According to the market research company Roy Morgan, there are almost 2.8 million Australians who either want a job or would like more paid work.

Those 2.8 million people are all missing out on a better standard of living, and those who are unemployed are also missing out on the well-known benefits of having a job: self-esteem, purpose and support.

This is at a time of historically low unemployment. Employers are desperate for workers and many businesses have restricted their activities due to a lack of staff.

Two of the main contributors to this high number are the minimum wage and pension rules. Both are government policies and neither side of politics has any interest in changing them.

The minimum wage issue strikes hardest at those with low employment skills. People just out of school, just out of jail, low literacy, sole parents and refugees, for example. No matter how poor their resume or how willing they are to accept a job, they can only be employed if they are paid the minimum wage, currently $21.38 per hour (but considerably higher for irregular hours and casual positions).

It is against the law to offer them a job that pays less than the minimum wage, even if it is well above the $5 to $10 an hour they receive on welfare.  Yet paying them the minimum wage plus various on-costs makes no economic sense for most employers.

Before he entered Parliament and became a Minister in the Labor government, Dr Andrew Leigh was a professor specialising in labour economics. He found that reducing the minimum wage in Western Australia by ten percent would increase employment by around three percent within three months. 

In a separate study, Dr Leigh found that most people on the minimum wage are in middle income households.  By contrast, low-income households are typically in that position due to unemployment. A reduction in the minimum wage, by creating employment, would help them the most.

Other studies have shown that most people on low wages move on to higher wages after about a year.  In other words, low wage jobs are an opportunity for people to start at a bottom rung and work up. But with the minimum wage so high, many cannot even reach the bottom rung and begin to climb.

It is a peculiarly Australian problem: Australia’s minimum wage is now the second highest in the world. Australians start paying income tax once their annual income exceeds $18,200, but they are not allowed to get a full-time job unless it pays more than $39,000 a year. 

Another major barrier to both getting a job and working longer hours is the limit on earnings of those receiving age and disability support pensions or carer payments. The Institute of Public Affairs has recently done some research on this.

It found that whereas only 3 per cent of pensioners work in Australia, 25 per cent work in New Zealand. The reason for the difference is that in New Zealand, all income including the pension is taxed at normal income tax rates. There is no reduction in the pension.

In Australia, pensioners are only permitted to earn up to $190 a fortnight ($336 for couples) before their pensions are reduced by 50 cents for every dollar earned above that.  A pensioner with a job would not only pay income tax on their wages, but also lose a major chunk of their pension.

The effective tax rate can easily reach two-thirds.
Not surprisingly, most consider it not worth the effort.

And yet, pensioners who work would not only top up their income but also remain engaged in the community and pay tax on their wages.

At a time when the country is desperate for workers, this is a genuine tragedy. Instead of making it easier for those 2.8 million Australians to fill the vacancies, the government is opening the immigration floodgates. For some people, low incomes are compulsory.

We’re all familiar with the dictum, “In this world nothing is certain but death and taxes.” But Will Rogers also astutely observed, “Yes, and the only difference between death and taxes is that death doesn’t get worse every time parliament sits!”

The first thing to say about taxation is that we need less of it, not more.

Last week’s budget made it clear the government does not have a revenue problem – soaring iron ore, coal and natural gas prices are set to add $58 billion to tax revenue over the next four years. However, it does have a spending problem, with deficits predicted from here to eternity.

To address this, economists, businesspeople and, of course, State treasurers, kicked off the debate by proposing to raise and/or broaden the GST. Economic considerations aside, why the Commonwealth would even consider such a proposal is laughable. The Federal Government would bear all the pain and the States would enjoy all the gain – which they would no doubt spend as extravagantly as they do with existing GST proceeds.

Aside from the political reason, there is the simple economic reason:  a lift in the GST rate, or a base-broadening change, would simply give State governments more of our money.

