Liberal Democrats call for reform and privatisation
Issued 16 August 2010
The Liberal Democrats call on whichever party wins the election to commit to serious reform of the government sector, including privatisation.
Global consulting firm McKinsey and Co has challenged governments to improve efficiency by as much as 15%, a target they believe could be easily achieved. McKinsey states that government sector productivity is significantly less than the private sector, with the taxpayer picking up the tab for this inefficiency.
“15% of government spending at all levels equates to around $63 billion dollars per year. This is $63 billion that doesn’t need to be taxed from productive firms and individuals in Australia,” said Mark Walmsley, WA senate candidate.
“Consider that $63 billion approximates the total company tax collection. It is also around half of the total income tax take. So we could either cut company tax to zero or reduce income taxes by 50%. Either would have a dramatic impact on productivity and global competitiveness.”
The Liberal Democrats have a suite of policies aimed at reducing the size of the government sector, from ending energy subsidies to reforming welfare under our flat tax proposa,l and privatising the ABC.
“I hope voters understand just how much $63 billion is, and therefore the imperative for government to reduce its drag on the economy. We again call on the major parties to adopt our policies and undertake major government sector reform,” said Mr Walmsley.
One of the major causes of government sector inefficiency is management. Management Matters in Australia, the government’s own report on productivity, shows that on a scale of 1 to 5, the management competence of the Australian government sector was 2.61, behind private companies at 2.86, Australian multinational firms at 3.01, and US global leaders at 3.32.
“To put it in perspective, management in the Australian government sector was less competent than the private sectors of China, Greece, India, Brazil, Ireland, Portugal, Poland, and Italy. It is easy to see where the $63 billion dollars of waste is,” Mr Walmsley said.
“This will be no surprise to anyone familiar with how competitive markets work. Markets are an innovation race between companies, with consumers reaping the rewards. In contrast, the government sector is mainly monopolies, including unions having a monopoly on labour. There is no incentive for innovation.
“Government’s are quick to smash private monopolies as anti-competitive, yet totally ignore all the government monopolies in health, education, defence and more. When taxpayers and consumers are given real choice, managers are forced to provide greater value. Leave government sector monopolies in place and waste abounds.”
“Any politician campaigning for new taxes, new spending or new regulations is stealing from your future living standards to buy your vote now. Don’t fall for it.
“The Liberal Democrats will not be announcing new ‘spending measures’. Instead we announce that government should take less of your money, and you should be free to spend it as you see fit.
“A critical first step to lowering taxes is for government to privatise or reform itself,” Mr Walmsley concluded.
Obligatory :
You need some new material David.
Perhaps some of our unemployed might be able to get hired by employers who can grow their businesses thanks to said tax relief?
Perhaps some of our “working families” may be able to afford to pay their mortgages, energy bills and shopping bills more easily if they weren’t getting slugged almost 40% of their salaries in income tax?
What is so wrong with that?
perhaps our infrastructure wouldn’t fucked to hell if we upped a little tax and spent the money on fixing it, rather than encouraging capitalism… (how does that even fit in capitalist ideology?)
perhaps ‘working families’ wouldn’t be strugling if they wern’t slaves to the fatcats who run the mainstreams…
Hey Ygfi,
Have you ever wondered why very few people actually bother to reply to your often indecipherable posts on here? Because your extreme leftist rants are nothing sort of naive, vacuous, uneducated nonsense. If you bothered to even attempt to spell correctly, or construct a full sentence, or maybe actually formulate some kind of argument based on something above what an angry Che Guevara t-shirt wearing 14 year old would scribble on the back of a public toilet door, then maybe we could indulge in some constructive discussion.
Until then, stop embarrassing yourself.
sdh: The point of that image is basically “The LDP need some new material”. When they do, I’m sure Dave will update his material as well.
Of all the options available to provide stimulus to the economy, tax cuts have been proven to be the most ineffective at providing a positive return on investment.
Are you honestly going to try and rebrand voodoo economics and bring it back to the table after all this time? Or are you trying to bring back the trickle-down theory which demonstrably created no trickle-down?
At least be honest and admit that tax cuts are a populist policy, that while enticing to many, only benefit a few.
They display a stunningly myopic vision for the future.
Oh boy. David, you come across as an educated guy, but it is sad to hear you regurgitate this nonsense from the Keynesian playbook. I think I heard Stiglitz quote something similar on the radio last week… are you quoting him? For 80 years this theory has failed again and again, yet the spruikers remain, their legitimacy being maintained only by the state whose interest it is to hope the public continues to believe this failing theory.
If you want short term stimulation, by all means encourage wasteful government spending. Perhaps pay a group of blokes to go and dig ditches, and another group to fill those ditches in (Keynes actually suggested this at one point). GDP will go up, sure, and the economy will be ‘stimulated’.
