The Blog of Fleeced

This deserves high circulation!  Terje has looked at the figures and established the government’s big spending credentials.

In 1997, the budget was approximately AUD$121 billion.  In 2007, the size of the budget has blown out to $234 billion.  To put those figures in perspective, Terje makes the following startling observation:

In gross dollar terms the increase in the total cost of Federal government over the decade almost exactly equals the current total of all personal income taxes. Or to put it another way reducing all personal income tax to zero would leave the budget with the same gross revenue outcome as in Keating’s day.

Even adjusting for inflation, the increase represents a 34% increase in the size of government.  We could have seen some genuine tax reform – but instead, the money was squandered.  But the increase in size of government is actually worse, as John Humphreys points out:

The story is actually worse than what Terje says because of the governments treatment of GST. Before 2001 the government had a wholesale sales tax (WST) and passed that money on to the states through FAGS (financial assistence grants).

After 2001 they still had a tax (now called “GST”) and they still passed that money to the states… but they no longer reported this tax or the spending in the federal budget. Therefore they were able to make the government look artificially smaller.

So much for the low tax party!  Do I think the ALP would have done any better?  Truthfully, no I don’t… but this is no defense.  There is only one party that is intent on reducing the size of government, and that’s the LDP.