Treasury officials, economists and business people will of course respond by saying they are not looking to raise more revenue, they just want to raise more from the GST and then offset that by reducing other taxes. But as occurred when the GST was originally introduced, by the time you have compensated everybody who says they will be worse off, you are left with only a portion of what the GST increase will raise. The result, as it was in 2001, would be a higher level of expenditure, a higher level of taxation, and no reduction in other taxes. This has been the experience with consumption taxes around the world.

It goes without saying that attempts at tax reform in Australia in the past have been disappointing.  The introduction of the Goods and Services Tax in 2000 resulted in a big increase in tax revenue – it will generate $80bn this year – a sum that was beyond the wildest imagination of even its most enthusiastic proponents back then. Getting the States to abolish many of their taxes, as they had promised to do as part of the GST introduction package, has, to say the very least, been problematic.  

One of the main problems is the fact that 70% of local, State and Federal taxes are spent on salaries.  It’s no wonder we haven’t seen a new reservoir built in 50 years.  And of that 70%, less than half is spent on essential services like nurses, teachers and police. As we know, whenever cuts in government spending are called for, politicians respond with “well how many nurses, teachers and police would you like us to cut?” They rarely ask how many media advisers you would like them to cut.

Presently, the Commonwealth raises around 80% of all taxation revenue in Australia, leaving the States with just 20% to fund their responsibilities. That 20% is less than half the revenue needed to fund State Government services. The balance comes from Commonwealth grants, many of which have conditions attached.

Fairly obviously, federal fiscal arrangements are dysfunctional.

As for tax law, the sheer quantity and ever-changing content of tax legislation has undermined its credibility.

One leading tax barrister described Australia’s tax laws as ‘unintelligible’.

It is practically impossible to know what the law is and what it means., and the High Court now seldom grants leave to appeal in federal tax cases, virtually giving up hope of ensuring the tax system remains subject to legal principles and normal adjudication methods.

Before the First Uniform Tax Case in 1942 the legislation occupied just 81 pages. It is now over 10,000 pages, (20,000 if you include fringe benefits tax, capital gains tax and superannuation provisions). If that’s not a recipe for dysfunction, it’s hard to know what is.

Recently, the creator of Dilbert, Scott Adams, became the subject of a furore where he encouraged people to not associate with black people on the basis of a poll run by Rasmussen Reports.

Dilbert creator Scott Adams says that Rasmussen poll showing high level of Black racial animosity against Whites is the first opinion poll that has ever caused him to change his behavior

Importantly, Mr. Adams said that this was the “first” poll that had caused him to change his behaviour.

The irony is, what was reported about the poll was entirely different to the responses given in it. The poll surveyed a thousand people across the United States of America. The pop-up in Mr. Adam’s podcast said “Rasmussen Reports BLACK AMERICANS ONLY: “It’s okay to be white” 53% agree, 26% disagree, 21% not sure.”

The pop-up was materially misleading. Rasmussen’s own data is below:

From this data you can see that, for a start, Black Americans were not the only people surveyed. In fact, Black Americans only made up 13% of the thousand people surveyed, proportionate to the American population overall. Further, the actual question that was asked was not whether it was “OK to be white”. The actual question asked was:

Do you agree or disagree with this statement: “It’s OK to be white”.

Now as someone trained in statistics, I can tell you that this question is terribly phrased because it gives rise to ambiguity. The ambiguity is that there is a considerable difference between being asked whether it is “OK” to go around saying “It’s OK to be white” versus whether people are whatever “OK” means if they have white skin.

Where does the phrase “It’s OK to be white” come from?

Like so many divisive things, it originated from a 4Chan troll and was designed to generate dissent and anxiety. Later, it was adopted by neo-Nazi groups as a response to “Black Lives Matter”.

So if I were asked that question, I’d answer ‘No’ because I would not be happy to be associated with neo-Nazis. I will not say “It’s ok to be white”, not because I don’t like white people or are prejudiced against people due to their ancestry or the level of melanin in their skin, but because I am conscious of the trolling origin of the phrase.

