I tend to think that government, especially the current federal Labor government, has a natural inclination to raises taxes and spend our (the taxpayers, or shareholders in the case of company tax) money on providing services that would be better off left as 'user pays' - ie. allowing adults to choose how to spend their own money. But I suspect that elected politicians have such a strong natural inclination to control and 'run the country', that they simply can't resist any opportunity for social re-engineering or provision of additional public 'services' that they feel the public "need"(and should pay for via increased taxation, rather than winding back other areas of government expenditure). Recent examples are the NDIS, the ill-considered and unsustainable solar panels rebate scheme, and the 'gold-plated' NBN scheme. The alternative would have been to leave people to choose whether or not to spend some of their income on such discretionary items as loss of income and TPD and life insurance, having solar panels installed, or paying for a T1 internet connection if they have need for truly 'high speed' internet connectivity. Even in the area of public education, beyond the provision of compulsory education services, it should be left up to parents to decide how much 'extra' to spend on their kids education.
The funny thing, from my point of view, is that despite not being in favour of many of the more extravagant government spending programs announced in recent years, I may well end up benefitting considerably from many of them. With two sons in public school, one in a selective high school and the younger one looking likely to get into OC and then selective high school, and both likely to go on to a tertiary education, we will be net beneficiaries from public education. I also paid a very low rate of HELP fees for my Master of Astronomy degree (as science was a 'national priority' field so a discounted HELP-fee rate applied), and I (currently) pay no fees for my research MSc and PhD studies as it is covered by the federal Research Training Scheme (RTS).
And the highly-subsidised solar panels sitting on my garage roof mean that we get considerably more in payments for the electricity generated than our electricity bill has increased to pay for the scheme.
It was announced in the past week that the new 423-bed hospital planned for our area will be completed by about 2018 via a public-private partnership, and that transport services will be improved in our area as part of this development. Living less than one kilometre from the site, this is likely to push up the value of our house by the time I retire and we move to the country and either sell or rent out our house. And if we don't sell our investment rental property during the next year or so it may also benefit from a boost in prices in that adjacent suburb when the new hospital becomes a reality.
The NBN rollout has just been extended to include our suburb in the updated '3-year plan' announced by Conroy yesterday, so with two desktop PCs and four laptops all using the internet in our house, regular Skype conversations between the kids and my parents living in the country, and my use of the internet to run data reductions on my university workstation by remote connection we will probably save some money through having access to the NBN, rather than paying full-cost for additional 3G wireless connections or other upgrade to our internet connectivity of the next few years.
Even the NDIS may save me considerable money in the next couple of years. Paying for life insurance, TPD and loss-of-income insurance costs me quite a lot, so, depending on the details of the NDIS scheme, I could save more than a thousand dollars a year up to retirement age simply by being able to drop my loss-of-income insurance.
Most of these new services appear likely to come at little or no cost to me personally. My geared investments are tax effective, meaning that my taxable income is fairly low, but on the other hand any further tightening of 'middle class welfare' won't have any impact on us as we already didn't receive any family tax benefits, or the education tax refund (or the new 'Schoolkids bonus' that replaced it), or any other 'family assistance' payments due to the way that Adjusted Taxable Income (ATI) is calculated. And the 50% tax rebate on childcare payments isn't means tested and looks likely to remain so.
While I won't be surprised if I do end up paying more, possibly through changes to the taxation of capital gains, superannuation or how negatively geared investments are treated, at the moment it definitely appears not to be a case of 'user pays', or even a case of the 'better off' paying for improved public services for the poor and needy.
Aside from being very inefficient to raise tax revenue and then give the money back to those who were taxed via public services that they would otherwise have paid for privately, public works and public services often being less cost-effective than privately funded and managed projects. It seems that as both parties fight over the 'middle ground' of swinging voters and 'working families', the desire to make new programs please everyone and the sources of funding offend no-one is actually leading to greater confusion and dissatisfaction amongst voters. People are not sure exactly what benefits will flow from the proposed programs, and are also not sure if the funding will end up coming out of their pocket.
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