Comments

By Simon Cowan, published 18/3/2013

Since 1972, spending across all three levels of government has increased at an average rate of 4% a year. Today the government rakes in more than a third of everything this country produces.

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Yes sure, it's time for smaller Govt!
State admins and their duplication, costs us around 70 billions per.
Most if not all they do could be handled/shared by the Fed and local Govt, without any increase in staff or budgets?
State admins are, I believe, little more than middlemen taking and handing on Govt money, for a fee!
And it would be fair to say, they, with their endless combative political mechanisations,are little more than ultra costly, time wasting road blocks, in the path of genuine progress?
Infrastructure roll-outs, delayed for around a decade, by just this nonsense, generally cost double, when finally built!
Plus, around 30% is wasted as admin fees, by this entirely unnecessary, double handling/double dipping?
Many of the functions of Govt, water, electricity reticulation, health and education, can be and once were handled, by unpaid voluntary regional boards.
Council members used to receive a refund on expenses, not a salary.
More local autonomy, and a direct pro rate funding model, automatically adjusted upwards, for rural and regional remoteness, would allow a considerable downsize in public service numbers!
Apples for apples comparisons and benchmarking, would remove most of the opportunities for corrupt individuals, to line their own pockets, or those of cronies?
And how good would it be, to lever the hands of state officials, off of the rezoning process, that currently creates, up to a 43% premium, on new housing!
With one exception, we are the most over governed people on the planet.
Real tax reform and massive simplification, would remove the need for often onerous compliance costs.
Moreover, the total take take, if collected as an unavoidable expenditure tax, would take less from the averaged bottom line than current compliance costs! And indeed, raise an additional 100 billion plus PA into the bargain.
We should be building nation building infrastructure, not creating career pathways for thousands of complex rationalists, whose only answer seems to be, add another layer of convoluted and opaque complexity, and another layer of bureaucrats to manage it; and or, abrogate core responsibility's and privatise?
Rhrosty.
Posted by Rhrosty, Monday, 18 March 2013 9:26:11 AM
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The author's describing himself simply as a research fellow at the Centre for Independent Studies (CIS) doesn't tell us much if we don't know what the CIS is, so we are already cued to interpret "research fellow" as "loyal paid foot soldier".

I notice that a post on the Forum topic "Are Conservatives uncaring?" described the CIS as a "right wing think tank funded largely by the tax deductible contributions of businesses whose leaders fear having to contend with a clear thinking well educated population." The same post continued, "Carey's book gives CIS a couple of good serves and claims it was initially set up and assisted by American business interests."

If the CIS really is an unbiased, independent research organisation owing allegiance to no political interest, as Simon Cowan's self description seems to imply, perhaps one of its leaders might provide us with a convincing reassurance.
Posted by GlenC, Monday, 18 March 2013 10:49:35 AM
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i would refer the author.to the speech the the late bob Menzies gave to the press club on his retirement in 66.

where he makes the point big problems need big GOVERNMENT.

we know how unprepared as a nation for WW2. the nation was .

as citizens require more from gov. now .therefor there is a need for the numbers,and services

ben
Posted by ben gershon, Monday, 18 March 2013 10:52:21 AM
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The author writes; "the size of government has grown to now reach 35% of GDP".

To arrive at such a figure the author has probably added state funded genuine essential services such as public school education, federal and state subsidies to education, and state provided, road, rail, health, police and justice services etc to the total Federal government expenses.

If such essential services were provided by private enterprise I wonder how poor the quality of the services would become. Very inferior to world best I would suggest.

I can provide an excellent example. I have recently examined the cost of power generation in NSW. Over the last 15 years, while the generators were mainly government owned, the average annual rate of increase in actual power station generating cost has been 1.6%pa.

Why have the charges to consumers increased inordinately. I suggest those increases have been mainly due to privatization of the marketing aspect. That aspect could be handled by a simple accounting style charging system. Where there is only one service to a household or building the concept of competition is a privatization rip-off.