When statisticians craft surveys, it is done for one of two reasons:

• either we are trying to acquire data to understand the world around us; or
• we are trying to use the survey to “manufacture consent” as Noam Chomsky would say, that is, using the questions in the surveys to attempt to elicit a response to drive a narrative.

This particular Rasmussen Survey was poorly designed and because it bothered to ask the question in such ambiguous terms, it appears to have been intended to manufacture a narrative to the effect that Black Americans do not like White Americans. Ironically, it failed obtain the data to support that narrative.

How to interpret the Rasmussen statistics

You can see from the pop-up in Mr. Adam’s podcast combined with the lazy reporting of the survey that people were of the view that a thousand Black Americans were asked whether “it’s OK to be white”, but this is not the situation.

Looking at Table 1 (above), it is evident that only 13% were black of the thousand people surveyed.

Moreover, of those 13%, or 130 people, only 26% of them were of the view that it was NOT OK to say “it’s OK to be white” because 18% on the 5-point Likert scale opted for “strongly disagree” and 8% opted for “somewhat disagree” (totalling 26%).

So how many people does that amount to?

It turns-out around 34 people out of those 130 felt that the phrase was unacceptable.

It is statistically invalid to extrapolate from a mere 34 people to suggest that, across America, 26% of all black people think it is “not OK to be white” because even the sample size of 130 people is too low for the size of the population to draw that qualitative conclusion.

Another problem with the survey was that many people reading it incorrectly conflated the “not sure” response with suggesting that it was “not OK to be white” to reach “we’re not sure that it is OK to be white”.

In statistics, a “not sure” or “don’t know” response suggests that the respondent:

• doesn’t have an opinion on the matter either way;
• doesn’t understand the question; or
• finds the question ambiguous.

There’s no reason to conflate a “not sure” with the negative any more than there is to conflate it with the positive. The respondents answering “not sure” can’t be conflated with other groups. Interestingly, the “not sure” answer tracks well across all races, so it might suggest that the ambiguity of the question made them unsure about answering that question positively or negatively.

Survey Biases

So why would I not consider the survey result to suggest that black people think it is not OK to be white? Rasmussen did not say how it conducted the survey, whether by phone or online, so I will cover both options.

I have a problem with online and phone surveys generally because of how they get people to answer the questions. Firstly, in order to get someone to answer political surveys such as this, you need people to decide that they want to respond.

If the survey is online, then you are getting people who feel strongly enough about the survey to go and log in and participate.

If they are cold-called by telephone, then you need them to answer the phone and then listen to the spiel, hand over their demographics and then decide to answer the survey.

If they are from a set of people who have pre-agreed to answer surveys, then it is usually because they have been promised some form of benefit in response for answering, such as to go into a draw for a cruise. We don’t know what kind of survey it was because Rasmussen has not revealed that information to the public.

In statistics, we have a concept called “response bias”. The only people who tend to respond to surveys have strong feelings about the questions being asked one way or another.

If it were people cold-calling in a telephone survey, we aren’t told how many people refused to participate.

If it were a “log in here and tell us what you think” survey, then there’s always a question as to who is likely to respond and whether they are “genuine” respondents.

If it were a pre-agreed pool of people who were responding, then this might explain the relatively large number of respondents who answered “not sure”.

Genuine responses

How do readers know that the people who are responding that they are black (or white, or other) are from the background that they say they are? We don’t have access to the demographic questions or the means by which Rasmussen says that they were aware of the racial identity of the respondents.

Clearly a number of other questions were asked to ascertain demographics, but how, in fact, does Rasmussen know that these demographics are accurate?

Again, we have no data on that.

When newspapers do polls online, a real problem is that occasionally someone will decide that they wish to “stack” the survey and will write a script and respond multiple times. We don’t have any data as to how Rasmussen tries to deal with such issues for online surveys.

One other interesting factor is that we don’t know the educational attainment of the people responding. Generally, we test for educational level because we’d expect that there could be differences of attitude depending on the level of education that a respondent has attained.

It’s an area of the survey demographics that hasn’t been asked but which we would usually test to see whether it was an important variable because the received wisdom is that the higher the level of educational attainment, the lower the level of prejudice.

