The Role of Government? Which areas should spending be cut from?

[Sprinter79]

How much money got wasted in the defence budget on those few stuff ups?

By the way, how do you know I'd be the first complaining? I'll be heading straight for the black market :

 

[Julia]

As far a health and education go, there is a lot of room to increase spending there... and have the tax cut... things i would target are

3. Private Medicare Rebate (what exactly is the point of that, certainly that money can also be funneled into the common health budget)

Rafa, I don't agree with abolishing this. Private cover is simply essential given the woeful standard of Queensland Health hospitals. Can't speak for the other States. Cost of medical care appreciates exponentially and the rebate makes the security of private cover more affordable.

7. Baby Bonus!!! (What the hell is that!!!)

Absolutely this should go. One of Costellos's more bizarre ideas.
It has increased breeding amongst those who will always be dependent on welfare, thus just perpetuating multi-generational welfare. The basic idea of providing more workers to contribute to the tax system for when we have so many more on age pensions makes some sense, but not if the extra baby (or six!) is simply going to be drawing the dole.


I'd like to see some trimming of the generous retirement schemes for ex members of Parliament.

So far Mr Rudd seems to have a pretty good sense of what matters to the populace, is clearly keen not to be a one term government, so I'd feel optimistic that he will in fact do some worthwhile trimming.

 

[Sprinter79]

Rafa, I don't agree with abolishing this. Private cover is simply essential given the woeful standard of Queensland Health hospitals. Can't speak for the other States. Cost of medical care appreciates exponentially and the rebate makes the security of private cover more affordable.

The trouble is is that the rebate has given the PHIC ammunition to ask for more rate hikes...

 

[Rafa]

agreed, i think the rebate has simply fueled the profits of the private health funds...

how much does the this rebate actually cost??

I found this article on the web, as with all web articles, please check for any inaccuracies...

http://www.drs.org.au/new_doctor/79/Segal.htm
(drs is doctors reform society)

Why support private health insurance in Australia?
Leonie Segal

Leonie Segal is Deputy Director of the Health Economics Unit, Monash University.

The role of private health insurance (PHI) in Australia has not been reassessed since the introduction of Medicare in 1984 signalled bipartisan support for universal health cover reflecting widespread community support. The prospect of an uninsured person, unable to afford urgently needed hospital care was a reality prior to the introduction of Medicare and provided a clear justification for public support for private health insurance. However, with the adoption of a publicly funded universal health scheme, ensuring free access to public hospitals and free or subsidized access to medical and pharmaceutical services, the rationale for public support for PHI was no longer self-evident. But we find a series of ad hoc policy adjustments to support private health insurance. Why? - given public support for Medicare and the associated principle of access to health care on the basis of need.

The policies to support private health insurance are costly. The total cost of the package is over $3,600 million per year; including $1,100m in taxation revenue forgone through exemption of the Medicare levy surcharge, (Smith, Australia Institute), $2,200m in funding the 30% rebate (Australian Institute of Health and Welfare), ~$400m in extra Medicare payments for medical and pharmaceutical services associated with higher private hospital use, and the cost of a tax-payer funded advertising campaign to promote PHI membership.

If this subsidy had been allocated directly to public hospitals, the Commonwealth contribution to public hospitals would have increased by 50%.

What has been the impact of directing these funds to the PHI rebate and tax exemptions? The suite of policies has undoubtedly raised private health insurance membership - from 30.1% of the population in December 1998 to 44.2% in December 2002, with a vast improvement in risk profile - 98% of new members being under 65 years. Most of the increase followed the adoption of life time rating which penalised new membership after 30 years of age and an associated aggressive media campaign encouraging take-up of PHI.

