Tax, Spending and the Economy

It was Benjamin Franklin who said, ‘In this world nothing is certain but death and taxes.’ Will Rogers responded: ‘Yes, and the only difference between death and taxes is that death does not get any worse every time parliament sits.’

Income tax, company tax, payroll tax, petrol tax, GST, the Medicare levy, the emergency services levy, natural resources management levy, the so-called “Save the River Murray levy” … on it goes. Governments, State and Federal, hit us at every turn. The capacity of politicians and public servants to spend our taxes knows no bounds.

We wouldn’t mind if our taxes went on improving roads, hospitals, schools, Aboriginal communities, disability services, homelessness and law and order, but it doesn’t. Give another billion dollars to any of these departments and it is immediately gobbled up by building the bureaucracy – new offices, more staff, higher pay, and more cars.

But not better services in the wards, in the classrooms or on remote communities.

Conservative Australians believes in small government with minimal interference in family and community life. As a general rule, we oppose new tax measures and new spending measures. We aim to reduce the size of government so that money is in the pockets of families, communities and business to spend their own money – not Governments spending it on their pet projects.

If the Australian tax system is to offer incentives to be productive, to expand activities, to shift from welfare to work, to pay tax and invest in the future then it must be simple, flat and, in the eyes of tax payers, a fair system.

Conservative Australians supports a flat tax system applying the same rate of taxation across the community and without discrimination between businesses, individuals or differing income levels. The more variations in tax policy that apply, the more practices and mechanisms are designed to avoid tax – working for cash to ‘escape the tax man’ through convoluted trust arrangements to multinational corporations resorting to tax havens to minimize local tax liability.

We need clear Federal tax and legal responsibilities. Those who spend the money, should raise the money. Far too often, Federal, State and Local Governments interfere in each other’s cash-flows and jurisdictions for short-term political gain. Federal rebates designed to offset the punitive impact of State or Local Government taxation should cease. The same level of Government that imposes a tax, levy or charge ought also to fund the exemptions to the same.

To that end, a review of the taxation powers of the Commonwealth, States, Territories and local government is welcome. Responsibility for spending must be allocated and kept at one level of government, without duplication. Health and education, for instance, should only be State & Territory responsibilities, and no Federal or local government spending should occur in that era. Accordingly, the States’ power to raise taxes to pay for those costs must be adjusted accordingly, and proportionately reduced or raised at the other levels of Government.

Conservative Australians supports the Federation, and having strong States and Territories. The Commonwealth has expanded by too much – both in the taxation revenue it demands, and the amount that it spends.

Conservative Australians rejects centralised power and supports decentralised power and decision making. The Federation of States and Territories provides the competitive and innovative forces necessary for a healthy democracy and economy.

All levels of government should carry adequate insurance to meet the cost of natural disasters or unforeseen events. It is unacceptable for one State, Territory or other level of government to seek aid from the Commonwealth or taxpayers due to its failure to adequately insure against risk. Governments also have a duty of care in the discharge of their public duties, and should carry adequate insurance against the risk of civil litigation or class actions.

Conservative Australians supports the existence of autonomous small, local Councils, particularly in regional areas. We do not support Commonwealth interference in local government via direct funding, bypassing states.

Local Governments are a State or Territory legislated entity of the State or Territory that created them.

For that reason, Conservative Australians does not support constitutional recognition of local government, as these are or should be recognised at State level, the proper pathway for funding support to local councils. Ideally, Councils should not interfere in areas of state or federal legislative responsibility, such as health and education, and should have responsibility of raising the revenue they need to meet their legislative responsibilities without state or federal support.

Budgets to be brought back into surplus

Australia cannot continue to run deficit budgets and accrue inter-generational debt. We have a moral obligation to our children and their children to repay our now growing to $1 Trillion in debts generated since 2008 and the recent COVID19 needs.

Conservative Australians will reduce the spending and inefficiency of government to ensure that we repay existing debt. We will also go beyond ‘Projects for Mates’ undertaken by both sides of the political divide and ensure that the best and most economic contributing and jobs producing projects get up ASAP.

We support bringing back a debt limit so that future Federal governments will require the permission of Parliament before incurring more debt.

Limited, more efficient, effective and accountable government

We believe in the constitutional separation of powers between the legislature, the executive and the judiciary.

We also recognise and support the division of responsibility between the Commonwealth and the States.

Governments should spend taxpayer dollars wisely to minimise the size, scope and waste associated with government.

We commit to methodically reducing Federal government spending to less than 20% of GDP to pay off debt and reduce taxation.

By encouraging personal responsibility, mutual obligation and community spirit, we will reduce the underlying pressures on our burgeoning welfare budget.

We support zero-based budgeting across the forward estimates. This entails having every expense justified on a rolling basis every four years, based on demonstrable needs, costs and outcomes. To achieve this, we will undertake a line-by-line assessment of all government spending based on two guiding principles:

  1. If we were starting afresh, would we do this again?
  2. If so, are there any better and more efficient ways to do it?

To facilitate this approach, we propose sunset clauses for all legislated government programs, requiring them to be resubmitted to Parliament for appraisal and re-approval every four years.

Lower, simpler, fairer taxes and deregulation

Individuals are far better placed to decide how best to spend their own money than governments. Our economy will be far stronger and more responsive to changes in preferences and circumstances when taxation and regulation is as low and as efficient as possible.

We will streamline the taxation system and reduce the number of personal tax brackets. To support this, we will rationalise the number of tax offsets, rebates and deductions, as well as standardise them and limit accessibility.

We will restore confidence and certainty in the superannuation system to ensure those who have worked hard to achieve financial self-sufficiency will not be disadvantaged by government decisions.

We will remove the tax-disparity between single income and dual income households with the same income levels.

We will streamline regulation by adopting a one-in, two-out approach to remove the red and green tape strangling business, investment and job creation. We support having an annual Regulation Repeal Day.

We support the principle of ‘royalties for regions’ programs to improve regional roads and other infrastructure.

Benefits of tax reform

By reducing the number of special tax categories, concessions and deductions, the tax law can be simplified and dead-weight accounting and legal costs can fall.

The extra revenue raised from such streamlining can be used to lower tax rates for all. By reducing distortions from taxes imposed, and freeing up resources for more productive uses, we can strengthen our economy.