It might not mean much to you right now but Greece has gone broke. It is so desperate for cash it has had to borrow hundreds of billions of dollars just to pay its bills.
So riddled with rorts and waste is the Greek economy that it has collapsed under the weight of modern day socialism. You might not recognise it as a variation of the previous socialist experiments, but the association is there for all to see.
The welfare state of Greece has seen lifetime pensions for unsackable public servants, union dominated industries resistant of any industrial efficiency and dozens of overstaffed and inefficient state operated firms.
And here’s the rub. The failed state will need more than one bailout and it can only come from nations that have done the right thing. You know, countries that have actioned those common sense things like not spending too much, operating efficiently, saving a bit of money, not paying people to do nothing, not allowing union domination of industries and so on.
Just imagine how you would feel. After working hard all your life to make your own country better, stronger and more secure, to then have your hard work shipped off to an indolent welfare state that has lived for decades beyond its means.
Of course it can’t happen here – can it? After all, we are rich in resources, we are business friendly and we have a competitive taxation regime.
Perhaps you better think again.
The past two years have seen a massive run-up in the level of national debt. Some estimates are that our government has now borrowed over $200 billion. Even the most simplistic of calculations put the interest cost on this debt at around $10 billion every year. That’s around $200 million every single week.
This debt is a result of wasteful and spendthrift government policies that are an impediment to our long-term economic future and prompts the question about how it will be repaid. The options are relatively simple: government can spend less or tax you more.
The modern socialist system offers a new tax solution. It simply locates an industry that is doing well and then whacks a massive new tax on it as a source of government revenue.
This is exactly what the Rudd Government is proposing with its Resource Rent Tax.
Industries that are already paying billions in tax will now have an additional taxation burden placed upon them. In some instances it will make resource projects uncompetitive and unviable, resulting in job losses for many Australians.
Now I know these companies are making a lot of money. And they are already paying a great deal of tax. If we make them uncompetitive then we will all suffer the consequences.
The recipe for the creation of wealth isn’t to increase the burden of taxation.
It is to offer greater reward to those prepared to take the risk of making a profit, whether they be a small business or an industrial giant.
Any government with an eye on a future beyond the next election would realise this and be fighting to lower taxes for all Australians and Australian companies.
Tax reform is not about new taxes but should be about lowering taxes. I only wish the Rudd Government thought the same way.
Cory Bernardi is the author of seven books and has been a member of the Australian rowing team, a publican, an investment portfolio manager and spent nearly 14 years as an Australian Senator.