Whether this is true in any given set of people varies but, because it has been a variable in other cases, it is usually included as a variable to see whether there’s a “cause” other than blind prejudice.

So should the survey have persuaded any person that black people are of the opinion that it is not ok to be white?

If you are of the view that the opinion of 34 people across all of the US can represent the 47 million black people across the US, then you might be persuaded. Whereas 130 out of the thousand people represents the 13% of the US population that is black, it is a very small, self-selected population from which to draw ANY valid conclusion.

This is why, if a student had presented this survey to me as an assignment,
I would have given it a fail grade.

As an attempt to set white people against black people by “rage farming”, a new “word” apparently added to the dictionary in the USA, I fear that it has worked all too well.

One of the best ways to make a set of people hate each other is to say “those people over there are out to hurt you” or “those people disapprove of you or your lifestyle”.

Despite the fact that over 74% weren’t happy to disagree with the statement “it’s ok to be white”, the theme of the news reports arising out of it was that black people don’t think it’s OK to be white.

You should not trust news reports and podcasts that blindly accept statistics.

Sometimes, the purpose of those statistics is to manipulate you. This is why you should check the statistics behind any survey that has “inflammatory” conclusions or questions.

Prior to 2020 I was an extremely proud Victorian. But what I’ve come to realise is that our human rights in Victoria are being limited or bypassed at the hands of the Dan Andrews’ State Government and are no longer adequately protected. It was also disappointing to discover from the results of our recent State election that a substantial percentage of our voting population seems to be content to accept that fate for the right price. That is, as long as they were still getting their salary or a decent welfare handout from the government.

The CFMEU protests in late 2021 made Victoria’s political landscape abundantly clear: the Dan Andrews’ Labor government with its heavy-handed police force, overpaid union boss and his “colleagues”, and their allies in the Liberal Party, joined forces against the people. In the end we saw unarmed protesters shot by Victoria Police with rubber bullets.

Although IBAC inquiry after IBAC inquiry digs up “grey corruption”, Dan’s “I can’t recall” line deflects any responsibility. $7.7million of taxpayers’ money was squandered defending the Andrews government’s disastrous decision to have night club bouncers run hotel quarantine. $5million plus residents’ legal fees will be paid to public housing residents in Flemington after the Victorian Ombudsman found the State government breached their human rights by detaining them without the support of health advice, and residents claim they were threatened with physical harm if they tried to leave.

The Premiers’ personal life is not void of colourful scandals either, including his “wife’s” collision with a teenage bike rider and the more recent falling down the steps saga. Dan’s track record is far worse than across the border in NSW where you lose your job over a bottle of wine, yet he remains untouchable. 

Transparency, integrity and accountability would be a good place to start.

Andrews has shamelessly run our State into an alarming level of debt. There is a serious mental health crisis caused by his response to Covid, and our current cost of living pain is real. Despite this, entertaining drag queens while they read books to children in Parliament seems to be his priority.

What are the remedies to all this? Transparency, integrity and accountability would be a good place to start. My suggestions to improve our current situation are as follow:

