A Taxing Question
The topic of political discussion this week seems to revolve around a mooted new income tax levy to help repair the national budget.
Let me make two things very clear from the outset. Firstly, I only know as much as you about what is contained in the budget to be delivered on 13 May. The only information I have is that which is in the public domain.
Secondly, I have always believed that a government should lower taxes – not increase them.
The cost of living is already spiralling out of control for many Aussies. Essential items like housing, fuel, utilities and food are making Australia a very expensive place to live. Then when you consider some of the important elements to encourage an independent and responsible citizenry, things are becoming even more unaffordable. Let me explain.
The conservative mantra has always been about encouraging people to take responsibility for their actions whilst limiting the growth of the state. As such, a conservative like me thinks that protecting yourself, your family and your property through adequate insurance is an important step. However, the cost of appropriate insurance is rapidly becoming out of reach for many.
I recently sought to change health insurers after 20 years with the one provider. I found an affordable policy with a substantial excess that suited my family’s needs. This reduced the premium by over $100 per month. Yet when trying to sign up I was told that by choosing that level of excess I would also have to pay the Medicare surcharge but if I chose a lower excess I wouldn’t have to.
It seems that being pro-active about my own health care was going to cost me more because of government legislation. I haven’t found one good reason for this situation and have written to the health minister seeking more information. I’ll let you know how I go.
Another important insurance item is death and disability insurance. It seems obvious to me that being able to financially provide for your family in the event of a tragic event is in everyone’s interest. The government saves money because less demand is made on their support services and your family are not compelled to drastically reduce their standard of living should the worst occur.
However, a letter this morning has made me think again. I have just learned that my weekly premium for the same level of insurance is set to double. Apparently it’s because “unemployment is increasing, disability claims are rising and there are more frequent insurance communication requirements.”
I don’t know how many families will be able to afford a doubling of their weekly insurance premium as a result of these factors. Something will simply have to give.
Which brings me to the folly of increasing taxes. A conservative government should be taking less tax from people and expecting them to be more self-reliant. Taking more of their weekly wage will only act as a disincentive or make it even more unaffordable for people to do the right thing.
I know the country has been left with a significant debt burden – a circumstance that I have repeatedly warned about over the past six years. But reducing that level of debt demands we grow the size of the economy and shrink the size of government.
Growing an economy needs private investment and spending to create jobs and stimulate demand. For individuals and companies to do that, they need more of their own money left in their pocket, not less.
Shrinking the size of government means prioritising expenditures and actually reducing the burden on ordinary taxpayers.
I just hope the government thinks the same way.