LETTER: Politics’ hard reality

GP 9/1/13:

HOW ever bizarre it may seem, particularly where a political aspirant is attempting one upmanship against a competitor, isn’t it all but unique to suppose that it is a negative to tell the truth? Heaven forbid!

Yet isn’t this the case in Bruce Nicholson’s response (GP Dec 31, 2012) to Angus Taylor’s underlying acceptance that at the end of the day even government has to live within its income? Not least because an accumulation of previous (Labor) governments have failed to do so, isn’t it now inevitable that incoming governments are obliged to begin by balancing the books prior to embarking on new or enlarged spending programs?

Given the possibility that the Katter Australia Party could somehow finish up holding some kind of the political balance of power, perhaps it is appropriate that the likes of Mr Nicholson demonstrate an effective understanding of the importance of balancing the books and of the consequences to our social and economic fabric where government consistently fails to live within its means.

It is all too easy to delude ourselves that the services provided by government are somehow funded through a mystical and financially disconnected third party, when in fact they are invariably being “paid for by the taxpayer.” In reality it is all but unheard of for governments to actually create wealth.

Through the collection and expenditure of various taxes, governments are limited to simply redistributing the wealth of others. Surely, the higher the rate of tax collection, the greater the reduction in resources available for individuals and private sector business to generate additional wealth. The greater the available wealth, the lower the impact of necessary tax levels.

Should government choose to incur debt to bridge the gap between its revenues and its expenditures, and there can be emergency situations where this is necessary, trends can be starting down a pretty slippery slope. For all of us the consequences of incurring debt are inevitable. Our spending ability is reduced first by the need to pay interest on the loan and second by the cost of paying off the debt.

As government does not enjoy any special immunity from these inevitabilities it has to be self evident that the higher the government debt, the less revenue is available to fund the provision of its various services.

Particularly if prospective candidates differ from the truth accepted by Angus Taylor, this might be a good time for them to explain their understanding of how government can continue to supply and expand services at the same time that it is incurring ever increasing taxpayer debt.

Alix Turner, Wayo.

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