Policies to cut out and keepFebruary 6, 2015
I MADE history in the Senate last December. I am the first senator to introduce a bill that received only one vote in its favour, mine. Across the chamber, the other senators were either herded together by their whips or disagreed with the bill, or both.
What was the content of this outrageous, history-making bill that united the Coalition, Labor, Greens, PUPs and other cross-benchers?
Was it a plan to use nuclear weapons to mine the Great Barrier Reef? A bill allowing schoolchildren a free cigarette every morning, or permitting hunters to use national parks for koala culls?
In fact, my history-making unpopular bill was a modest proposal to cut middle-class welfare — a bill to limit eligibility to Family Tax Benefit A, mostly affecting families with an income higher than $90,000 a year. Many politicians talk about their dislike for middle-class welfare, but when it came down to it, not one of them was willing to take action against it. Fixing the budget is seen as a problem to be discussed in theory rather than addressed in practice.
Yet Finance Minister Mathias Cormann was right when he said that for all of the complaints about budget fairness, it is unfair in the extreme to saddle our children with debt. So, ignoring for a moment my lack of success with such a minor measure, what would I do if I had the numbers?
First off, I would abolish the $100 billion of commonwealth government payments to states, territories and local governments, using some of the savings to cut income tax. This would prompt the states to look for ways to deliver services more effectively, with better targeting to those in need. Measures such as means-testing access to public hospitals and schools, and putting tolls on arterial roads and highways, might be considered. Even if they reacted by increasing taxes, which I would not encourage, the states have access to substantial tax bases, many of them more efficient than the commonwealth’s income tax.
Most importantly, the abolition of commonwealth payments to states would increase their autonomy and accountability, allow greater competition and experimentation, and end a system where funds are effectively taken from competent state governments and given to inept state governments.
With respect to the commonwealth’s activities, I also support ending assistance to industries such as agriculture, tourism, mining, manufacturing and construction. Besides, funding for the arts industry, the sports industry and the communications industry, including the ABC and SBS, should also cease. Corporate welfare doesn’t stop being corporate welfare when the corporation is government-owned, or when it’s a corporation you like, such as a renewable energy business.
We also need to bring back a central support role for family and community in caring for those in need, so that taxpayer support can be focused on the least well off. With that in mind, we should revisit the recommendations of the Commission of Audit, which include the removal of the Schoolkids Bonus and FTB Part B.
We should also include the family home in the assets test for the aged pension. So long as only the home’s value above a certain threshold is taken into account, and provided there is always access to a pension-equivalent payment via a reverse mortgage or something similar, there is no reason to exclude the family home.
Finally, the salaries of the 1.9 million Australians who work for one of the three tiers of government have grown more quickly than salaries in the private sector over the past decade. A 10 per cent cut would be reasonable.
As I have explained to the Senate, I support just about all of the spending cuts proposed by others. The only exception is the plan to temporarily remove the dole for unemployed youth, which is bizarre when the government prices them out of jobs through the minimum wage. While we hear complaints about “dole bludgers”, the truth is that spending on family payments is more than three times greater than unemployment benefits.
For all of the talk from the government and others about a budget problem, my attempt to make a modest cut to middle-class welfare was a telling moment.
It suggests that perhaps what we face is not so much a budgetary crisis as a shortage of testicular or ovarian fortitude in our legislative chambers.