However, the promised fall in PHI premiums has not occurred, with premiums continuing to rise. The young age profile of new members partly explains the absence of any major reduction in demand for public hospital services. Persons under 65 are not big users of public hospitals - occupying only 1/6 of the public hospital bed-days/head as persons over 65. And in any case, those with PHI have an incentive to continue to use the public hospital system to avoid the out-of-pocket costs associated with a private hospital stay. Especially as 50% of all PHI policies now carry front- end deductibles. The potential impact on public hospital demand is diluted by the allocation of over two thirds of the rebate and surcharge exemption to persons who already had PHI prior to the introduction of these subsidies, providing an income transfer to these persons from the tax payer, with no prospect of a change in service use. Furthermore, less than 50% of the rebate is for hospital use, with the rest for medical gap payments (an income transfer to doctors), other health services (through ancillary cover) and administration and profit of health insurers.

Has the policy brought more private funds into the health system? In fact the opposite has been the case. As PHI cover was falling between 1990/1 and 1996/7, the Commonwealth share of the health budget rose only slightly from 42.2% to 43.8%. But following the dramatic rise in PHI membership, it has increased more sharply to 47.5% of the health budget in 2000-01, matched by a severe fall in the PHI share of the health budget from 10.4% in1996/7 to 7.1% in 2000/01.

Have the policies supported a more equitable health system? The evidence suggests not. Exemption from the 1% Medicare levy surcharge only benefits high-income households and, being more likely to take out PHI, they also receive a disproportionate share of the taxpayer-funded rebate. The tax-payer through the subsidy on ancillary cover contributed $578m in 2002 to those with PHI - largely those on higher incomes - towards the cost of community-based private health services. The major item was $290m to support private dental care, far exceeding the Commonwealth contribution to public dental services ($70 m in 1999-00). It is interesting to note that a $22 m subsidy went on fitness and lifestyle equipment, while only 1.3 million went to support dietetic services and similarly occupational therapy.

It can only be concluded from the evidence that the policies to promote PHI are undermining the efficiency and equity of the Australian health care system - a conclusion reached by many health services researchers. The evidence provides a compelling case for a total overhaul of policies relating to private health insurance.

The role for PHI must be re-evaluated in the context of a system of universal health cover, a system underpinned by the principle of access to health services on the basis of need and payment according to capacity to pay - a principle that enjoys widespread community support.

References: Duckett and Jackson, MJA 2000; Smith, Australia Institute 2000, 2001; Willcox, Health Affairs 2001; Deeble 2003; Butler, Australian Health Review 2002; Hall et al, Health Economics 1999.

The true annual cost of the 30% Private health insurance rebate:

Direct cost of the rebate $2.2 billion
Foregone tax via Medicare levy exemption $1.1 billion
Extra Medicare payments (for services due to higher private hospital use) $0.4 billion
APPROX. TOTAL $3.7 billion

So, thats 2.6billion dollars a year.... !!! (excl medicare levy surcharge, which can even be scrapped), in comparison, the est cost by Labor to fix public hospitals is 2billion over 2-3 years... the budget savings by scrapping this private health insurance push could mean plenty of money to fix the universal health system for all, and money left over as surplus.

We could have the best health system in the world, if we only focussed on having one system.

 

[Julia]

Couldn't it also be that the increasing cost of ever more specialised medical procedures is fuelling the rises in PHI premiums? The cost of some procedures was published recently and several were around the $300,000 mark.

You're not taking account of my reason for needing private cover, i.e. the abysmal state of the public health system. I don't enjoy paying premiums, I get annoyed like everyone else when they rise so often, but - given the state of local hospitals - being able to choose my doctor and hospital is absolutely essential.
Probably a different matter if you live in a large city where there are good teaching hospitals.

 

[treefrog]

Couldn't it also be that the increasing cost of ever more specialised medical procedures is fuelling the rises in PHI premiums? The cost of some procedures was published recently and several were around the $300,000 mark.

You're not taking account of my reason for needing private cover, i.e. the abysmal state of the public health system. I don't enjoy paying premiums, I get annoyed like everyone else when they rise so often, but - given the state of local hospitals - being able to choose my doctor and hospital is absolutely essential.
Probably a different matter if you live in a large city where there are good teaching hospitals.

Jules
try negotiating for services paying cash - you'll find the service better (prompter and smilier) than private health and cheaper - haven't had private health insurance for 40 years and at 60 ame way way in front - raised a family in the process so the cynics don't come back with yeah, maybe if you are single or don't have kids........

