Those “most vulnerable” people again.

Why are these people ‘vulnerable’? In many, if not most, cases they have put themselves in that position: too much consumerism, too many children, too many loans, poor financial skills – the list could go on for ever.

Certainly, as the author suggests, big earners don’t need tax cuts. But, the facts of life are that there is a wide range of wealth in society; there always has been, and there always will be. Those of us on the lower end of the scale have to manage with what we have.

Ray Cleary is keen on the idea of cutting subsidies attached to the ‘luxury’ of private health cover. How about the “most vulnerable” cutting the luxuries of eating ready-prepared food because they are too lazy to cook; huge TV sets; a lawn full of cars all needing maintenance and registration and all of the other luxuries these people have just because people who can actually afford them have them.

Spending more on private students? Well, speak to the state governments. The Federal Government allocates money to both state and private schools. State governments give money to state schools only.

Baby bonuses? Nobody should be paid to have babies; particularly as the “most vulnerable” generally blow it on themselves, not the babies.

Like all stuff from professional welfare pushers, this article is a total waste of time. The Rudd Government will do things little differently from the Howard Government. The social balance will remain the same, and the only answer is for the “most vulnerable” to get their act together and manage their own affairs better.

So it is like this, those who rely on government largesse are the “vulnerable”

The “non-vulnerable” rely primarily on their own resources and resourcefulness.

So, any “cost cutting” by government, when what is being cut is not relied upon by the resourced and resourceful, has to be borne by the vulnerable.

I guess if what Keating did is any guide, at a time of massive government deficit budgets, which was reneged on his “Tax Cuts are Law” pledge, would not wash now that the incumbent government has inherited a massive annual budget surplus (however, I do wonder how long it will take before the usual socialist profligacy and asinine national government infrastructure projects change all that).

As is often the case, I agree with your post Leigh.

I am inclined to agree with Leigh on this occasion. To quote the scriptures, "The poor will be with us always". That is not to say that the government should do nothing to alleviate their condition however.

Whitlam thought that we should spend more money on education, but unfortunately most of the poor are not university material as others also seem to believe. Money spent on educating the poor would be better directed toward Technical education, an area which seems to have been largely overlooked, even by the Labor party. The rich are in a better position to educate their own children.

Let us see whether Kevin Rudd and his cohorts actually do something to revive this much needed area of education so that we can get the poor into the work force and reduce our reliance on imported expertise.

David

There is a major fallacy with suggestions that the Federal government can cut spending by reducing the payments to private schools and the subsidy of private medical insurance.

The fallacy is that people assume that all the people sending their children to private schools or taking out private medical insurance will continue to do so when the subsidy is removed.

In the case of private schools, the government expenditure per student is far below the expenditure on students in public schools, so a migration towards government schools will result in increased spending, not less.

Again, people have repeatedly demonstrated that they will only take out private medical insurance if it is worth their while. The figures quoted in the article are distorted, as people with an income of over $100k face a medicare surcharge if they do not take out private insurance. According to my calculations, it would only take 16% of people currently insured privately to go back to medicare for the government to lose out, even with the subsidy saving.

It is obvious that much of the opposition to these subsidies is ideological, and has nothing to do with the government saving money.

If you really want to save money, you must cut spending on items for which there is no alternative.

The examples that immediately come to mind are the ABC, SBS and the arts.

Other possibilities are politicians' salaries and expenses, but I think these can properly be assigned to the flying pigs department.

Plerdsus, I wouldn't mind seeing your calcuations re private health care.

As it is, the case of the healthcare situation in the U.S. vs the rest of the developed world fairly clearly demonstrates that healthcare costs substantially less when funded through a single-payer system. On that basis it's not at all clear to me that real money can be saved by encouraging taxpayers to partly fund their healthcare through private schemes. Certainly my preference would be that private healthcare should be for services that public hospitals do not offer (private rooms, cosmetic surgery etc.), hence anyone choosing to take up private healthcare gets no significant tax rebate, as virtually all medical expenses are still provided through public funds*. My wife chooses to pay for private healthcare purely on the basis of gaining a private room in maternity ward, and would do so even if we had to pay the surcharge also. I'm sure she's not the only one.

* there is undoubted benefit in freeing up public beds, but I do wonder exactly how much money is saved by doing so.

wizofaus,

Calculation of the percentage of private medical patients who need to go back to medicare for the government to lose out on scrapping the rebate.

Here are a few rough figures, which I calculated on the back of an envelope, and which I offer to someone who knows more about the detail to improve. All figures are per annum.

Current cost of 30% rebate = $3.5 billion per annum.

Add to this the other government payments to the private medical industry (age care, gold card, special rebates etc.), say another 800 million.

Now we know that people who use private medical pay extra costs not covered by insurance, and we can assume these add another 30%.

The sum total of the above figures gives a total cost of the private medical/hospital industry of around $19 billion. (My contacts think it is larger).

I think it is fair to assume that costs are broadly similar in public and private medicine, so we now need to calculate the percentage of private patients who need to leave to cost the govt the $3.5 billion it would save by scrubbing the rebate. If any more leave, it is behind.

Scrapping the 30% rebate must increase premiums by 42.85%, so people will leave.

3.5/19 = 18.42 % is the break-even figure.

Several contacts in the medical field consider this figure too high, and consider a figure around 16% would be closer to the mark. This would also take into account the fact that costs would not fall in proportion to patients, as many costs are fixed.

This calculation only involves the federal government, and does not include the increased costs state governments would incur.

I think it would be of great benefit if a poster with more detailed knowledge could improve this calculation. Exactly the same argument applies to the private school debate.