1. A Royal Commission
   Any government found to breach citizen’s human rights by the Victorian Ombudsman or in the Supreme Court should automatically trigger a Royal Commission. A Royal Commission into the Andrews government and its response to Covid is essential.
2. A Bill of Rights
   We need our human rights entrenched in our constitution, to protect the values of Australia that I once knew including freedom of assembly, freedom of association, and freedom of speech.
3. Strengthening IBAC
   As recommended by former Court of Appeal judge Stephen Charles KC, IBAC should adopt the broader international definition of corruption, “the abuse of trusted powers for personal or political gain”. As with ICAC (NSW’s equivalent), it is in the public interest for IBAC hearings to be made public and for it to publicise findings of corruption.
4. Full Transparency
   Taxpayer money should not be used to oppose Freedom of Information requests. Meeting notes, documents, emails and information used in support of important decisions having a major impact on our lives should be made publicly available.
5. Cut the Victorian Government’s political staff by 75%
   Andrews’ staff doubled from March 2020 to March 2021, costing taxpayers $49.2 million. The number of bureaucrats on $350,000 plus has increased by 142% since 2019. Ideally, his expanded public service should also be cut while we’re at it – the bigger the government, the bigger the problem.
6. Repeal Victoria’s political donation laws
   As an independent candidate at our most recent State election, I experienced firsthand the effect of the dodgy donation laws that saw the regime maintain an uneven playing field, winning government with just 36.6% of the vote. Any registered political party or independent candidate should be able to receive unlimited donations. Currently MPs receive more than $20m in public funding to cover administrative costs plus a communication budget. This money should be excluded from funding any expenses related to political campaigns.
7. Stop public funding for the Government’s political polling and consultants, and social media
   If Andrews wants to make decisions based on popularity or to buy fake followers to stroke his ego, he should pay for it himself.
8. No banning media
   Our media was hamstrung during Covid. If you didn’t ask favourable questions at Andrews’ press conferences, you weren’t allowed back. Despite my values of freedom of choice, when it comes to taxpayers’ money and journalism, all media should be allowed at any political press conferences. They work for us and shouldn’t need to ban certain press if they have nothing to hide.

Libertarians hate to pay tax, especially at current rates. Many subscribe to the view that “taxation is theft”, although most also acknowledge the government has a legitimate role in limited circumstances for which it requires funds.

With that off our chests, let’s get practical and talk about how the government’s debt collection activities in relation to small businesses interfere with the free market and create moral hazards. 

One of the most active ways the government intervenes in the free market at the SME level is through its debt collection activities.

SMEs accrue significant tax obligations, regardless of their profitability, because they are required to pay not only their own tax, but “other peoples” tax which they withhold on behalf of the ATO (commonly referred to as ‘withholding taxes’).

These withholding taxes include ‘Pay As You Go’ income tax they deduct from their employees’ wages and salaries, as well as the GST their customers pay on their purchases.   

A business turning over a modest $1m per annum and simply breaking even
can easily have upwards of a hundred thousand dollars in ATO obligations
for these withholding taxes.

Problems begin when businesses retain these monies to use as working capital instead of passing them on to the ATO as they are supposed to.

And this is where the moral hazard begins.  How tough should the ATO be when it comes to collecting these taxes from small businesses? 

The pro-small business observer might say the ATO should support small business by being lenient. 

And the ATO is extremely lenient. In fact, it has been extraordinarily lenient through Covid. In its last annual report, the ATO reported some $44.8b owing in overdue and uncontested (“collectable”) withholding taxes from small business. It also reported 13,000 small business tax arrangements entered into in FY 2022.

In its 2022 Annual Report the ATO stated:

As the economy recovers, one of our key priorities is to address the collectable debt that has accrued over the past 3 years. This has increased from $26.5 billion at 30 June 2019 to $44.8 billion at 30 June 2022 – up $18.3 billion or 69%. The increased debt is a result of disrupted economic activity due to lockdowns and cash flow impacts on small businesses and households. During the early stages of COVID-19 we deliberately shifted our focus away from firmer debt collection action to assist businesses and the community experiencing challenges because of the pandemic.

To put this $44.8b in context, according to the Reserve Bank of Australia, as of April 2021 the total outstanding credit to small businesses in Australia was around $291b, including loans from all types of lenders, not just the banks. Suffice to say the ATO is not a small player when it comes to extending credit to SMEs in Australia.

The moral hazards are as follows:

• The ATO gives a competitive advantage to a business which is either unable or unwilling to remit its taxes, allowing it to undercut a business that diligently pays its taxes and prices its goods and services accordingly.
• Many businesses that fail to pay their taxes ultimately fail. When that occurs, they take with them money they owe their suppliers, employees and sub-contractors, who might otherwise not have been exposed to the failed business but for the ATO keeping it in business.
• $44.8b in uncollected taxes is $44.8b our profligate governments will seek to gouge out of the rest of us one way or another elsewhere.