 

[Sprinter79]

I have PHI purely because of my level of sporting activity, my general health and my clumsiness : I need glasses and orthotics every few years, so it pays for itself. I recently had surgery, and still had a gap of $2000 dollars to pay though, so sometimes you wonder... But i'd still be waiting to have my tonsils out if i didn't have PHI.

I still think there needs to be a 'means test' of some sort for health cover, and those than can afford PHI, should be 'encouraged' to take it out, thus leaving more resources in the public system for those who really can't afford it.

 

[Julia]

I have PHI purely because of my level of sporting activity, my general health and my clumsiness : I need glasses and orthotics every few years, so it pays for itself. I recently had surgery, and still had a gap of $2000 dollars to pay though, so sometimes you wonder... But i'd still be waiting to have my tonsils out if i didn't have PHI.

I still think there needs to be a 'means test' of some sort for health cover, and those than can afford PHI, should be 'encouraged' to take it out, thus leaving more resources in the public system for those who really can't afford it.

Agree on both counts. A friend of mine who didn't have private cover had to wait five years for a knee replacement. By that time, he also needed a hip replacement purely because he had been walking unevenly during that long waiting period.

The other consideration is that people using private health resources are not absorbing public health resources, so are leaving more room in the public system for those who can't afford private cover.

None of the above, however, excuses the current state of Qld Health.

 

[Julia]

Jules
try negotiating for services paying cash - you'll find the service better (prompter and smilier) than private health and cheaper - haven't had private health insurance for 40 years and at 60 ame way way in front - raised a family in the process so the cynics don't come back with yeah, maybe if you are single or don't have kids........

Treefrog, yep, have considered this, but concluded I'd rather pay the premiums than possibly be faced with a $300,000 outlay for some procedures should that ever be necessary.

One thing that does irritate me with any private policy I've ever looked at is that they don't cover treatment by specialists which is not part of an in hospital stay. e.g. although I have cover for physio, optical, podiatry, etc, I found when I went to orthopaedic surgeon with my broken wrist that Medibank Private offered nothing.

Has anyone found to the contrary with another company?

 

[Rafa]

You're not taking account of my reason for needing private cover, i.e. the abysmal state of the public health system.

I am not against private health cover, i am against the private health insurance rebate...

the govt should focus its efforts on one system, that is my point.

2.6 billion a year is more than whats needed to provide a top notch public health system for all...

(i guess what i am looking for here is ways of slashing the budget)...

 

[lakemac]

Back to the original thread...

Two questions posed:
1. The role of government?
2. Which areas should spending be cut from?

Answer to Q1:
The only role is the enforcement of contract. All others should be done by private enterprise.

Answer to Q2:
Firstly guys - do your homework. Get a copy of the government accounts (all levels of government accounts are available). Sheesh - call yourselves investors; Not! Fundamental research for any company - check their financials. Apply 80/20 rule. Where does 80% of government spending go? Easy answer looking at the accounts: WELFARE.
So simple answer to Q2: get rid of ALL welfare. Make people responsible. Make the family worthwhile again. All these handouts only break families apart. No government is "family" friendly. Add to that the removal of child support and spousal maintenance. Cuts down the divorce rate drastically. You want to have kids girls - weigh up the consequences first. No support from the government and none from the father unless you have a proper contract (prenup/Binding Financial Agreement) in place (see answer to Q1) and for goodness sakes women get financially educated and financially independent. And before the bleeding hearts go on about the poor old ladies - go back and consider why their families are not supporting them. Again make the family responsible - not the state. I don't want my income supporting your old granny. Look after your own. And the poor... Do some historical research before you whine about them. Government usurped the role of looking after the truly poor about 80 years ago. Killed an entire industry.

Bottom line get the government out of your life. Vote for "NONE OF THE ABOVE".

Unfortunately we live in a society full of bleeding hearts and meddlers who just love to tell us how we should live our lives. Government is a direct expression of those meddlers and special interest groups.

 

[Sprinter79]

Back to the original thread...

