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

A Libertarian Martin Luther King Jr. Day post

In which we travel into interesting waters . . . (for a fairly long trip, so be prepared) Dr. King's 1968 book, Where do we go from here:  chaos or community? , is profound in that it criticizes anti-poverty programs for their piecemeal approach, as John Schlosberg of the Center for a Stateless Society  [C4SS] observes: King noted that the antipoverty programs of the time “proceeded from a premise that poverty is a consequence of multiple evils,” with separate programs each dedicated to individual issues such as education and housing. Though in his view “none of these remedies in itself is unsound,” they “all have a fatal disadvantage” of being “piecemeal,” with their implementation having “fluctuated at the whims of legislative bodies” or been “entangled in bureaucratic stalling.”   The result is that “fragmentary and spasmodic reforms have failed to reach down to the profoundest needs of the poor.” Such single-issue approaches also have “another common failing — ...

Libertarian National Committee Deathwatch Part 1

As the LNC continues to lurch towards collapse, with the latest news of mass layoffs at HQ, I've decided to begin tracking those things leading the national party to irrelevance, even as state and local parties gain power. As news, rumors and rhetoric break out, I shall chronicle them in this ongoing series at Delaware Libertarian. Organizations approaching failure have a number of characteristics. One of the most striking is renunciation of their purpose and effort to reinvent themselves as a "me-too" provider of services in the marketplace. In this, the LNC has been on a collision course with destiny for a while now. Recently, for example, it hired Republican Party web site developer TerraEclipse to redesign the LNC web site . Terra created a web site very similar to those of the clients it brags most about -- far-right Republican conservatives like Tom McClintock and BJ Lawson. A quick look at the web site they built for the LNC is instructive. The tagline on the ...

The disturbing decline of the Delaware blogosphere: a very unfortunate Around the Horn (even if it's not Friday)

I've noticed a change in my own blog-checking habits over the past several weeks, and I don't know if it's just me or the reality of the last month of a divisive political campaign. I automatically used to check out Delawareliberal first and several times a day, because it was where I could find edgy, thought-provoking, and (dare I say it) funny banter going on. These days visit several other spots first, and my visits to DL are both shorter and less engaged. Why? Because the combination of invading neo-con commenters with the stridency of some of the major contributors has led to such pleasant exchanges as a post dedicated to labeling another blogger racist by donviti, whose own sense of provocative humor is generally so far out there that he makes John Belushi doing Samurai bartender on the SNL look positively pro-Asian. Or I can find Delawaredem and jason periodically spewing the idea that anybody who is not a liberal or progressive Democrat is somehow a non-American,...