06 February 2015: Price-signals

Medicare[This is the second of two articles I wrote during my stint with the South Coast Register, and put up here with kind permission of the editor.]

In light of recent problems suffered by Tony Abbott and the federal Liberal Party (not to mention the state Liberal Parties in Queensland and Victoria), it’s ironic that senior cabinet ministers are arguing the chief problem is a failure to properly explain their policies. They need a better ‘narrative’ to get the message across.

In other words, Australians are stupid for not getting the message the first time around.

The truth is that Australians understood the message very well indeed, and have on the whole rejected it. Taxing and punishing the poor while the rich get off virtually scot-free is not considered fair or workable.

No one denies that measures need to be taken to control government spending.  But as NSW state member for the South Coast Shelley Hancock said, “The Federal Government has to make tough decisions, but these tough decisions are impacting on the poor.”

While Australians ponder possible changes to Medicare that will penalise them for being sick – what the Government calls a ‘price-signal’ – extraordinarily wealthy mining companies such as Swiss-owned Xstrata reap billions in fuel rebates for the privilege of taking our non-renewable resources such as iron ore. To make matters worse, some of these companies produce their own petroleum products. It’s like the Government giving someone money to buy carrots they already grow in their garden.

Xstrata might argue that since their trucks and diggers and earth movers don’t run on publicly funded roads and highways, the rebate on the fuel excise is only fair. But if that argument is solid, people without children should also deserve a rebate for that portion of their income taxed for schools and universities, and people who don’t suffer illness should be able to renege on the Medicare levy.

This is not the only example of our Government’s largesse towards those who need it least.

The Abbott government won power in part because it promised to abolish the carbon tax. While not the most popular Julia Gillard initiative, it at least had the virtue of punishing polluters for polluting – what the current Government might refer to as a ‘price-signal’. Abbott’s scheme to counter climate change, Direct Action, forces Australians to pay polluters for reducing their carbon emissions: in effect, a new tax. This from a government that swore it would not introduce taxes that “are yet another hit on the cost of living of struggling Australian families”.

There are changes the government could make right now that could save them billions in spending – including cutting the diesel rebate to miners, most of them businesses with a majority of overseas’ shareholders, and using cheaper drugs in the Pharmaceutical Benefits Scheme. Just these two actions could save the budget $3.3 billion a year.

It does seem that the present government’s budget plans involve transferring what little wealth we have to those who have wealth aplenty. In effect, we’re being punished for the privilege of not being rich.

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