Two questions posed:
1. The role of government?
2. Which areas should spending be cut from?

Answer to Q1:
The only role is the enforcement of contract. All others should be done by private enterprise.

Answer to Q2:
Firstly guys - do your homework. Get a copy of the government accounts (all levels of government accounts are available). Sheesh - call yourselves investors; Not! Fundamental research for any company - check their financials. Apply 80/20 rule. Where does 80% of government spending go? Easy answer looking at the accounts: WELFARE.
So simple answer to Q2: get rid of ALL welfare. Make people responsible. Make the family worthwhile again. All these handouts only break families apart. No government is "family" friendly. Add to that the removal of child support and spousal maintenance. Cuts down the divorce rate drastically. You want to have kids girls - weigh up the consequences first. No support from the government and none from the father unless you have a proper contract (prenup/Binding Financial Agreement) in place (see answer to Q1) and for goodness sakes women get financially educated and financially independent. And before the bleeding hearts go on about the poor old ladies - go back and consider why their families are not supporting them. Again make the family responsible - not the state. I don't want my income supporting your old granny. Look after your own. And the poor... Do some historical research before you whine about them. Government usurped the role of looking after the truly poor about 80 years ago. Killed an entire industry.

Bottom line get the government out of your life. Vote for "NONE OF THE ABOVE".

Unfortunately we live in a society full of bleeding hearts and meddlers who just love to tell us how we should live our lives. Government is a direct expression of those meddlers and special interest groups.

Simply not going to happen.

 

[Superfly]

Back to the original thread...

Two questions posed:
1. The role of government?
2. Which areas should spending be cut from?

Answer to Q1:
The only role is the enforcement of contract. All others should be done by private enterprise.

Answer to Q2:
Firstly guys - do your homework. Get a copy of the government accounts (all levels of government accounts are available). Sheesh - call yourselves investors; Not! Fundamental research for any company - check their financials. Apply 80/20 rule. Where does 80% of government spending go? Easy answer looking at the accounts: WELFARE.
So simple answer to Q2: get rid of ALL welfare. Make people responsible. Make the family worthwhile again. All these handouts only break families apart. No government is "family" friendly. Add to that the removal of child support and spousal maintenance. Cuts down the divorce rate drastically. You want to have kids girls - weigh up the consequences first. No support from the government and none from the father unless you have a proper contract (prenup/Binding Financial Agreement) in place (see answer to Q1) and for goodness sakes women get financially educated and financially independent. And before the bleeding hearts go on about the poor old ladies - go back and consider why their families are not supporting them. Again make the family responsible - not the state. I don't want my income supporting your old granny. Look after your own. And the poor... Do some historical research before you whine about them. Government usurped the role of looking after the truly poor about 80 years ago. Killed an entire industry.

Bottom line get the government out of your life. Vote for "NONE OF THE ABOVE".

Unfortunately we live in a society full of bleeding hearts and meddlers who just love to tell us how we should live our lives. Government is a direct expression of those meddlers and special interest groups.

Interesting points... agree but not to this extent...

People who use the first home buyers, shouldnt be allowed to then buy an investment property 12 months later, say 5 years later ok... like some guys have that I know, these same guys who have recently got PR and havent even paid taxes in Australia for a long period of time... although Im a property investor so this would hurt me somewhat, I still think its an unfair use of the Australian tax payers money and goodwill...

Agree in part with those last two sentences, except I would say it is the " Rudd Government that is a direct expression of those meddlers and special interest groups "....

 

[lakemac]

more is the pity that government interference tends to grow (exponentially). Whilst my utopia seems impossible the starting point is to pressure your local memeber to repeal legislation - not create yet more.

On the welfare state issue I would be interested in what you don't agree with Superfly. We could open an interesting discussion on the issue.

Might I say at first reading the scrapping of ALL welfare, child support and spousal maintenance appears drastic (I say we give people 12 months to get their affairs in order) what it does do is return to most personal tax payers 80% of the amount taken out as tax. Yes you have to support the oldies if they can't do it themselves but your family and not the government get to decide how to do it. Anything less is Fascism ie. the government forcing you (at the point of a loaded gun none the less) to do what they decide is right.

