Skip to main content

Dismantling the Welfare State: Aussie Style

Over at Thoughts on Freedom, the Australian Libertarian Society Blog, there is a current post on school vouchers that starts by rethinking whether or not they should be means tested. I almost did not click the read more button, but then....

But then it took a turn I wasn't expecting; here's the segment where everything changed:

I have traditionally argued that everybody should get an equal voucher, and that the voucher should not be means-tested. I now believe that it would be appropriate to means-test vouchers.

My primary argument against a means-test was that by reducing the amount of the voucher for high-income earners this would increase the effective marginal tax rate (EMTR) faced by a person as they earn more income, and therefore contributes to the “poverty trap”. I still think this is true, but I now think it is outweighed by another issue.

Everybody in Australia is on welfare. There is no such thing as a “self-reliant” Australian and each of us is both taking from and giving to the nanny state. The government gives money to rich people to pay for their health, pay for their education and pay for their childcare costs… while also charging these same people excessively high income taxes as well as a range of other taxes, fees and charges. This has to change.

It is my opinion that we must create a path for people to get away from government support and once again become self-reliant. This is best achieved by offering tax cuts, which are paid for by removing government subsidisies to high-income families.


This should be a reform that gets appeal from across the political spectrum. Free-market advocates get tax cuts and lower government spending. Economists should celebrate lower levels of churning and bureaucratic waste. Social democrats will be happy to note that it involves no cut in support for low-income people.

The real benefit of this idea from my perspective is the long-term dynamic. In the current political environment it seems very unlikely that any politician will simply dismantle the welfare state. And if we continue with the current policies of universal tax and universal welfare (built by Whitlam & Howard) then it doesn’t seem likely that we will ever escape the welfare state.

But by targetting welfare only at low-income people we create a viable mechanism to shrink the welfare state over time.
With continued economic growth, the number of low-income people (in an absolute sense) will decrease and more people will move steadily towards self-reliance. This may not please the hard-left who are committed to big government… but for social democrats who truely care about helping people this will be seen as a good thing.


Almost as interesting as the post itself are the 54 comments that follow.

Check it out.

Comments

Popular posts from this blog

Comment Rescue (?) and child-related gun violence in Delaware

In my post about the idiotic over-reaction to a New Jersey 10-year-old posing with his new squirrel rifle , Dana Garrett left me this response: One waits, apparently in vain, for you to post the annual rates of children who either shoot themselves or someone else with a gun. But then you Libertarians are notoriously ambivalent to and silent about data and facts and would rather talk abstract principles and fear monger (like the government will confiscate your guns). It doesn't require any degree of subtlety to see why you are data and fact adverse. The facts indicate we have a crisis with gun violence and accidents in the USA, and Libertarians offer nothing credible to address it. Lives, even the lives of children, get sacrificed to the fetishism of liberty. That's intellectual cowardice. OK, Dana, let's talk facts. According to the Children's Defense Fund , which is itself only querying the CDCP data base, fewer than 10 children/teens were killed per year in Delaw

With apologies to Hube: dopey WNJ comments of the week

(Well, Hube, at least I'm pulling out Facebook comments and not poaching on your preserve in the Letters.) You will all remember the case this week of the photo of the young man posing with the .22LR squirrel rifle that his Dad got him for his birthday with resulted in Family Services and the local police attempting to search his house.  The story itself is a travesty since neither the father nor the boy had done anything remotely illegal (and check out the picture for how careful the son is being not to have his finger inside the trigger guard when the photo was taken). But the incident is chiefly important for revealing in the Comments Section--within Delaware--the fact that many backers of "common sense gun laws" really do have the elimination of 2nd Amendment rights and eventual outright confiscation of all privately held firearms as their objective: Let's run that by again: Elliot Jacobson says, This instance is not a case of a father bonding with h

The Obligatory Libertarian Tax Day Post

The most disturbing factoid that I learned on Tax Day was that the average American must now spend a full twenty-four hours filling out tax forms. That's three work days. Or, think of it this way: if you had to put in two hours per night after dinner to finish your taxes, that's two weeks (with Sundays off). I saw a talking head economics professor on some Philly TV channel pontificating about how Americans procrastinate. He was laughing. The IRS guy they interviewed actually said, "Tick, tick, tick." You have to wonder if Governor Ruth Ann Minner and her cohorts put in twenty-four hours pondering whether or not to give Kraft Foods $708,000 of our State taxes while demanding that school districts return $8-10 million each?