Let's have a real efficiency drive

But what about huge government handouts to rich private schools? These institutions have gone beyond buying extra swimming pools and rowing boats and rifle ranges. They now are building recording studios and massive auditoria. Some apparently have millions of dollars in the bank.

Clearly the taxpayer would get a better return by having education funds invested in raising the standard of poorer schools. The marginal benefit from another dollar going to a very wealthy school is negligible. The idea that these grants keep fees low is nonsense. The point of high fees is to keep anyone but rich kids out. The more money they get, the higher fees go, not the other way round. They just have to find even more expensive things to spend the cash on.

The excuse for this inefficient use of public funds is that all kids deserve some government support for their education. That is a 'rights' argument. It should be refuted by the argument about marginal benefits to all taxpayers.

The same case applies to public funding of private health. The excuse for this massive expenditure of taxpayers' money is that people need a bit of encouragement from the government to outlay more of their own money for health care. The result is taxpayer support for fitness outlays, quack treatments and personal comfort. Where is the business case for all this?

More than half of all Australians do not have private health cover but they are being forced to prop up the richer half of the population. The recent ABC 4 Corners program on wasteful health procedures made the point, rather too gently, that the worst abuses take place in private hospitals. So now we know taxpayers are also being forced to finance wasteful and dangerous health care.

The efficiency gains that could be achieved from tackling just these three problems are immense. Getting rid of HR nonsense and creating an efficient legal system would deliver immediate cost benefits across business and save many tax dollars. Better allocation of government spending would make society more productive.

It is symptomatic of the depths to which political debate has sunk that these more serious efficiency arguments have no place in mainstream discourse. It is so much easier to worry about the hourly rate for serving coffee on a Sunday.