Submarines and taxes

Submarines and taxes

It’s election time in Australia. Soon the country must decide which colour muppets they would like to enter the Canberra bubble and argue amongst themselves over inanities that only they care about.

It is a depressing prospect.

Equally disturbing is our pain over the weeks leading up to the election. There will be TV ads, online adds, robo calls, more twittering than in Grandmas aviary and excruciating nodding by the professional head-nodders in the photo op entourage. It will strain the most stoic soul. The only interesting part will be my ad hoc study of the correlation between nodding styles and electoral swings.

In the ‘vote for me’ speeches from the prospective muppets there will be any number of announcements from the pork barrel. “See how much taxpayers money we are spending on you” they will say using different words. Wait, that is the money the law says we have to give you before anyone gets a paycheck. Yep, that money.

It is worth remembering that this allocation of taxes to support a healthy society is a key function of government, perhaps the key function. Lawmaking matters of course but the funding allocations affect everyone, every day. So knowing what the policies are and how much they will cost is important to know before making a voting choice.

Only there are numbers you are never told.

For example, the tax revenue. That is the annual amount they get to allocate. Perhaps it would be good to know the extent of the fiscal reserves or the amount of dosh actually in the pork barrel (as opposed to what might go into it).

Tax revenue is published of course. So we can go online and find that it was $489 billion in the 2016-17 financial year.

What proportion of this vast amount is already accounted for to support services, debt and any new commitments from the barrel is harder to glean. It’s available though should you have the patience to sift through budget papers.

The point is that these companion numbers do not make it to the hustings.

Yet we need them to make sense of any claims.

When a Minister announces that the government has committed A$50 billion to the purchase of French nuclear submarines, it is very hard to understand this number. It is vast of course, way more than the average lotto payout and several orders of magnitude larger than the numbers on our tax returns. So it is hard to find companions for sums this large without blowing the mind.

How about A$2,000 for every man woman and child in the country?

That’s A$5,200 for a typical household.

Imagine the politician on the hustings coming up with “Hi folks, this year we want each household to give five grand to the French. Don’t worry it comes out of your taxes and in return we get some submarines to protect us from the many hostile forces in our region”. The expression on the nodding heads would be priceless as they witness the political suicide before them.

But it shouldn’t be like this.

Defence is an important issue. People have a right to feel safe and be safe as far as the current military deterrents and diplomatic landscape allows. That $50 billion could a bargain.

It is possible to break the rhetoric and make sense of it all when the heads nod at the next monetary announcement.

Just remember that the governments spend roughly $20,000 per person per year if the tax revenue is shared equally and most of that goes on health, education, an array of social services, and infrastructure.

This will help put into context the offer of a grant to upgrade the local library and the bigger spending on military hardware.