In any situation where genuine competition is impossible, or is likely to be dangerous such as in monitoring food or health services quality, Common Good is best served by well supervised government intervention and/or service provision.
Posted by Foyle, Monday, 18 March 2013 11:36:55 AM
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Already with current levels of govt revenue there is simply not enough money for roads, other transport infrastructure, health, education etc. That's why the conservative govt in Victoria has been attacking the construction union,teachers and the TAFE sector. There simply isn't enough money and they are desperately trying to cut costs - even when that is neither sensible nor fair. Instead there needs to be open recognition that small government like this does not and cannot work.

The 'small government alternative' here would necessarily involve user pays infrastructure and services. That would mean an education system in which working class and rural students simply didn't enjoy the same opportunity. It could mean paying user charges whenever you used a freeway. It could mean ditching collective consumption as with the Pharmaceutial Benefits Scheme - with the consequence of medicines becoming more expensive..

The bottom line is that social insurance and collective consumption via govt services is in most citizens' interests. In the 1950s European Christian Democratic (ie: conservative) parties largely accepted the need for a 'social market'. My own ambitions are more radical - but it shows how much things have changed!

Especially since the 1970s profits have fallen - and to put it bluntly capitalists want ordinary people to foot the bill. The wage share of the economy has fallen; natural public monopolies have been privatised with the consequent fleecing of the public; industrial liberties are gone - at the same time as we are bombarded with economic liberal Ideology. (ie: there are double standards)

Many crucial sectors are effectively 'subsidised' with low or relatively low wages and conditions for aged care workers, child care workers, teachers. Corporate taxes have been slashed - but taxes on citizens have increased - regressive taxes like the GST..Through lower wages and corporate welfare we are all paying the price.

The Aged Care challenge alone means taxes must rise if we're to avoid the most regressive charges; and/or the most inhumane treatment of our aged. The author of this article chooses to ignore the social consequenes of 'small govt no matter what'.
Posted by Tristan Ewins, Monday, 18 March 2013 3:02:16 PM
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Smaller Govt doesn't necessarily imply service reduction. Services are supplied by the coal face workforce, not the plethora of bureaucrats, or their demands for paper work, done in costly time consuming triplicate?
We had the school hall roll-out, some of which, thanks to the admin fees added by state govts, costing 30% more, than the direct funding model, that simply bypassed states.
When Premier Bettie took power in Queensland, their big Govt administration model closed down 1000 beds, so it could add an additional layer of fat cat bureaucrats, whose only role seems to have been to collect and collate information, and or, add another layer of entirely unnecessary complexity to service provision, culminating in the health service wages debacle.
Just another case of fixing what was not broken?
Self interest, on the part of some very clever senior public servants, and the patent obfuscation they use to cloud or confound debate, or, if you will, the facts, is not an argument for simply maintaining the status quo.
One of the things management teaches, is there is always a better way to do things.
It seems to me, that a better way includes streamlining and some serious downsizing of departments, and or department heads, who are all too often, I believe, are propped up by their more competent assistants?
If we saw Australia, as simply a very large corporation, with a limited operational budget, we would start to prune off those parts of it, which routinely under perform, provide no real service or value; but rather, all too often add immensely to the workload, of those actually supplying the real services?
And, as an economy, we would do far better, if we could simply identify and eliminate, those parts of it, that are populated, by unproductive, profit demanding paper shuffling parasites?
Rhrosty.
Posted by Rhrosty, Monday, 18 March 2013 3:52:27 PM
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This article assumes the familiar myth that private enterprise is always more efficient in running an enterprise than is government. All we have to do (so the argument runs) is take government out of the equation and we all become rich and prosperous on the corresponding savings because the savings made by private enterprise administration in some magical way exceeds the distributed profits. This outcome is not substantiated by my personal experience nor by any published figures as far as I know. Indeed it is a well worn mantra much favored by very small business, and right wing apologists. I also take the point put forward by Foyle that the figures mean little or nothing unless the inclusions are known. Private enterprise is always happy to pick up a profitable government enterprise - eg the power industry - but seems less likely to concern itself with, say, the land titles office. Government has the responsibility to operate across the board and unlike private enterprise cannot pick and choose enterprises on the basis of profit alone.
I smell a hidden right-wing agenda here.
Posted by GYM-FISH, Monday, 18 March 2013 6:04:34 PM
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ben gershon - Quote "he makes the point big problems need big GOVERNMENT." The trouble from that quote by Menzies is we have THREE Governments
Federal - State - Local that equals over governed.
The ratio of public servants to tax payers is probably a ridiculous 1 public servant to every 100 people (not accurate but probably not far out)
Posted by Philip S, Monday, 18 March 2013 6:53:28 PM
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You want to trim that 35% down to 30%? Try trimming back on these taxpayers funded subsidies for starters …

