Two separate stories this week that should have been linked by anyone interested in good governance and accountability haven’t. What’s going on?
Yesterday, The Age extracted some frightening figures on taxation out of ABS data.
The tax haul by the Commonwealth has leapt by almost 40% since the GST was introduced… Commonwealth taxation per person leapt 5.6% last financial year, far outweighing growth in disposable income and inflation.
If the entire range of Commonwealth taxes were spread across the population of Australia, each person would have paid a record $11,976 in 2005-06, equivalent to about $33 a day, or $1.40 per hour…
[G]rowth in GST revenue, which is collected by the Commonwealth and transferred to the states, has been at least matched by the booming collections of income and company tax.
Since the GST was introduced on 1 July 2000, Commonwealth tax revenue has risen from $175.6 billion to $245.2 billion, a 39.6% increase.
At the same time, income tax collections have risen 46% to $118.7 billion, while company tax revenue has grown by almost 34% to $56.4 billion.
The revenue surge — the result of strong profits, rising wages and falling unemployment — has come despite repeated efforts to cut income tax.
Commonwealth tax revenue as a proportion of GDP fell only marginally last year to 25.4%, from 25.6% the previous year.
The same day, we learned of Treasury Secretary Ken Henry’s concern at the way his department was ignored in the framing of the $10 billion Murray-Darling water package in January — a package that didn’t go to Cabinet and didn’t get run past Treasury. That raises two immediate questions: where’s the accountability — and will that $10 billion actually offer anything to taxpayers other than the couple of days worth of headlines that followed its release?
This year’s surplus is estimated to be worth up to $15 billion. What’s going to happen with that?
The Howard Government has eschewed any serious tax reform. It wants our money. At the same time, the Government has shunned accountability. Indeed, with kids overboard and the AWB, one could say it’s completely rejected the notion.
Late last year, former diplomat Bruce Haig observed in The Canberra Times:
It is likely that with the passage of time the Howard Government will be regarded as the most cashed up, yet careless and incompetent government since federation…
Such as it is, Howard owes his reputation as a smart political operator to quick responses to political problems. The response and the form it takes are poll-driven. Solutions have been constructed and packaged to allow maximum spin; they are designed for immediate effect.
This is the way policy has been cobbled together for the past 10 years. The media and Opposition have gone along with this flawed method of governance. Long-term vision and wisdom have been marginalised by fear of the poll…
But $10 billion? Throwing this amount of money around without any attention to the checks and balances — while taking more and more from taxpayers.
Surely, as that nice Mr Rudd says, this is bridge too far. Pity he can’t offer us more details.