Tuesday, 12 February 2013

Governments need to prioritise spending commitments

In Step right up to a budget sensation Stephen Koukoulas has written an interesting article highlighting the need for Governments to prioritise spending commitments (as most people do not want to pay more tax):
So many demands for worthy projects, so few people willing to pay for them.

Having spent some time recently working in the Prime Minister’s Office, I got to see the difficulties and inevitable trade-offs involved in making these decisions. The decisions are not difficult because there is much wrong with most ideas, but rather the dilemma is how each initiative will be funded and whether there is another item on the agenda that has greater importance. Priorities, in other words.

Questions like, do we spend a few billion dollars on a fighter jets for the air force now or do we spend a few billion dollars on education? Should we raise the tax free threshold to boost workforce participation or spend money on private health insurance subsidies for those earning more than $150,000 a year?

Almost always, you can’t have both – or if you do, the funding offset takes money from someone or somewhere else in the budget. Much of the commentary about government spending, cuts and taxation cherry picks at only one side of this dilemma.

No comments:

Post a Comment