It is Australia's Budget Day. The booming Australian mining sector has seen a massive tax windfall for the Australian Federal Government, with one economist suggesting A$20 billion should be put away and invested, much like Norway and other governments do, to fund future liabilities and to cover federal spending for a "rainy day". However no, the Rudd government (and it's not much worse than Howard) will spend it like the proverbial drunken sailor, although it will also give tax cuts. The result is further bloating of the Australian Federal Government, further dependency on middle class and corporate welfare, and simply sheer waste, when Australians could be enjoying low flat federal taxes and a diversifying economy, rather than one that milks commodities and keeps the rest of the economy propped up on transfers.
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However, whilst the best time to squeeze efficiency out of the public sector would be now, the incentives to do so are the poorest. Why do politicians love spending other people's money so much, and why do people let them do it?
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