We can make a huge difference in government over time by spending money differently, changing our priorities and spending existing revenues better:
We should invest in learning not defence. We could move half the defence budget into education and research. That’s around $15 billion per year. It would allow us to subsidise free undergraduate university education, rebuild TAFE and fund scientific research. Australia is not capable of independent defence and remains valuable to strategic partners. The recent growth in the defence budget should be turned back and redirected into education to support our future economic and social development.
We can be a renewables superpower by moving carbon subsidies and exploration incentives across to renewables such as solar and wind. That’s around $10 billion per year, which will provide a platform to attract investment in a key new industry. Historically, energy has been a state-run business, and the privatisation of the sector has only resulted in dysfunction, unemployment and higher retail prices. Government investment in industry development is inevitable and should favour the future: renewables.
The existing bank tax yielding $1-2 billion per annum can be earmarked for small business development, especially in regional Australia, funding incentives to employ and train workers including apprentices, with a dedicated development fund for mutual and co-operative businesses that put their communities before profits.
We spend billions on detention centres in the Pacific and those funds could be better spent improving on-shore criminal justice in rehabilitation, victim compensation and community integration programs, along with investing in regional development to support refugees and asylum seekers.
We can also refresh the way we fund government services or projects and raise tax:
A turbo-charged sovereign wealth fund – with a board appointed by the federal government – should tap superannuation funds and redirect offshore investment into key infrastructure projects. The fund could support partial re-nationalisation or government statutory corporations in key industries such as electricity, transport and banking.
A new land tax paid by all land owners – working with the states and replacing stamp duty – would add billions to revenue and fund an affordable public housing scheme, addressing the existing market failure for lower and middle income housing. Reducing the discount for capital gains taxes could also boost revenue.
Universal basic income – government income support can start with a basic safety net for all citizens, with top ups for disability, aged pension, veterans and unemployment. Basic income for people without work (e.g. Newstart) should be significantly increased. The system should be based on providing subsistence rather than economic utility.
High income earners should contribute to the federal budget through a Buffett-style tax. People earning say $250,000 or more pay must an agreed percentage of their income – a flag fall – in tax each year. The minimum rate paid should be no less than the GST.
Corporate turnover tax will ensure companies contribute to government revenues, even when their income tax would otherwise be zero. A corporate equivalent to the Buffett tax. Related tax reforms could include a stock exchange transaction tax.
Public Health – Medicare Levy and health insurance rebates should be reviewed; reducing public funding of private health cover and boosting public health spending.
Public Schools – public education needs to be rebooted and renewed. Private school funding should be reviewed and reduced with a boost to public school spending.
Indigenous justice – a treaty levy could fund the compensation, development and reconciliation projects that flow from treaties negotiated with indigenous Australia.
Public broadcasting guarantee – funding for the ABC and SBS can be doubled in year one followed by a fixed, statutory 10 per cent increase for 10 years.
Federalism – we need to review the fundamentals of federalism and articulate clear principles for government and revenue sharing. The level and use of GST should match government priorities.
Key worker investment – we need to invest in valued key workers like nurses, teachers, police and firies across the country.
Middle class welfare – phasing out superannuation exemptions and introducing means tests for all tax benefits can lower government spending and release funds for other programs.
Religious institutions tax – larger religions that hold land and generate income should pay land and turnover taxes at a rate between charities and businesses (say 10% of income, the rate of the GST).
Development Tax – a Robin Hood tax applied to cross-border financial transactions could fund regional development and an international aid budget up to 0.7 per cent of GDP.
Budget Strategy – a Federal Spending Ombudsman should be created to set surplus and deficit targets and to manage a long-term bi-partisan budget strategy.
Climate Change Fund – positioned as a long-term investment in our future and significant job creator across the country.