The government thinks that they (through fundamentally flawed) socalist central planning know better. They can't and don't. Billions are wasted on this kind of communist thinking.

If you also doubt my allegory to a loaded gun, just try not paying your taxes, then defy the court when they eventually get you, then defy the sherrif trying to sequester your assets, then defy the police order to let the sherriff in, then look down the barrel of a Glock semi-automatic hand gun as the police state arrests you AT THE POINT OF A GUN. Do not underestimate it. EVERY government law is enforced by FORCE. Pure and simple.

 

[Sprinter79]

The problem is, is that people will not look after their relatives, take responsibility for children that they have seeded etc.

How are you going to force people to do that? With a gun?

 

[Wysiwyg]

Back to the original thread...

So simple answer to Q2: get rid of ALL welfare. Make people responsible. Make the family worthwhile again. All these handouts only break families apart. No government is "family" friendly. Add to that the removal of child support and spousal maintenance. Cuts down the divorce rate drastically. You want to have kids girls - weigh up the consequences first.

It`s all about money isn`t it.Everyone "gets" money however they can.If it`s offered free then people will take it.Differentiating between the free-loaders and the ones in genuine `need` should see greater government focus.More restrictions on the free-loaders to wean them off the group support teat.

and from my infinite viewpoint .... everything is as it should be.

 

[wildkactus]

Lakemac,
could not agree more.
Social welfare has turned australia into the lazy country not the lucy country (unless your on welfare that is).

Australia should go towards a user pays system. and let the government spend their time and money on the big picture stuff. (defence, infursturcture etc).

Also we could possibly get rid of one tier of governmet.

 

[lakemac]

First point (sprinter79): families not supporting their relatives. If you had made that statement 80-90 years ago you would have been shot (figuratively speaking). Supporting family was the norm before the government started to take away your hard earned cash. Yes there were those that ended up without any support but the thing is they survived:
1. because they were responsible for themselves - there was no social security.
2. there was an entire industry as I mentioned dedicated to helping them.

You don't need to point a gun or have any legislation in this instance. You just totally withdraw the welfare. Those who value family will look after their own. Some won't - that is their karma. Thing is though you are not being forced to support their family. If you choose by want of your beliefs to be philantropic and give to agencies such as the Salvation Army then you have that choice back in (80% tax free) spades. In fact those agencies then vie for your support. They might have to show how efficient they get your donation to the people they support. Get them off government handouts too - much too easy to get slack living off the grants. It will sort out some of the less efficient aid agencies. So no gun, no legislation, just you keeping 80% of your tax and you deciding what you do with it.

Second point (Wysiwyg): money is always "it" as far as the free market goes. The great leveler, the great builder and the great corruptor. The thing is those in "genuine need" can't be defined by central planning and government regulation. Remove the welfare state entirely then let those directly involved with the "genuinely needy" to help them - what ever their circumstance. Rules and regulations just don't cut it - you ALWAYS end up disadvantaging someone. The human condition is a continuous spectrum not some cut and dried rule. Central planning ie. government regulation just doesn't work. Think globally, act locally as the saying goes. Let the free (local) market decide. Those truly in need will get support, those that don't well they have a choice don't they: to be responsible or to languish in a life of their own making. Don't think it will work - it used to 80-90 years ago.

As to more restrictions - that just adds more government red tape. You have to think less. Remove the legislation and the need for restrictions goes away instantaneously. No need to administer a restriction that just doesn't exist. This applies right across the spectrum of daily life. Have any of you actually surfed any of the legislative web sites our government puts out as to how many laws they pass in any given year.

We need less laws not more. Half of our court system is tied up in "victimless" crime. Again I doubt many of you have ever gone down to your local court and sat in the public area to listen to the blunt end of law making. (Required training for any aspiring lawyer I can tell you - very informative).

