Increasing net spending is shameful when we are stuck in an 11-year stretch of budget deficits and growing government debt; a cruel burden on the next generation. And as the budget papers reveal, real government spending per person has never been higher.
With even a little bit of spending restraint, perhaps drawing on the ideas I set out in my alternative budget, we could achieve a budget surplus and be paying down debt right now.
Unfortunately, the Government's plan for eventually returning to surplus continues to rely on extracting more revenue. Yet the real tax burden per person has never been higher than it is now, and the Government is planning to increase this burden every year for the next four years, notwithstanding its plans for tax cuts (some of which are up to three elections away). By every measure, tax is going up.
Even the Government's plan to tax its way to surplus is far from certain. For instance, it hopes to raise an extra $3.7 billion in tobacco taxes over four years by cracking down on the black market (which the Government created when it put $20 of tax on a pack of cigarettes). The idea that tobacco smugglers will suddenly give up because of increased enforcement, and the smokers buying illicit cigarettes will swap back to legal taxed products, and not use imported e-cigarettes, is totally fanciful.
It seems we will continue to live beyond our means and suffer tax-and-spend governments for many years to come, regardless of which party is in power.
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