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The Forum > Article Comments > A $30 billion annual boost that better government can deliver! > Comments

A $30 billion annual boost that better government can deliver! : Comments

By Mark Drummond, published 31/1/2001

Mark Drummond argues that a system of regional rather than state and local governments would save $30 billion

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I would dispute the method of analysis. It involves summing the "fixed costs" of states and assumes that Commonwealth fixed costs would not expand even after absorbing every school, hospital and police station in the country. It also uses the ACT as a model government, as though Canberra, with very little mining, agriculture, industry or geographic distance, is indicative of Australia generally, which it is not.

Finally it asserts without evidence that Australian non-governmental GDP would increase by 5%, saving $10 billion as a result of centralised government. How does increasing GDP save money? It doesn't, as GDP equals consumption + investment + govt spending + exports - imports.

Unfortunately the whole analysis lacks rigour, and I cannot find anything in the article which shows how government expenditure would be reduced in any way.
Posted by David Latimer, Friday, 16 June 2006 2:01:52 AM
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