Fellow investors, turn your data feeds off for a couple of days and experience the world as it is becoming - it is not as cosy as you think.
Oh and when was the last time you had open a trading account - want to know why the government thinks you are a terrorist? Sheesh almost have to leave my left manly bit there as surety I will not be naughty. Sorry master.
(btw: RIP Sanford - they got sold to Commsec now I have to look for a new broker - might try NAB as they still have the IWL software in place, hence my rant about opening new trading accounts - it can't be that hard? can it?).

 

[Sprinter79]

If you totally withdraw the welfare system in order to get families to look after their own, you will have a massive increase in crime... and that will bring all the associated consequences.

Unfortunately, you can't look to the past for this kind of thing, we may well have had an industry based on this in the past, but we ain't got one now. So who is going to look after those with no family assistance? Charities are already crying poor as it is, and do you reckon people are going to be more inclined to give to charity if they have more money? Like ****.

To most people, karma is non-existant. There is no reincarnation for this karma to act on. Unless you follow the Buddist teachings, the whole karma thing is bollocks.

 

[lakemac]

Lakemac,
Australia should go towards a user pays system. and let the government spend their time and money on the big picture stuff. (defence, infursturcture etc).

Also we could possibly get rid of one tier of governmet.

Why stop with one...

Also what big picture stuff? You mention defence, infrastructure etc. Lets take a look at those in turn.
1. defence - ok so why are we paying for defence? Consider this: most, if not all major wars are started by governments or rulers (despotic or otherwise). Rarely are wars started by people per se. Remove the ability of the government to wage war and you get rid of the offensive side for a start. (I am open to anyone who can refute this claim. Currently my research on this topic has not reached anywhere near as deep as it needs to be to give precise information on the topic). But then you say what about "protection"?

Ah yes - different topic. For example - fishing boats from other countries working our waters. Yes we need protection - but not by the government - let private firms (also known as mercinaries) do that job. So if you are a fishing co-op that wants to protect your fish stock from predators then you hire private protection. Yes the cost of that seafood is higher but is it. Take out the cost of government taxes for "defence" and lets see how much the price of seafood changes. When was the last time you needed an F-18 to protect your fish? Again central planning vs local need. We just don't need government. FULL STOP. So lets say you are Poland and have nasty neighbours. What then? Surely you need a defence force. Well no actually because those neighbours are probably being driven by their government and or despotic ruler. What you really need is a private assasin (yes I know that is the pointy end of a gun...) to go and remove the threat. Have you ever considered why our government has never put forward that idea? Of course they wouldn't - Howard or Rudd would become targets. The cease to be targets if they cease to be a government.

2. Infrastructure - ah yes I remember it well - the Sydney Cross City Tunnel, the Lane Cove Tunnel, the cash back scandal for the M4/M5. Yes lets let the government stuff up infrastructure too. They can't do that efficiently either. If you take away the kickbacks and political crap, the figures for things like the Cross City Tunnel just don't add up - they would never be built. On the other hand the M7 ring road is a beacon of success. Why because there was less not more government meddling in the project. Look at any government infrastructure project and it has cost overruns. That is not to say private ones don't, it is just the money "it" in my previous rant will level them very very quickly - and not from my pocket either (unless I invested in them of course - but that is another discussion about learning how to invest wisely). When private enterprise gets it wrong someone else will come in with better ideas or better management and build a better project. And most importantly not at my expense. When government gets it wrong the first thing we get is a royal commission (more waste) then more money poured into a poorly planned project - using my tax money. No thanks. Give me private enterprise all the time. But what about roads, hospitals, police? When was the last time you had to deal with a public hospital? Central planning again - stuffed up beyond belief. Let private run the health system. Go back to private health insurance. Remove the con that is Medicare. Make people responsible again. But what if I am injured. Better hope you have a hospital that has a philantrophic set of doctors... Or get responsible for your own life. Need the police - don't try ringing 000 - they just can't make it (SMH article about a guy bashed at a beach party - six calls and no police). Private security and private detectives are better. Now the only limited role of the government is to enforce the law of contract. You have the right to your own protection and well being. Someone breaks that contract - you get to lock them up. Private goals. You have to love it.