March 6, 2013
The Centre of Independent Studies has published a monograph entitled Target 30 Towards Smaller Government and Future Prosperity. Target30 aims to reduce government spending from its current level of 35% of GDP to less than 30% within the next 10 years.
The monograph argues that by defaulting to a big government solution to every problem, we disempower individuals and communities from dealing with their own problems. This ultimately leads to dysfunctional societies. Shrinking the size of government will, the argument runs inject new vigour into the economy.
This would give us a competitive advantage in the global economy, enabling us to have some of the lowest tax rates in the developed world and boosting economic growth. stimulate the charitable sector, foster personal responsibility, and reforge the community ties that once bound our society together.
Shrinking the size of government will, it is asserted, can also unlock the social and community benefits of smaller government—allowing the charitable sector to once again play a significant role in society, strengthening the bonds of family and community, and recreating the social capital that once kept society functioning effectively.
It is claimed that even though Australia is in an enviable economic position compared to the rest of the world, we still need to learn lessons from the fiscal and debt crises in big-spending, big-government countries. This is because Australia will face serious budgetary pressures from an ageing population, falling economic growth, and rising costs (especially in health). However, achieving smaller government is not the policy of austerity in that it does not propose to abolish the welfare safety net, or punish the poor.
So what is being proposed? Take health, which is seen as health is the area of public expenditure with the greatest potential for substantially increasing the size of government in coming decades. The CIS proposes that in order to address long-term affordability problems in health:
a national health reform program needs to be implemented to increase the role of private sources of health funding, primarily by shifting to a health saving and insurance voucher health care financing system. A sustainable way to fund rising health costs is to save up and pay for health care over time, using a mix of ‘superannuation style’ health savings accounts (HSAs) to pay for minor medical services, and by paying for private health insurance premiums to cover the cost of treating major illnesses.
In addition, redirecting Medicare funding towards an insurance voucher system would allow health funds to choose to organise treatment for members in public or private hospitals based on the price and quality of services. Competition will spur improvements in the performance of public hospitals.
So we have privatisation of the public health system There is no mention of reducing the public subsidies for private health insurance. They say nothing about that kind of burden on the taxpayer.