What many people fail to consider is the opportunity cost in diverting money through government programs. It crowds out genuine productive investment that the private sector can provide. Investment strategies that are carefully chosen by the enterprenuer that ensure viability and a long term prospect for growth (otherwise, he will lose his money). The government does not apply the same critical oversight when it is spending other people’s money.
Most importantly, there is only a finite pool of savings that everyone is competing for. Provided the tax cuts are inacted together with an equal reduction in government spending, the increased savings will be available to productive investment opportunities. No, it won’t always provide an instant increase to GDP like wasteful government initiatives can, but it will promote long term private sector growth: that is, productive investment. Long term employment opportunities arise and the business provides a good or service that meet consumer’s desires. Everyone benefits.
Populist policy? Sure it is. Other populist policy include lowering crime, and reducing unemployment. Contraversial, huh? People want to take home with them more of the money they actually earnt.
I don’t listen to Stiglitz, but feel free to beat him up whenever you like.
So, just to clarify, for my own and everyone else’s benefit; you are advocating the trickle-down theory. (?)
The main tenet of which is that by lowering taxes on the titans of industry, jobs will be created by the money saved on their not paying taxes.
Is that about right?
Speaking about reducing crime being a populist theory, how do we increase police presence and overall crime-fightability if we are simultaneously cutting taxes?
Is it a case of those being wealthy enough to hire their own private forces, and those not wealthy enough won’t have anything worth stealing anyway?
Was this ‘another’ David?
> As much as I’m a huge fan of Stiglitz, and Krugman for that matter,
(from http://bothkindsofpolitics.org/?p=2116#comments)
I’m a supporter of a reduction in government spending. This should be then lead to lowering taxes upon all sectors of the economy, not just the big guys.
Obviously, there is a strong corellation between violent crime and the level of unemployment, and a more prosperous society wouldn’t require to an ever growing police force. Moreover, if we repealled some of our draconian drug laws (and other nonsense victimless crimes), it would free up an enormous amount of police resources who could then spend their time on real criminals.
“Lowering crime” and “reducing unemployment” aren’t policies, they’re outcomes.
And given that some recent policies supposed to reduce crime have done so by attacking civil liberties and natural law, I think your implication that there’s nothing wrong with “lowering crime” is at best disingenuous – even if you do struggle on the differentiation between policy and outcome.
Ahh yes :
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http://t2.gstatic.com/images?q=tbn:Rvc6UoLa9pAJ7M:http://i4.photobucket.com/albums/y114/biglu323/quote-mining-fundie-quote-mining-fa.jpg&t=1/img
The full quote – “As much as I’m a huge fan of Stiglitz, and Krugman for that matter, they both rely too heavily on their thorough understanding of the economic systems in place around the world.” – displays a clearly facetious tone in relation to this article. You could replace the names Stiglitz and Krugman with any other pre-eminent economists and it would still work. Hell, you could replace the names and the systems being spoken about and use it as a default template and it would still work.
How incredibly out of character for a libertarian to pick and choose his arguments like that.
We actually agree on a great many things, you and I. Particularly drug laws, gay rights, voluntary euthanasia and no doubt many many other topics. I just find your “the freer the market, the freer the people” ideology ridiculous in the extreme, particularly since an unrestrained and unregulated free market just caused the greatest economic disaster since the 1930s.
But you didn’t answer my question on clarification which was, are you advocating the trickle-down theory?
“particularly since an unrestrained and unregulated free market just caused the greatest economic disaster since the 1930s.”
Funny you should say that. Pre-GFC, I imagined we would have shared near-identical views on economics. I was highly suspicious of the free market and generally followed the ideas on economics I was taught at school years earlier (i.e. Keynesianism). Although, to be honest, I wasn’t really interested in it all that much.
When the shit hit the fan in September 2008, my attention to economics returned tenfold. I didn’t really understand financial markets, or monetary policy, or central banking back then, but I started learning at a fanatic rate. I particularly paid attention to to the few economists who had been jumping up and down for years trying to warn the world of the looming crisis: maybe their underlying views had some merit. Pre-2008 they tended to be laughed at whenever appearing on television as experts, but now it was the rest of the financial and economic world that were looking like the fools.
My journey of new-found learning bought me to the Austrian school of economics and a new perspective on free market economics and classical liberalism. I started reading Mises, Hayek, Rothbard, and still continue to do so. In doing so, I developed a much clearer understanding of economics and recognised that 75% of the stuff I was taught at high school, as well as the nonsense spruiked to us by the media and our major political parties, was highly contentious.
Please take your time to read through this article – it does a much better job than I could of explaining why free markets are not to blame for the GFC:
http://mises.org/daily/3165
[You can head to http://mises.org yourself and check out some other articles if you like. They have thousands of books online for free, hundreds of hours of videos of lectures, talks, as well as hundreds of audiobooks (they are very anti-IP, as we all should be).]
