Why not introduce a flat 26% tax rate (with one tax free threshold of 20,000 adjusted every year for inflation) and absolutly no deductions. Based on the 2003 tax statistics this would generate the same PAYE tax that is currently generated now. Funnily enough this benefits nearly everyone except a small band of people around the $35,000 mark (but not disadvantaged by a lot, only a couple of hundred a year) and the top 3% of income earners who somehow seem to pay less than 26% of their income as PAYE (I would love to know how they do it.) An extra benefit would be all the money we would save by reducing the ATO staff by 9 tenths.

Also I think politicians should be taxed on their performance. Crap job 98% tax. Good job 90% tax. I don't think this would make it through parliment though.

The central flaw to Peter's argument is that it relies on average costs and use of public services. One of the reasons we have a tax system is that only the very wealthiest of us could afford to pay for, say, the costs of open heart surgery, or the education of a severely handicapped child. Taxes are our way of contributing to a central pool so that those people unfortunate enough to need very expensive medical/educational/whatever services can access them, regardless of their financial state. It saddens me that our society is becoming so individualistic that people like Peter fail to recognise this.

The other central flaw to Peter's argument is that he has failed to realise that we do not need to be more self-reliant. We need to be more inter-dependent.

It is community and relationships that make for happiness, not self-reliance or lower taxes.

Perhaps this is why people in Sweden who pay far more tax than we do are happier.

For some real up-to-date economic ideas from London School of Economics, Economics Professor Richard Layard , rather than Peter's tired old arguments go to http://www.abc.net.au/rn/talks/bbing/

Hello Molly I listened to Radio Nationals report on happiness too. It was very enlightening. I think it is a very good point that you make about interdependence. In spite of what is said about 'survival of the fittest' to excuse a lot of very inhumane behaviour, human beings are social creatures; we do need each other to surive.

While I consider myself to be independent - I am by no means isolationist - this idea of user pays & self reliance is very divisive. I really don't mind paying higher taxes for more inclusive services for more people. I do mind, however, that the current government trend is to collect a huge surplus and not reinvest in the community.

Market forces and user pays work very well in lots of areas. Where the neo-cons trip up, however, is when they are applied to children and the sick.
In fact, it seems to me you can only argue in favour of user pays and market forces if you first provide a level playing field for our kids via childcare, health and educational opportunity. Otherwise these forces simply entrench hereditary advantages and disadvantages. We had user-pays societies for centuries and all we got out of it was a class system. For pity's sake, lets not go back there.

Peter Saunders is correct to question the assumptions of an ever-increasing, self-perpetuating, enterprise-choking welfare state.

We need more people like him. His main point is that welfare churning is a wastelful, useless and mindless exercise. We are no so much taking from the rich to support the poor, but drawing blood from one arm, spilling some, and then injecting it back into the other arm. This is folly!

But the self-righteous socialists will say, "What about the poor? What about equality of opportunity and income redistribution?" To those I pose a challenge: What degree of equality will you be happy with? How do you measure equality anyway? What rational basis do you have for deciding how much should be taken from the rich and given to the poor? Is it really socially just to penalise someone just because he has more money than somebody else? Do you have any respect for the principle of private ownership and control and creation of wealth? Do you know how damaging it is for people to be dependent on welfare, or would you rather that no one was self-reliant? Do you know the difference between compassion and compulsion? Do you realise that the compassionate choices of individuals create a caring society, but taking from the "rich" to giving to the "poor" only leads to slavery?