11 State a set of 5 principles which should govern economic management and invite the opposition to accept them so that as much as possible debate on policies is about priorities, not underlying fundamentals, and where fundamentals are being challenged, the disagreement is plain. These principles would be:
- that commonwealth taxation should be no more than 23.9% of GDP;
- that excess government debt must be repaid over an agreed period of time;
- that borrowing should only be for productive infrastructure, not recurring expenditure;
- that the economy be benchmarked against international best practice; and
- that, as debt is repaid, government as a percentage of the economy should be shrunk.
4. Home affordability
Home affordability is an issue, particularly with younger Australians, for practical reasons, but it ought to be an issue for all of us, because home ownership gives the owner a bigger stake in the country, and therefore a bigger stake in good government.
House prices are likely to fall in the near term because of a de factocredit squeeze, combined with an anticipated tightening in interest rates. Nevertheless, over the long-term home ownership provides Australians with security, and is cheaper than renting over the long term, especially given the preferential tax treatment of owner-occupied housing.
Labor policy, which is to confine negative gearing to new properties, and to increase the rate of capital gains tax by 50%, is a tax grab disguised as a housing affordability strategy, which will perversely increase house prices by causing a housing shortage. The government's answer is the concessionally-taxed First Home Super Saver Scheme.
Our research shows that the deposit gap is the problem, not housing repayments. We recommend the government:
12 Supplement the First Home Super Saver Scheme by allowing first home buyers to top up their deposit with a loan from their superfund, recognising that home ownership is a fundamental part of any retirement plan.
5. Freedom of speech
The government has to deal with the report of the Ruddock Inquiry into Religious Freedom. This gives it an opportunity to demonstrate its commitment to free speech, in two ways. Current laws actually contain provisions against blasphemy, under one guise or another. This is wrong and should be reversed. No religion should be immune from criticism, even aggressive criticism. At the same time, people who adhere to a religion should be able to express views in line with their faith and practice freedom of association in religious activities. Our right to free speech actually grew out of our freedom of religion, and it is particularly important that this freedom is retained.
We, therefore, recommend the government:
13 Consult with the states to remove all blasphemy laws from state statutes, and simultaneously introduces legislation to guarantee freedom of religious expression.
6. Education P-12
Education standards are falling in Australia, despite world-record expenditure. The government needs to change direction in education debate from resources to outcomes. That means looking at what is taught and how it is taught and devolving more responsibility back to the states, using a consciously federalist model where different states can try different approaches, and there is rigorous measurement of outcomes so that an array of natural experiments will produce better national outcomes.
We recommend that the government:
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