• Annual subsidies to private schools - $9 billion
• Annual private superannuation subsidy - $30 billion (37% of which goes to the top 5% of earners)
• Annual subsidies to car manufacturers - $6 billion
• Annual subsidies for commercial property construction investment - $2 billion
• Free emissions permits to coal-fired electricity generators - $4 billion
• Car dealer finance insurance guarantee - $2 billion
• Subsidies to private health insurers - $6 billion
• Subsidies to Dept of Defence for overseas military operations - $1.5 billion

That’s about $60 billion. Even if those subsidies were only cut back by half, the total saving would be approximately 7% of the gross annual budget.
Posted by Killarney, Monday, 18 March 2013 8:56:08 PM
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Simon - you say "Research suggests that 30% of GDP is the maximum efficient size of government". If you hope to be taken seriously when make a statement like this, you really need to cite some actual credible research.

You also give the US as an example we should not want to emulate. I agree with that, but not for the reason you suggest. A large part of America's crisis has resulted not from big government, but from failing to balance the need for government against private sector interests and free market ideology. As a result, we've seen them: fail to properly regulate the private sector (esp. banking); create arguably the world's least efficient health care system, which consumes far more GDP than Australia's for the same health outcomes (talk about vested interests); stuck with a fractured and failing school system; and unable to maintain basic infrastructure, let alone invest in new infrastructure.

So yeah, let's not do that. And yeah, let's keep an eye on government, which can indeed be inefficient (as can the private sector, actually). But let's not set arbitrary targets. Let's instead assess each area or function on its merits and think about who is best placed to fund it, and who is best placed to deliver.
Posted by Rach, Monday, 18 March 2013 11:38:45 PM
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WE need to change the public service with every change of Govt!
We need to understand, that a Govt is only as good as the advice it receives and or adopts.
Someone somewhere, needs to be held accountable for that very advice and or the outcomes it produces!
We need to end the career pathway, that starts straight from university or as a union official, into the ranks of the public service.
We need a class of public servant, experienced and super competent, able to hold the hand of trainee pollies, at least until they can manage alone; and or, free of the training wheels?
We really do need to seriously examine our model of Govt.
Or the adversarial Westminster system, that came to us from feudal England.
Given the diversity of opinion in every party room, do we really need an opposition, or the endless road blocks and the billions in cost, they add to Govt!?
Who is after all, still held completely accountable for outcomes, every three or four years!
We could do much more, if we weren't spending so many billions, simply providing luxury lifestyles for what is little more than obstructionist, debating societies/ham theatre?
The contest of ideas, and the logic that makes some more presentable or more palatable than others, ought to occur during the election contest, not after it, or for 3-4 years after the event.
A free press and genuine public service accountability, might well complete negate the need for an obstructionist opposition.
In any event, a house of review, ensures every bill is thoroughly scrutinised, before it is enacted or becomes law.
Imagine all our corporations, with two boards, one opposing most of the decisions of the other or management. It would be eternal pandemonium and a debacle and endless bankruptcies.
We would never ever accept that model as effective pragmatic management!
Yet we continue to impose it on something far more important, the management of our country and our economy!
Smaller Govt? Why not?
Rhrosty.
Posted by Rhrosty, Tuesday, 19 March 2013 11:25:57 AM
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Government WILL get smaller. No need to do anything. Just sit & watch.
Energy prices will continue to rise and eat up more GDP as it goes.

Each year there will be less govt funds = (GDP - Energy cost)
and the available private funds will also be less.

All we need to beware of is government borrowing.
If government tries to keep to its promises by borrowing more money
we will end up like Greece or indeed Cyprus.

It really is that simple.
Posted by Bazz, Tuesday, 19 March 2013 12:32:17 PM
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