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Thursday, June 09, 2005

How much is enough?

Correct me if I am wrong. Socialists believe big government is necessary. The government needs to regulate, deliver services and worry about all of the things that it needs to worry about on our behalf. Can you smoke in a pub? Can you buy a scratchie? Should taxes on sherry go up? Can we allow GE crops?

Socialists don't trust business to supply core services, so it tends to run "key" services itself.

Importantly, Socialist governments provide a welfare safety net so that folks out of a job can survive until such time as they can get another job.

To do all of these things, it taxes. It taxes businesses, which more or less pass the costs on in the products they sell. It taxes income, which also affects prices. The amount of money in a pay packet, after taxes can be spent on whatever the worker so desires. After food, rent, clothing, utilities and other incidentals of course.


The average family in NZ has to look at this left over income, and generally set a budget. With a budget, maybe the daily newspaper subscription gets cut, but the Saturday edition is kept. The Listener stays, but Better Homes and Gardens goes. Maybe the juice is watered down a little. Dad keeps the family car a year or two longer. The next car will be second hand and have a smaller engine to reduce fuel costs.

Does the government have the same kind of fiscal responsibility to budget? Government spending as a percentage of GDP has been creeping up and up. They spent 53 billion last year. By 2009, they are expecting to spend 73 billion a year. Is there a limit?

With an 8 billion dollar surplus, another 24,000 bureaucrats costing an extra billion dollars, and outcomes for Education, Health, Welfare and Policing barely changed we hear from Cullen that no tax cuts are likely and the bureaucracy is set to continue its expansion.

And how is the money spent? We have a breastfeeding commission to promote the very worthy information about the benefits of breasfeeding - but money for Womens Refuge services is languishing. Furthermore, the Human Rights Commission is the one looking into breastfeeding issues and the Ministry for Child Youth and Family (CYF) has breastfeeding awareness kits and a whole raft of people involved in that area. In Australia, breastfeeding is promoted through a volunteer association, and quite effectively. Do we really need an entire commission, or could we have boosted CYF and some of the non-government organisations (plunkett, playcentres, nursing mothers etc)?

We have a Families Commission legislated to focus on families generally, rather than individual families or cases. But government organisations like Ministry for Social Development (encompassing CYF, Working Age People's Policy, Child Family and Community Policy Group, plus several strategic policy groups tasked to consider families), sections within the Justice department and the Ministry of Education have plenty of experts looking at families and suggesting policy about families. That's just the tip of the iceberg.

So I come back to the question about how much is enough? We have been told the money we have been taxed is not coming back. In fact, there have been over 22 tax hikes or new taxes since Labour came into power. When Labour need more money, they just raise taxes. There is no need to budget for them. But with every interest rate rise and tax rise, working class and middle class NZ (those earning under $120,000 pa per household) need to review their budget. The spending as a percentage of GDP climbs. The surplus climbs. The government involves itself in more and more social activity.

After adding 24,000 bureaucrats, any mention of a reduction in spending and Cullen annouces that cutting 1 billion dollars will be cutting 300,000 nurses or teachers or some such number of core jobs. How about winding back the extra employees they took on since 1999? Why is that not an option?

Just what is the limit to government spending? Can we get assurances they will never go over 33% of GDP? What about a written contract with tax payers that hitting 40% results in instant dismissal? If it isn't going to happen, it's safe to promise - right?

Note: This post is a variation of my previous post: Good Kiwis Learn to Budget
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Posted by ZenTiger | 6/09/2005 11:45:00 PM