“My view is you would have to question whether in 30 or 40 years’ time taxes like the GST or company tax will be around.”
“I’ve never seen any subscriber to neo- liberal economics admit the fact, but part of the way in which inequality drives economic progress – in the neo- liberal system – is by making it clear that there are severe consequences for failure. Bankruptcies, dole queues, even people sleeping in the streets; all these are human tragedies, but in the neo- liberal world view, they are also reminders of what happens if you don’t work hard enough.”
The belief that markets are always efficient is a strange one. And, as I said the other day, when governments tell you that something in public ownership – which means that the government is the one in charge of it – could be run just as well by someone else with no loss of service and would still enable its new owners to make a profit at a reasonable rate of return on capital, then that strikes me as an admission of complete incompetence from the government.
Now, it’s tempting to suggest that a government which includes such people as Hockey, Pyne, Joyce, Dutton and Brandis on their front bench may well have a point when they argue that private industry could run things better. But what concerns me when we’re asking to fall for the same line about privatisation yet again, is the simple fact that in many areas privatisation takes away the idea of the particular area being a service, rather than solely a profit making enterprise.
Prisons is an obvious one. Will we ever hear a private prison company lamenting that when governments make them run programs which successfully reduce recidivism, then it’s a serious blow to their profits and they have empty cells which need to be filled? Maybe not in so many words, but you can bet we’ll hear about the need for tougher sentences.
In areas like Australia Post, we have people lamenting that it’s no longer profitable, whereas I always thought the idea of a postal service was exactly that – a service. And I’ve even heard a state MP lament that Public Housing was continually making a loss and something needed to be done about that.
All of which brings me to Joe Hockey’s statement the other day:
“The world is changing remarkably, and whilst you would have easily assumed 10, 15 years ago that, for example, the GST is going to be an enduring tax … with global trade, with the development of internet commerce, with not just the transaction of the sale of goods over the internet but increasingly services, there are going to be more and more goods and services that are provided from offshore under free-trade agreements that is going to miss that net, My view is you would have to question whether in 30 or 40 years’ time taxes like the GST or company tax will be around.”
Now, this may just be another thought bubble from Joe, as opposed to something we actually need to consider. After all, a bubble just needs one prick and it’s gone. However, one has to wonder exactly where his bubble would have taken him had he pursued it. Or rather, why he wasn’t suggesting that this is even more frightening than people living to be 150.
So, “more and more goods and services” will be provided under free-trade agreements which are “going to miss that net”. (Which net? The internet?)
Apart from wondering how exactly I’m going to get many services under a free-trade agreement (How will I get my house cleaned via a free-trade agreement with the USA?), I can’t help wonder why we’re aggressively pursuing these agreements, if they’re going to lead to a break down in the revenue base of the government. After all, the current government already has a revenue problem, as well as a relectuctance to consider new taxes, so surely this is a growing problem. Imagine how much bigger that would be if there’s no company tax. Or GST. How does the government fill that gap? Higher income tax? Gee, I’ll become a company overnight.
Unless, of course, the solution is to pass on all services to the private sector. Health and education will go the way of the energy sector and everything will be private. The governments sole function will be to pass laws that enable people to go about their business without harassment. And by business, I mean literally business, of course.