What’s so bad about inequity?

Hey Bill, what about a royal commission into rating agencies? Aren't they the capitalist bastards threatening to downgrade the Australian government because it pays for programs, pensions and public servants with money borrowed from foreigners?

What better way to avoid the interest bill, Bill, than by blaming the agencies that blow the whistle on debt?

After all, it was these same baddies that failed to blow the whistle on banks, which passed on dodgy derivatives that created the global financial crisis.

And we know you are busting to call a banking royal commission. A rating agency inquiry would be a perfect second decoy. Rating agencies are at the very apex of the capitalist system.

You could call in Kevin Rudd to head the inquiry.

Kevin and Bill know that Australians are paying $1 billion a month interest on the unproductive debt that their Labor government racked up.

And keep in mind that the unfunded "fantasy" promises of Labor at the previous election, in education and hospitals, and Liberal and Labor fantasy funding for the National Disability Insurance Scheme, will ensure that the interest bill continues to rise.

I believe there are six Labor (and Liberal) "fantasy promises", costed to 2025-26:

• National Disability Insurance Scheme, $111bn.
• "Restoring" hospital funding, $73bn.
• Student loans, $62bn.
• Retaining carbon tax "compensation", $57bn.
• Pension increases at average weekly earnings, $52bn.
• Gonski school increases, $37bn.

The Australian's economics editor David Uren and political correspondent David Crowe this month listed seven, but defence spending, albeit with controversy over the choice, place of manufacture and price of aircraft and submarines, is essential.

As Robert Harcourt stated in a letter to the editor: "Australia now has more people who vote for their money than who work for it," an observation confirmed by Adam Creighton and Sid Maher in The Weekend Australian . Taking benefits from voters is tough politics.

Mind you, interest Bill has been mightily hampered in his decoy plot by the Australia Institute, which arranged for 50 or so "intellectuals" to sign an open letter suggesting that "a debate about tax reform should begin with the question of how much tax is required to fund the services we need to build a fair and decent society in Australia".

These intellectuals are proposing that there is a known fair amount to which each is due and that until that amount has been reached the taxpayer has to keep paying. The letter also contained the new canard, "inequality harms growth".

The Australia Institute acolytes should read The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton, the 2015 Nobel prizewinner in economics.

Deaton's book is the story of progress, cast as "the endless dance between progress and inequality, about how progress creates inequality, and how inequality can sometimes be helpful - showing others the way, or providing incentives for catching up - and sometimes unhelpful - when those who have escaped protect their positions by destroying escape routes behind them". Only in the latter sense can inequality be said to be harmful.

The rich in Australia have not set out to destroy escape routes by, for example, destroying public schools and hospitals. Note to the Grattan Institute: designs on the rich are pure envy.

As Deaton and Mancur Olson before him argue: "rent-seeking of an ever-growing number of focused interest groups pursuing their own self-interest at the expense of an uncoordinated majority" may harm economic growth. What leftist acolytes fail to understand is that their supporters are also pursuing self-interest.

Equity is an industry designed to take your money.

It starts with the proposition that money belongs to government and, after deducting for the industry's professional expenses, and the achievement of its great designs, the remainder is yours.

Bill knows a preponderance of public sector workers and beneficiaries butter his bread. I say preponderance because I know many who are aghast at Labor's propensity to invent a need and spend money fixing it.

No one in the government is suggesting denying access to schools and health services. These services are well funded. However, if public debts climb too high, there may come a time when these services fall into disrepair.

As I said to a priest in recent years who argued the need for more money for the poor, if you raise money among parishioners willing to give, good luck to you, but if you want government to confiscate other people's money, you have to appreciate that governments have to ask permission.

Perhaps you could hold an inquiry into the Rudd-Gillard governments' rank disregard for the taxpayers of Australia.

Now that would be interesting, Bill.