The Austrian economic principle of ‘creative destruction’ refers to the natural process of innovation and market competition, whereby new and more efficient ways of producing goods and services replace older, less efficient ones, and well-run firms outcompete poorly run firms. It is a Darwinian process where resources are re-allocated from losers to winners.  Creative destruction is essential for a prosperous free market as it encourages businesses to constantly innovate and improve, leading to greater efficiency, lower prices, and higher-quality goods and services for consumers.

The moral hazard created by the ATO in the form of leniency towards debt collection and granting unfair advantages to businesses that do not pay their taxes, compromise the process of creative destruction by propping up inefficient and unproductive businesses, inhibiting market competition, and ultimately hindering economic growth.

To promote a truly free market and ensure long-term economic prosperity,
it is necessary to hold businesses accountable for their tax obligations
and to allow the natural process of ‘creative destruction’ to take its course.

While the catch cry “taxation is theft” may be contentious, the practical implications of the government’s debt collection activities for small businesses cannot be ignored.  For those who favour a genuinely free market and long-term economic prosperity, we must hold businesses accountable for their tax obligations and question the role of the ATO in hindering the natural process of market competition.

If smuggling isn’t the world’s oldest profession, it’s likely a smuggler was one of its first customers. The moment a tax or restriction is imposed on any trade, an incentive for smuggling is created.

Smuggling has also influenced world affairs. Britain’s heavy-handed attempts to prevent its US colonies from trading with the Spanish empire, which were circumvented by smuggling, stirred the desire for independence.

The Chinese government’s efforts to stop opium smuggling in the 1840s led to the opium wars, two outcomes of which were Britain’s acquisition of Hong Kong and China’s distaste for foreigners. And of course, smuggling of alcohol in America during Prohibition gave a huge boost to organised crime and led to the creation of the FBI.

In the twentieth century, the prohibition of recreational drugs led to smuggling becoming a vast international industry, funding organised crime and corrupting entire countries.  Moreover, laws passed to suppress it were often fundamentally at odds with a free society.

Given this history you might expect the Australian government to be wary of creating another opportunity for smugglers. As the saying goes, those who fail to learn from history are doomed to repeat it. Yet that is exactly what Australia is doing; a large and growing smuggling industry has developed as a direct result of its massive increases in tobacco excise.

Tobacco excise is increased in March and September each year by average weekly ordinary time earnings (AWOTE) plus whatever the government decides. The big jumps began in 2010 under Labor with a 25% increase followed by yearly increases of 12.5%. This continued until 2020 under the Coalition.

In July 2006 tobacco excise was 23 cents per stick, or $291 per kg. By February 2023 it was $1.14 per stick or $1,629 per kg, an increase of 490% and 560% respectively. Over the same period the CPI increased by 152%.  In other words, tobacco excise increased about 3.5 times as fast as inflation.

Cigarettes in Australia are now the most expensive in the world at about $2 per stick at retail level. This has contributed significantly to government revenue: three or four years ago tobacco excise raised around $18 billion dollars a year. For reasons that will become obvious, it is now around $14 billion.  

With the price of an entire pack of cigarettes costing less than $2 in some countries, there is an enormous incentive to smuggle tobacco products into Australia. It is said that even if nine out of ten containers of illicit tobacco products are intercepted, the profits on the tenth are sufficient to not only cover the losses but also reward the smugglers handsomely.

Smokers, a large proportion of whom have low incomes, at first responded to the increase in excise by reducing consumption, prompting health bureaucrats and anti-tobacco activists to pat themselves on the back. But, unlike in the rest of the world, the decline virtually ceased a few years ago. Many just switched to smuggled cigarettes and tobacco.

The periodic survey of tobacco consumption by KPMG found illicit tobacco increased from 14% of the market in 2018 to over 20% in 2019. A total of 3.1 million kilograms of tobacco, loose and packaged, was smuggled into the country, avoiding $3.4 billion in excise. 

