I have no reason to dispute Des' figures - taxes are up and government spend is down - I suspect it could be reduced further still.

It is edifying to go to the budget papers of the Prime Minister Cabinet and note the the Outcome Area with the smallest budget allocation is that of Social Policy Development - the hungriest sector is that dealing with keepinf us safe from Osama and his donkey brigade - but that is a horse of a different colour.

The problem with each layer of government is that for evey dollar they save in expenses - usually in service related area they take back about 75c in rewards systems for themselves - they report the decereased spend in service areaa as efficiencies and bury the added extras with which they shower themselves.

Have look for example of the expenditure of the current Mayor for Wodonga on her self and her CEO - and ask your self if you want her in powere any where else - she is standing for pre selection for a Labour seat!

Yes government can be down sized - at the same time money can be saved and services preserved - but as long as governments essentially set their own terms and conditions - the savings and down sizing will be cosmetic and at the expense of the tax payer

Ah good old Des. What he really wants to say is "privatise the profits, and leave the losses to be picked up by the punters". Many people like big Govt. Des. They dont even want them to carry Billion$ surplusses. They would like to see it spent on health and education. Paid for by the Govt., and not run for profit by Des and his mates.

hedgehog as a member of generation y i'm all for budget surpluses. i'd even advocate an increase in current taxes and a further reduction in discretionary spending. to spend up big because we're operating a surplus is a short sighted view of things.

the government isn't running a surplus because of higher taxes or reduced spending. it's only natural for a government to operate a surplus when the economy is booming. times are good.

unemployment figures out this morning indicate the lowest level of unemployment in 30 years (i think), this means not only have welfare payments been reduced but at the same time tax revenue has increased. our export industry is thriving and our terms of trade are good. the recent reporting season saw businesses profits surge.

and the government - well, they don't operate for profit, they are merely provisioning for the future, i'd rather the aging population contribute towards future payments of presently arising liabilities.

Generation 'ME' did you say. Working a couple of hours a week didnt constitute employment in my day.

woah! good response. hedgehog i think you'll find i work similar hours to yourself, if not more.

peff,

I think you miss the point. Both this government and the previous one have redefined the meaning of words like"unemployment" and "job creation" numerous times.

If you are only able to find one hour per week paid work, you are officially classed as employed(very different from what the word meant 25 years ago), as are those with temporary jobs, those on training schemes etc. REAL unemployment is much higher than "official" unemployment.

As for job creation, it only takes into account those who find employment and ignores those who lose it through redundancy.
The governments claim of 20- 30 000 new, permanent jobs created every month means that John Howard must have presided over the creation of 2 or 3 million new permenant jobs in his career.
The whole country,s population has not increased by that much, let alone the working age poulation, so most claims of all time low unemployment rates and unbelieveable job growth are probably little more than worthless political dribble, which institutions like the reserve bank unfortunatly must base important desicions on.

I too are in favour of bigger government than we have been reduced to. Many privatised and public-private partenerships have failed to bring about the promised benefits, because their original function of maximising the public good became subordinate to maximising private profit. Of course some amount of surplus needs to be set aside "just in case", but to gloat over the biggest surplus in history while vital public services and infrastructure that hold our society together go to rack and ruin is utterly despcicable.

Fozz, you've made some good points. i too am not a big fan of the current classification of 'employement' by the abs.

are we at record low levels of unemployment? i don't know. however, what i do know is that the labour market is extremely tight. you can see it through upward pressure on the wage level and the multitude of articles on skill shortages. this would indicate to me that unemployment is indeed at a fairly low level.

ok, so higher wages / employment, progressive tax structure = higher tax revenue that transmutes into an eventual surplus.

Now the thing to remember about this surplus is it is provisioning for a specific purpose. as the baby boomer generation begins to retire the government has to bring on to their balance sheet a superannuation liability of about $70bn. that's a lot of money. and it's a lot of tax.

now i'd rather the government fund a portion of that liability with tax generated from the generation that is set to enjoy the benefits. if we spend up big now on infrastructure and the like, then in 10 years time that burden has to be carried by the current working population who receive no benefit from it.

i think there's a term - 'intergenerational accounting' that explores these sorts of situations. i don't think that anyone could argue that baby boomers have had a hard time of it, and this provisioning ensures that the aging generation are taking responsibility for some of the policy actions over their working lifetime.

peff

Major asset sales under the Government have totalled $46.1 billion.

Retirement costs in the Government sector are also rising. When our Government was elected the unfunded superannuation of the Commonwealth was $66 billion. This year it is estimated at $95 billion.

Government surpluses since its election $64.2 billion.
(source Peter Costello).

To me this adds up to a deficit of $10.9 billion, take the $30 billion in the Future “slush” Fund and it equates to $40.9 billion in infrastructure that has not been spent.

I don’t really give a rats, but it is your generation that will have to pay for this lack of spending. Remember all the Commonwealth employees are not going to retire on the same day and demand a lump sum payment.

Don’t get too hung up on baby boomer demographics, the bulge will pass in 10 years. Remember money not spent now will have to be spent later by your generation.

Steve,

i guess it's a trade-off between spending today or tomorrow. i'd prefer to provision for the future - that is forgo current consumption in return for greater future consumption, where you'd prefer the reverse. fair enough. i'm sure both methods of approach have merit.

however, i would argue that given the current business cycle, tax revenue is healthy and the economy is booming - now might be a good time to set something aside for a rainy day. particularly given Australia's attitude towards savings and the current account defecit.

just a quick one about government asset sales (as i'm not too sure what you were trying to convey with the figure in your last post). let's assume the government owns a building in Canberra. it's worth $100. the current government wants to up spending a bit so sells the building for $100 (the same applies to bonds). fantastic, additional revenue. however, now the government, who also inhabits the building has to pay rent. and in fact the government sold it on a lease-back agreement whereby the government will lease the premesis for $10 a year for 10 years. there's no net end benefit. if you deploy the sale of assets as a response to burgeoning liabilities you're taking a short-run approach to long-run problems.

peff

you too make some good points bit I remain sceptical of the claim of record low unemployment.

It cannot be denied that there is a skills shortage which creates a tight labour market and increases these workers bargaining power - but only in these particular areas. Australia has suffered a constant drain of skilled, semi-skilled and service industry jobs going abroad, so real job creation in the face of this must be difficult at best. Perhaps years of off-shoring skilled labour has collided with a more recent booming demand for it, creating a shortage of the very workers that the free market has spent so much time eliminating from this country because they were cheaper in India and China.

I can honestly say I do not know anyone who has experienced upward pressure on their pay packet alhtough I have met several who have had their take home pay reduced, courtesy of workchoices.

AS for Des Moore, perhaps he has so much spare cash tucked away in socks and undies that he has no need for affordable public services-but most people do. After having lived through the attempt to "economically rationalise" my areas water supply by the private company that runs the area water board, I never want vital public utitiies like water, electricity, hospitals etc owned by a handfull of fat cats sitting in an office in New York who have no interest in what happens to people here unless it affects their bottom line.