Ross Gittens in the Sydney Morning Herald gives a warning, citing that “The nation’s budget problem still won’t be solved even when…we get the federal budget back into surplus.”
As successive intergenerational reports demonstrate, on present policies government spending will just grow and grow, requiring ever-higher taxes.
The four biggest areas of spending include welfare benefits, health, education and infrastructure.
Of three categories – welfare benefits, health and education – the intergenerational reports make it clear health will be by far the fastest growing. It’s less because of the aging population, but more because of the advancements in medical technology have made it more expensive. Thus the budget will need to include an increase in the Medicare levy.
In terms of taxation, Ross Gittens believes that too many tax concessions have been delivered to those who do not need it, he supports Turnbull’s attempt to cut back on super-concessions and believes that “More must be done to cut back rapidly growing tax expenditures.
Furthermore if we want to achieve fiscal sustainability while restraining the rise in tax rates, we need to introduce along with the existing means-tested welfare system, a policy that does not pay for choice in goods already provided by the government namely public education and public health. In other words, if people want to go private, they should pay for it entirely.