The response of the federal government has been to boost deterrence and interdiction efforts. Penalties have been increased and, in 2018, it established an Illicit Tobacco Taskforce to “proactively detect, disrupt and dismantle serious organised crime syndicates that deal in illicit tobacco”.

The Australian Tax Office, which is responsible for stopping local tobacco production, also ramped up its efforts. It uses satellite surveillance to detect crops based on their biological signature, the same technology used to identify cannabis, and boasts loudly whenever it detects and destroys a tobacco crop.  

The availability of smuggled cigarettes and loose tobacco has not faltered.

To some extent this is of no great concern to anyone except the federal government. Cheap smokes are no more dangerous than the legal kind and the smugglers are merely evading taxes, not something most of us would seriously criticise.  The smokers who consume illicit tobacco products can hardly be blamed for wanting to save money.

The real problem is that the people smuggling tobacco are also smuggling other things. They are organised, sophisticated, dangerous criminals. Profits from tobacco smuggling are funding these other activities, including human trafficking. According to the US Department of State, traffickers are denying nearly 25 million people “their fundamental right to freedom, forcing them to live enslaved and toil for their exploiter’s profit.”

Whether the government should even expect to make a difference, given smuggling’s history, is a good question.

You would have to search long and hard to find where
smuggling has been substantially suppressed through law enforcement,
particularly in a country that respects legal rights and due process.

If the enormous resources devoted to the control of drugs have failed to limit their availability, why should it succeed with tobacco?The alternative of removing the incentive to smuggle tobacco into Australia by reducing the excise is never considered. Yet smokers would gladly buy their favourite legal brands if they were cheaper, legitimate tobacco suppliers and retailers would not be competing against illicit suppliers, and much less money would be spent on law enforcement.

The simple fact is there is no prospect of controlling the illicit tobacco market through enforcement, just as it was not possible to enforce alcohol prohibition in America or prohibition of drugs anywhere in the world. As the police would say, this is not a problem you can arrest your way out of.

The 1999 Venezuelan Constitution, sponsored by the late Hugo Chávez as the foundation for his nascent revolution, has been described as “the non-sexist Magna Carta.”

The writers of the document went to great lengths to use the Spanish masculine and feminine forms throughout the text. For example, presidente and presidenta are both used in quick succession to refer to the role of president, even though it is grammatically correct to use the masculine form to refer to both genders. This unnecessary repetition makes for a very cumbersome read. Chávez himself spoke like this, occasionally making up absurd gender-neutral words.

The National Institute for Women was established in October 1999. Then in 2009, the Institute became part of the newly formed Popular Ministry for Women and Gender Equality.

“Our main political program is mainstreaming gender into every sphere of Venezuelan public and political life. Within all government programs — health, education — we want everyone to know about and think about gender issues.”

Corina Fumero, National Institute for Women. Green Left Weekly.

8 February 2006. 

Was Hugo Chávez simply a man ahead of his time, a true visionary, a prophet for a new progressive movement that was about to take over the world?

Today, of course, progressives try to distance themselves from him, knowing as we know now the devastating results of his revolution, in a country with enough resources to be another Dubai. But make no mistake, everything that Australian progressives stand for today was put into practice by Hugo Chávez more than two decades ago.

You only needed to hear Hugo Chávez speak to understand how the concept of
class struggle and anti-capitalism was expanded to include
gender, race and colonialism.

A group of bad people always oppress a group of good people. The entire history of humanity is explained by this cartoonish good-guy versus bad-guy categorisation.

Group membership is what determines your moral value. The oppressed, as a group and regardless of their individual actions, are entitled not to equal treatment but to indefinite retribution. The oppressors, also as a group and regardless of their individual actions, are forever guilty and beyond salvation.

This is, for example, how official large-scale seizures of land, property and businesses are justified while sectors of the population are actively encouraged to take back what is ‘rightfully theirs’. Your legal claim to property can be overridden by fuzzy claims of oppression.

Climate change is of course an anti-capitalist dream and Hugo Chávez was an outspoken campaigner for climate action.

