The worst of wasteful government spending

Pre-NDIS state and federal disability funding of $6.5 billion was originally expected to rise to $13.6 billion. The Productivity Commission upped this estimate to $22 billion for the "first full year of operation". Fears are growing that the blowout will be far greater. Official figures reportedlyforecast the total cost ballooning to $32bn a year in 2028-29.

8. Cost-ineffective Government Administrative Practices. Governments seem to be innately incapable of getting value-for-money in much of their everyday spending. We still also have end-of-year spending sprees, whereby government agencies routinely rush to spend what remains of their budget allocations. This contrasts with private business, where under-spending or cost-saving is considered a virtue.

The Commonwealth Government in recent decades has sought "savings" through redundancies and out-sourcing. The strategy has worked poorly. Redundancies were largely voluntary and untargeted. They provided windfall benefits to many approaching retirement or encouraged valued employees to leave. Many of the latter subsequently were either re-hired or taken on as consultants.

Commonwealth Government agencies have more than doubled their spending on contracted labour as the Coalition reduced its workforce. A 2017 audit report showed that cuts in public service jobs coincided with a doubling in spending on consultants. Commonwealth officials have told a parliamentary inquiry that IT contractors cost double the salary of public servants doing the same work, while non-IT labour hire workers can receive up to 50 per cent more.

WA taxpayers over a four year period to 2017 paid out nearly $600 million on voluntary redundancy packages for over 5,000 public servants. Despite the payouts, the size of WA's public service actually increased slightly over that time.

As far as individual spends are concerned, there are innumerable examples of governments paying too much. Renovations at the Prime Minister's official Canberra residence resulted in a $12 million bill to taxpayers (far more than the renovated Lodge is actually worth), while a security upgrade of Parliament House ended up costing a staggering $126 million.

Politicians' travel is rife with rorting. Federal parliamentarians receive about $300 per night to stay in Canberra despite many either owning a Canberra residence or renting a flat. It is also common for politicians to arrange a "work" meeting as a pretext for a holiday, social or campaigning event so that the taxpayer bears what should be a private travel cost.

Finally, there is pork-barrelling. This is a major feature of Government but is essentially a form of corruption. In the recent bi-elections, in an effort to buy votes, commitments by both major parties (for just the five seats) totalled more than $530 million. More generally, billions are regularly spent on infrastructure projects, that can't be justified on cost-benefit grounds.

Despite all the problems with dodgy government spending, the fact remains that very many services provided by government are essential. Minimising waste therefore comes down to limiting government spending to those key areas, and not engaging in activities better done by the private sector.

Most taxes are unavoidable. Some (particularly the educated, the well-off, and those who are self employed) have capacity to reduce their income tax liabilities. Others (the majority), especially ordinary wage and salary earners with commitments, are "sitting ducks" for the Tax Commissioner.