Thursday, September 24, 2015

Australia's new Treasurer looking for spending cuts rather than tax increases

It's great that Australia's new Treasurer has a realistic approach to the country's financiaol position. Scott Morrison's recognition that the Government has an expenditure problem rather than a revenue problem is refreshing. For far too long, Governments have simply looked at raising taxes to fund their excesses. At Budget time it has been easier to work from the status quo and increase the dollars to be spent – simply to satisfy departmental bureacrats who always want their empires to expand. A better approach is to start with a blank canvass and work out the goals required before determining the actions needed and the related costs. The annual defence budget for example is around $30 billion but there seems to have been little examination surrounding the actual direct threats to Australia. Expenditure appears to have been allocated on the basis of hysteria, the self-interest of our military hierachy and the bizarre notion that we have to fight a costly and unwinnable war in the Middle East at the behest of the US. A rational look at each major expenditure item in Australia's budget is long overdue and will almost certainly result in significant savings which will reduce the need for tax increases.

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