Many in the West today might be surprised to learn how much they have in common with the father of 21st century socialism. If they are being honest, they would admit to finding his speech at the Copenhagen climate conference in 2009 riveting and forward-looking.

“Let’s not change the climate, let’s change the system! And consequently, we will begin to save the planet. Socialism, this is the direction, this is the path to save the planet, I don’t have the least doubt. Capitalism is the road to hell, to the destruction of the world.”

A few short months after that crowd-pleaser of a speech, Chávez was back home trying to make people use less power.

Equity and climate change are the high moral ground from where an undeterred expansion of government control is presented as a solution. The virtuous ends that unequivocally justify all means.

This is the vindictive culture that tore Venezuela apart. These are the teachings of Hugo Chávez. And too many well-intentioned Aussies are listening.

C.S. Lewis said it best when he wrote:

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

“We contend that for a nation to try to tax itself into prosperity
is like a man standing in a bucket and trying to lift himself up by the handle.
It is impossible.” 

Those were not the words of an Australian Commonwealth Treasurer but rather of Winston Churchill addressing the House of Commons in 1925 arguing against a proposed increase in taxes.

Almost 100 years after Churchill’s comment, Treasurer Chalmers presented his second Budget, in May 2023.  It showed yet another record amount of tax collected and sums spent.  For the coming 2024 financial year, the Government expects to collect $668 billion (25.9% of GDP) to fund $684 billion of spending (26.6% of GDP). 

Of course, spending is higher than revenue so yet again
there is a deficit to add to the national debt pile
for our children and grandchildren to pay.

Of the $684 billion of spending, it is estimated that $356 billion or around 52% will be spent on health and welfare.

And within the social security and welfare line is the following:

From a standing start around ten years ago, assistance to people with disabilities, ostensibly NDIS, is now the second largest Commonwealth government program.

Over the life of the budget (FY23 to FY27), the average annual increase in spending on the aged pension increases by 6.5%, but the average annual increase in spending on the NDIS is 7.9%.  Both increases are faster than economic growth and the average annual increase in receipts (3.7%).

Like much of the developed world, Australia is experiencing an ageing population. It could be reasonably expected that spending on aged pensions might increase, but so much for superannuation. 

Yet given the rapid growth of NDIS spending, one might conclude that
Australia is also experiencing a dramatic increase in disability. 

Maybe there is something in the water.  Or perhaps the education system.

Parked near the back of the budget papers is an analysis of real per-capita spending and taxing: per-capita to adjust for government activity increasing due to population increases; real to adjust for inflation over time.  And in these numbers, the true state of budget disrepair is evident.

On a real per-capita basis, in the 2024 financial year:

• Commonwealth receipts are expected to be $18,102;
• Commonwealth payments are expected to be $18,479; and
• Commonwealth net debt is expected to be $15,574.

Impressive.  From an average four-person household, the Commonwealth expects to extract $72,408.

But here is the interesting part.  Thirty years ago, in per-capital real dollars:

• Commonwealth receipts were $8,866;
• Commonwealth payments were $10,110; and
• Commonwealth net debt was $11,364.

So basically, in the space of 30 years, on a per-capita basis, we are paying double the amount of tax, the Commonwealth is spending almost twice as much, and debt is 4.5 times larger in real terms.  And 30 years ago was 1983-84, when Bob Hawke came in inheriting a national economic basket case.

It is worth noting that the inclusion of historical real per-capita data in the budget papers is owed to the negotiation efforts of former Senator David Leyonhjelm.  Such important government finance transparency highlights the value of a strong classical liberal voice in Australian parliaments.

During the 1980 US Presidential election debate, Ronald Reagan asked the (rhetorical) question: “Are you better off than you were 4 years ago?” Here is a question for Australians.  Is Australian government better than it was 30 years ago?  Given the doubling of taxing and spending, are services better?  Is Australia safer?  Are we healthier or smarter?

Perhaps Churchill was only half right.  A nation can’t tax itself into prosperity, but Australia is trying to tax itself into welfare and disability.