Of all the messages in Treasury head Martin Parkinson’s illuminating speech to economists yesterday — Bernard Keane and Glenn Dyer dissect it in Crikey today — this line may just sum up the current economic debate:

“We have a gap between what the community expects of government and, frankly, what government is able to deliver, but we have another big gap between what the community demands of government and what it’s prepared to pay for.”

Today, the Parliamentary Budget Office blames generous tax cuts over the past decade for driving the budget into what it calls “structural deficit”.

The real deficit, of course, is there for all to see in the recent budget papers — and no one has charted a path to surplus any time soon. Ending the age of entitlement (and it’s come to a screeching halt in this budget) requires a lowering in our expectations of just what government can deliver. Or be prepared to pay for it.

So mind Parkinson’s gap. If someone claims you can pay less tax while getting better services, ask to see the details before you sign up.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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