Ideas@TheCentre – The Centre for Independent Studies

Ideas@TheCentre

Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Ideas scare people

Greg Lindsay

26 June 2015 | Ideas@TheCentre

ideas-150626-01“When did ideas become such a scary concept?” said Peter van Onselen in The Australian this week. Other commentators have said much the same. The context was the ‘leaking’ of parts of the Commonwealth government’s federalism green paper; not a white paper, not legislation, just some ideas for consideration.

It’s clear we are facing manifest problems in this country.  I don’t wish to rehearse the issues once again as we know what they are.  But it does take some bold thinking to find good solutions.  Well we at CIS are not scared of bold thinking and that’s what our great team of researchers do. And then it’s a matter of communicating these ideas and our small team of communication professionals work at that relentlessly and often at hours that would really scare most of us. Just this week for instance, CIS was in the media 539 times, and then we probably missed some.

With the end of financial year just days away, here’s your chance to back a few more scary ideas to help get this country to go boldly into a prosperous future.  Like the great reform period of the ’80s and ’90s that laid the foundations for one the country’s golden periods, we can do it again.

But it is good ideas that will help drive us there and it is good ideas that CIS is, well, good at.

Click here if you would like to support good ideas, and we thank you for your contribution.

Baird's budget bonanza

Robert Carling

26 June 2015 | Ideas@TheCentre

ideas-150626-03The New South Wales 2015-16 budget announced this week demonstrates the O’Farrell/Baird governments have accomplished the budget repair mission that so eludes their federal colleagues.

They have done so through a combination of good management (curbing the growth of recurrent spending) and good luck (much stronger revenue than expected). Recurrent spending growth has been held down to the rate of inflation and population growth. While hardly a picture of austerity, this is more disciplined than the previous government’s approach.

As for the good luck, revenue from real estate turnover this financial year is running at $2 billion a year (almost 40%) above the level expected three years ago — just before the Sydney boom began — and total revenue is $4 billion above. This has enabled the budget to return to an operating surplus.

To its credit, the government is not using its strengthened finances as a platform to ramp up recurrent spending. But neither is it using it to lower taxes and in particular reduce dependence on the volatile and distorting stamp duty on real estate, which is now as big as payroll tax. This reluctance stands in contrast to the South Australian government’s recent bold initiative to phase out stamp duty on all business transactions.

The Baird government’s reluctance to cut taxes is partly due to caution about the durability of strong revenue flows, but also to a deliberate choice to marshal resources from the budget and privatisations to ramp up capital (‘infrastructure’) spending in the years ahead without unduly increasing debt.

In the meantime, rather than taking unilateral action on tax reform, Baird is looking to the Abbott government’s tax and federation white paper processes to generate the state tax reforms that are so badly needed. Time will determine the wisdom of this choice.

Sugar hit

Helen Andrews

26 June 2015 | Ideas@TheCentre

ideas-150626-02The Heart Foundation has called for a 20 percent soft drink tax, citing a new study out of Mexico as evidence that such taxes really work.

Defenders of soft drink taxes are quite the globetrotters, always hopping from country to country in search of a success story. First it was Denmark, then New York City, and now Mexico.

But if they think Mexico is the flagship case that’s finally going to prove them right, they’re mistaken.

To begin with, the new study purporting to show a reduction in soft drink consumption relies on consumer self-reporting.

Of course, people’s own account of what they eat and drink is highly unreliable. Sales data would be far more conclusive.

Secondly, whether people are consuming less soft drink is beside the point if they are simply substituting fruit juice or something equally sugary. We know that this kind of substitution frequently occurs when a specific product is singled out for a special new tax.

It’s very difficult, not to mention insulting, to micromanage the diet choices of grown adults by imposing new taxes on them. A tax on soft drink would not be any more successful in Australia than it was in Denmark-and nothing in this new study of the Mexico experiment convinces me otherwise.