2 May 2014

Audit Report is a step back from the future. It's head in the sand stuff.

The states should have more control over Commonwealth money.

Competitive federalism is the new in thing, the new thing that has floundered in history. The countries that have been lumbered with such a system, all wish they could be rid of it.

For all their whingeing about vertical fiscal imbalances, the states already have plenty of responsibility for trashing their own tax bases and they are extremely adept at trashing their finances. 

Having ditched death duties, they routinely whittle away at their pay roll taxes and refuse to use their powers to get serious about land tax – removing all exemptions – while continuing with their inferior, inequitable stamp duties.

Oh yes, and they do from time to time compete to convince a company to set up its headquarters in one capital city rather than another, generally of great benefit to the company concerned  but adding additional costs to revenue and of no benefit to the nation

Then there is the matter of the quality of state politicians. It's difficult to get people to trash their lives by entering federal politics let alone state parliaments?
State governments and oppositions tend to be a sorry lot, to think that they would handle matters more efficiently  than the Commonwealth is beyond belief, just look at the Pandora's box being opened into state politicians behaviour.

Competitive federalism is joke it does not work.
Competitive federalism tends to keep the poor states poor and the richer states much richer. The Commission of Audit's big, radical recommendation is flawed when one looks at it objectively.

Then there are the commission's two big misses, two dogs that didn't bark at all.
They passed the buck to the taxation review to have a look at the overly-generous aspects of a system that’s become an on-shore tax haven for the wealthy and they really didn't investigate welfare entitlements available to the wealthy.

They were like doctors concentrating on which incision to make without checking to see if the patient is still breathing and likely to survive the incision.

Secondly, the commission failed by making its recommendations in a vacuum: it lacked any context beyond a narrow focus on reducing government spending. 

Based on an article by Micheal Pascoe

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