There is nothing more humble than recognising our own indoctrinated views are misplaced. I came to that realisation two years ago. Perhaps as I learn more, I will learn to reject some ideas I now hold true: but for me this change was nothing less than life changing, and it will require some kind of dramatic paradigm shift in my thinking for me to every consider any significant alternative.
Liberty above all.
I’ll be sure to have a read through that site.
Can you clarify for me that you are advocating the trickle-down theory? I’d stop asking about it, only it appears that you haven’t actually answered that question yet.
Alright, I’ve read the article.
It’s chocked so full of shit I don’t even know where to start debunking it.
I know I give the LDP a lot of shit for being Randian, but linking to a former student of Ayn Rand as a treatise on why it actually wasn’t mass deregulation’s fault that we just went through a global economic meltdown is pretty weak-sauce.
Article aside, are you advocating the trickle-down economic theory?
Dave, sdh said the repeal of the Glass Steagall Act was a contributing factor to the GFC. Consistency isn’t his strong suit.
while my spelling can be an issue at times, i don’t think it’s worth the effort, at apst 1am, to go proofreading my statements, that just seems like a waste of time, and a deflection… oh, and here i was thinking people ignored my leftist statements cause they’ve been told all their life that lefties are loonies…
but i think my main point would have to be, that facts and ideas don’t care about spelling and grammer.
David- I don’t care who was who’s student. I didn’t even know. I’m not a Randian. I sent you that article for the content, and don’t care for ad hominem attacks. My point is that we never had a free market to begin with (and not even anything near it), so blaming the GFC on it doesn’t make sense. But forget it. Believe what ever you think right now. Don’t ever change your mind, ever: you’re ego is much too precious. Dismiss alternative perspectives. Debunk at all costs! Nice one.
As far as your obsession on this “trickle-down” idea- I told you what I think: I’m more concerned about the government spending than who gets taxed more, or less. Reduce the tax on business owners, sure. I also support the LDP’s idea of a $30k tax free threshold: which abolishes tax it on low income earners. Does that make me trickle-up? Lets call it trickle-everywhere, shall we?
Ygfi- it was lame me having a go at your spelling. But fuck, is it that hard to try and do the sentence thing? And not all leftists are loonies. At least, I wasn’t when I was one.
Chris, it certainly did: but only because of the FDIC guarantee on the deposits and mortgages. The implication is that they would cover the losses _if_ it went bad. And it did. Hence the huge socialisation of the losses (and of course it was going to happy _after the fact_ (in answer to that older post from the other week))
What ad hominem attack? I haven’t attacked you personally throughout this discussion at all. I’ve even acknowledged that we probably have more we agree on than disagree on.
I called the article full of shit because it was, that’s not a personal attack on you or the author. I don’t use “Randian” as an epithet like others may use “socialist”. They’re both just adjectives to me.
The idea that I don’t reassess my positions on things is you projecting an assumption. You don’t know my voting history (which would surprise most people that know me now), you don’t know anything about me, bar what I write here and/or what you can google.
I asked you for clarification on trickle-down theory because that appeared to be what you were advocating, as you mentioned that reducing taxes on those in a position to offer employment would free up more funds for job creation, and I had to ask you several times before you acknowledged the question.
A question I’d love to know your thoughts about, is where do you think the government is wasting the most money at the moment?
I’m still waiting for your grand debunking David. You can start by explaining to me how five years of artificially low interest rates set based on the decision of a handful of men in any way resembles a ‘free’ market. Moreover, how government guarantees on deposits and mortgages (upon which the banksters were gambling) reflect an ‘unrestrained’ market. And perhaps how government regulation put in place during the 1990s to encourage home ownership to low income earners represents ‘deregulation’.
I couldn’t find an amusing graphic to include in my post to mock your last response. Does that make my point less valid?
So before I post why I think the article you linked to is full of shit, let’s establish a few things that we seem to have agreed on.
1) You don’t know what an ad hominem attack is. (As evidenced by my explanation of it to you, and your silence afterwards. Surely if I had been wrong you would have pointed that out to me.)
2) You advocate for trickle-down theory except when directly asked about it.
3) You have now moved the discussion from tax cuts being the least positively effective way of stimulating the economy, to trying to establish the Randian economic method as the most effective.
and
4) You think the images I post are amusing. (And to answer your question, no, it doesn’t make your post any less valid, but it does show an alarming lack of imagination.)
It’s really only the last one that’s important.
This is US-based, but I think it applies here :
Which one do you most closely identify with anyway?
far left, 2nd down.
Forget it David. I don’t know why I even bothered to continue the conversation this far. You posting nonsense like that only highlights your own lack of understanding of libertarianism. From what I can gather, it is at about the same level of your understanding of economics, too. But don’t let anyone tell you otherwise, ok? Just change the subject, or use the word Randian thinking you knew what it meant, or jump on google image search.
Declare victory and leave – epic!
wring order dave, he left, then declared victory… so, was it a victory for the left? (see what i did there <_< )