John Howard’s policy agenda has killed hopes of smaller government, Andrew Norton writes in the latest issue of Policy magazine. “The Fraser government – often criticised for not advancing a small government agenda – was much more constrained. Unlike Fraser, Howard has enjoyed good economic times. In theory at least, reliance on government should have eased as unemployment dropped and real wages grew.”

In The Australian today, Greg Lindsay – the bloke who bought Fred Hayek to Australia in the 70s – asks what the great economist would have made of all the bandying about of his name between Kevin Rudd and John Howard:

He would have been pretty unimpressed, but he would have been unfailingly polite. On his visit to Australia in 1976, he responded to a hostile critic: “I don’t wish to trade discourtesies with you, sir.”

Lindsay says Hayek “would be horrified” by some of the trends emerging under the Howard Government.

And over at the Sydney Morning Herald, Josh Garnaut reports on just how simple a policy the PM can’t contemplate could be:

All Australians could get by with a top income tax rate of just 20% if they traded in all their tax lurks and concessions.

Yesterday the Treasury forecast that all the loopholes and concessions in the tax system would punch a $50 billion hole in the tax system within three years. Superannuation would account for almost half of that and the cost of capital gains tax discounts would rise to $6 billion.

If all concessions were scrapped, Access Economics says, the Government could afford to squash income tax scales without denting the surplus. “Literally, if you’re just cutting personal income tax rates and you wanted to save 50-odd billion, the top tax rate would become 20%,” said Chris Richardson, a director of Access Economics.

Lurks and concessions, alas, are major Howard Government platforms.

Peter Fray

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