Dispatches From the Moderate Left

Friday, May 20, 2005

Quickie Budget Opinions (Aust)

Two interesting opinions in today's Age on the budget. Ross Gittins takes the unfair line on the tax cuts and welfare changes and while I don't totally agree with him, it's still an interesting article:
One of the great doctrines of our age [i]s a belief that the rich don't work because they have too little money, while the poor don't work because they have too much... to get the rich to work harder you have to give them more money; to get the poor to work you have to give them less.

I'm in much closer agreement with Kenneth Davidson's opinion on the Future Fund:
The most likely effect of government pumping some $140 billion into the sharemarket is to boost share prices, add to consumption and raise the cost and so reduce the provision for vitally needed infrastructure... The only real beneficiaries will be the fund managers who will earn $60 million straight away, rising to $500 million as the fund grows.

I think the Future Fund is a fundamentally silly accounting trick. The government has no business whatsoever holding on to wads of cash, even if it's investing it to pay for future pension liabilities. If the government has too much money it should either make long term investment decisions or give the money back to the people it belongs to. It's never going to go insolvent so all this worry about future pension liabilities is bogus. If it has to raise taxes in the future to pay for them, so what? At least the public had the money to do what it will with it in the mean time.


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