Tuesday, June 24, 2008

Taxpayers don't want to pay more and get nothing either

The PSA, which backs the Labour Party and which consistently supports growth in government spending, growth in the number of bureaucrats and resists competition from the private sector with state provided services, has conducted a survey - which of course is not political, no, never - which according to Stuff says "60 per cent (of those surveyed) did not want tax cuts bigger than those in the May budget if that meant reduced public service spending or increased Government borrowing." So an implied reference to Labour policy, and National, ACT, Libertarianz, United Future and any other policy of higher tax cuts - but it's ok under the Electoral Finance Act isn't it? Of course - because it benefits Labour.

The problem with the survey is obvious in three ways.

First it implies that the government is optimally efficient, that there is no scope at all to cut spending significantly without cutting the "services" people love, which basically means health, education and law and order (how many really give a damn about welfare benefits, or the good part of the bureaucracy dedicated to giving advice or dishing out small subsidies here and there, unless you benefit from it). This of course is nonsense. The government does a fair bit that if cut wouldn't hurt the services people love, just look at the names of so many government agencies to see that we wouldn't miss the Families Commission, Te Mangai Paho, NZ On Air, the Human Rights Commission, Office of the Childrens' Commissioner. All small fry mainly, but they do add up. Beyond that, who can pretend the big government agencies of education and health are all well focused on delivering optimal outcomes for consumers. They don't have the incentives to do so.

The second problem is that the counterfactual isn't placed either. Do people support paying more in tax, over and above inflation, to see no discernible improvement in services? You see I pointed out a month or so ago that had Labour simply increased spending to reflect inflation, the government would be spending NZ$12 billion LESS this year than it currently is. However it has spent far more, and have you noticed it? Maybe you have, maybe your school has had a new building - but would that have happened anyway? What it is hard to say is that increasing spending by double the rate of inflation has generated improvements of the same order. You see you ARE paying more in tax in real terms than you were in 1999, has it been worth it? Would you spend more and get the same improvement in quality? No the PSA wont confront that.

Thirdly and more importantly, the PSA wont ask whether you'd rather have the option of getting some of your taxes back to buy your own health care and education for your family. You see the idea you could opt out of the monopolies it makes you fund is an anathema. I wonder why they are so scared of competition, so scared of consumers putting their money where they want it?

Maybe because the PSA is interested first and foremost in protecting the jobs and wages of its members - if it means taxpayers paying more, their members working less, and being less accountable, they will support it - and that is what's fundamentally wrong with statism. No accountability to individuals for failing to deliver what is promised and what they have been forced to pay for, just moans that "well if you paid more tax then....".

It's quite simply fraud.

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