Towards a new social democracy

It’s clear that more spending should be targeted to those who are most disadvantaged, but targeted in ways that alter behaviour.

Aboriginal students in high school could be paid to attend and learn.

Early learning should be universal, prioritised and funded appropriately. Despite appearances Rudd Labor has only gone part way to satisfying this.

Tax cuts and social security reform should be progressive and directed at workforce participation among the low paid.

Weighted school vouchers would encourage school choice and the ability of parents from disadvantaged backgrounds to choose better schools.

Pricing greenhouse emissions globally is essential but not picking green technology winners.

Financial regulations striking a balance between making finance widely available to households and firms while ensuring the lending activities of financial institutions don’t pose undue risks to depositors and the wider economy.

Embedding competition in the economy, especially in areas such as the parallel importation of books, makes it easier for poor families to afford the tools of advancement.

Indeed aside from a fiscal stimulus to generate work during the global recession, when measured against criteria to alter behaviour among disadvantaged groups to induce better outcomes, the Rudd Government has conspicuously not delivered.

Yet we should also accept that opportunity results from the wider growth of the economy and that social investment should be funded by a budget in balance over the economic cycle.

Tax reform should be implemented, including raising the GST so that progressive tax cuts can be afforded that encourage work along with means tested education vouchers that make better schools available to working families and more funding for schools with disadvantaged kids.

While there is substantial middle class welfare, like the family tax benefits that should be repackaged as working tax credits, doing this is not enough by itself to rebalance the Budget without substantial cuts in government spending.