An Agenda For Government
patrickcallioni | June 2, 2011
Last week, as I wished a pox on both the federal government and the would-be government, I said that I would put forward a constructive agenda for government dealing with major policy challenges. Here it is.
First, let’s deal with the issue of creating a sustainable economy.
The carbon tax should go ahead, despite all the whingeing and carping from rent-seekers and populists. However, the government should also fund some direct action. I suggest focusing on the main sources of pollution, coal-fired power stations and elements of the farming industry.
The government should introduce accelerated, generous depreciation allowances for the construction of power sources that do not rely on coal. The advantage of this method is that it requires the greener power stations to be built before the generators get anything from the taxpayer.
Second, growing rice and cotton anywhere that requires irrigation should be phased out, with growers helped to move out of those industries by government grants and loans.
Third, present methods of taxing road use should be replaced by a single road use tax, based on the level of use of the means of transportation and the carbon it generates. Fourth, public transport should be provided free of cost, with funding provided by the Australian government and by carbon credits. That will do for a start.
Now let’s pay for this.
First, all federal funding for private schools should stop. The government should provide a one off $1 billion dollar grant to set up a fund – to be managed by the Future Fund – that would provide grants and low interest loans to schools in need.
Second, the chaplains in schools program should be scrapped.
Third, the private health insurance rebate should be phase out over four years.
Fourth, private health funds should be regulated as a utility, by an independent regulator that would watch over their cost structures and stop them being a funnel from your pocket and mine to the pockets of health care providers.
Fifth, the number of senior executive and executive staff in government should be cut by 25% over three years, by natural attrition and voluntary redundancies. For more public sector reform, see my proposals here.
Sixth, the miners should be taxed as they would tax us if they could – oh, wait a minute, they do tax us. How do they tax us? Simple, because they pay little tax and get most of their infrastructure built for them by the taxpayer – which is a cute form of reverse taxation (or rent-seeking). Let’s stop that too. If mining companies need infrastructure, let them pay for it, either directly or through the tax system.
Now let us turn to the issue of refugees and migration in general.
Incarcerating refugees is costing us over $1 billion per year and is depriving the economy of workers it needs. It does nothing to stop so-called people smugglers. If we want to stop people smuggling, we should do what we have at least twice before.
The government should send migration officers to camps overseas, where they can select those who would integrate into our society – which is most people, by the way – and then after health checks conducted overseas should fly them to Australia. These newcomers would be asked to sign up for a stint of at least two years in nominated regional areas.
This would save us billions, destroy the people smuggling business, provide much needed workers for the economy, and restore our international reputation. We have done it before, after World War 2 and after the Vietnam War, so we know that it would work.
Next, let us consider the challenge of funding the infrastructure we will need for the 21st century.
Infrastructure Australia and the NBN are a good start. However, we need more. We need to start reducing our reliance on road and air for freight transport – they are expensive, bad for the environment and require huge subsidies from taxpayers.
What subsidies you ask? Who do you think pays for roads and airports and all that? We do. The only alternative is to build a reliable, relatively fast rail network, capable of carrying passengers and freight.
To fund that, we need to expand the use of the bond market to do what it is good at, which is to support investment in the long term. The stock market does this very badly, if at all, because of expectations of quick returns. I think that investors around the world, as well as in Australia, would buy into Aussie infrastructure bonds. This would play into the medium term trend that will see an accelerating shift from stocks to bonds.
While on the subject of the NBN, NBN Co. should be asked to provide free Wi-Fi to all metropolitan and regional centres, as part of its corporate obligations to the taxpayers of Australia. This could be done relatively quickly and would show to the sceptics that the NBN model can provide value even in the short term.
Towers suitable for the installation of Wi-Fi broadcasters already exist in most, if not all cities and towns, which means that the cost of doing this would be relatively small. The returns would be huge, both tangible and intangible, as Australia would shed its reputation for being backwards when it comes to embracing the future of communications.
Health care is a concern for all of us, directly and indirectly. Stopping the private health insurance rebate would free up at least $3 billion a year that could be invested in expanding Medicare to provide dental care to Australians who need it. This would benefit individuals and the whole community, reducing future health costs significantly.
The nine bureaucracies that manage health care in Australia now – which they do very badly – should be amalgamated into one national body, to be owned and funded by the nine governments in appropriate shares. I estimate that this would reduce significantly the proportion of workers in the health sector who support health care providers.
By my estimate, of every dollar that goes into health care, only about 30 cents is used to provide a service to someone who needs it. The rest is used up by intermediaries. A similar calculation could be done for education too.
Ten years ago I estimated that the cost of the multi-headed bureaucracy supporting the vocational education and training sector was $3 billion per year. I shudder to think what the cost is now and how much is spent paying clerks in the various education departments around Australia.
Dear Tony, Julia and Bob, feel free to use anything you see here and feel free to improve on it too, if you can.
Patrick Callioni is a former senior public servant, with the Queensland and Australian Governments, and is now the Senior Executive Advisor, Domestic and International Markets, with the Sustain Group www.sustaingroup.net. His books Compliance and Regulation in the Financial Services Industry & Waves of Change: Managing Global Trends in the Financial Services Industry are available at Amazon
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StephenWilson
June 4, 2011 at 10:31 pm
Bravo
Bravo Patrick. Two thumbs up. Way up.
Steve.