Family tax benefits who?

To better understand whether your $10,000 was well spent by Mr Costello, think about the times in recent years when you’ve had to pay out of your own pocket for things you thought would be covered by taxes.

Effectively, many of us are paying for things three times over - once when we pay tax, again when we pay health insurance premiums or school fees, and a third time when we still have to cough up to pay for the things the insurer or the school doesn't cover.

But isn't paying for things once enough? Surely $10,000 a year for every man, woman and child can purchase a public education system to which we're happy to send our children, and a public health system that can keep us in reasonable fettle?

Well, they probably could, but to understand why they don’t, we need to take a closer look at that largest of budget items - the $4,205 of your windfall spent on welfare and social security:
 

Table 2. Calculated from 2006-7 Budget Outcomes papers showing $92 billion spent on welfare and social security.

From the above table, you can see that all the usual targets for welfare cuts (the dole, Indigenous programs, student allowances) are already cut to the bone - there simply isn’t much there to be saved.

So unless you’re willing to kick your grandmother, some war veterans or disabled people out on the streets, there’s really only one big-ticket item left. It’s that one-quarter of payments that face no asset-test - Family Tax Benefits, Child Care and Baby Bonuses. Considering that families in stately homes on annual incomes of over $100,000 can receive Family Tax Benefits, and low-income families have a separate Parenting Payment to help them out, the label “middle-class welfare” is apt. The total amount soaked up is $21 billion.

That $21 billion rides a wasteful merry-go-round out of and back into the pockets of middle-class families who don't need a handout in the first place, but could certainly be paying less tax.

That $21 billion is as much as Medicare and the PBS put together. If it were spent on healthcare instead of consumption, you’d never need to pay health insurance again.

That $21 billion is part of the reason why you’ve been paying more and more tax, and getting fewer and fewer services.

Consider these two alternative proposals:

1. leave the $21 billion in taxpayers’ pockets in the first place. They’ll need it for all the health insurance premiums and school fees of the user-pays system;
2. keep taxing the $21 billion, but reallocate the expenditure to capital works and essential services, so that Australians can enjoy the high standard of infrastructure, health and public education they deserve.

Surely these are both better options for taxpayers than the status quo?