The government is not Santa

Insights Newsletter
11 October, 2013

It is a sign of maturity when children discover that Santa is not real. There is no fat, bearded man who comes down the chimney and deposits gifts under the Christmas tree. It was their parents all along.

In the same way, every taxpayer must realise that government services aren’t gifts. They are paid for by fellow taxpayers, not a faceless government gifting out of the goodness of its heart.

This is the rationale behind the Australian Treasurer’s commitment to sending every taxpayer a thank-you note and taxpayer receipt, outlining where the government has spent their hard-earned dollars.

Broken down into the budget categories, Australian taxpayers will be informed how much of their tax is spent where.

This year revealed the Australian government assigned a whopping 58% of its budget on social welfare, health and education alone. So perhaps it is timely to consider how much tax goes towards core government functions, and how much is redistributed to other members of society.

With this in mind, while a tax receipt will undoubtedly contribute to a more informed citizenry, it still doesn’t provide the full picture of the interdependent relationship between government and citizen.

If one is to receive a taxpayer receipt, surely they should also receive a taxpayer invoice outlining the costs of all government services that person consumes.

It’s all very well to demand lower taxes for yourself, or higher taxes for others, but such assertions should take into consideration how reliant you personally are on the provision of government services. Is it justifiable for a person who consumes more in services than they pay in tax to demand higher taxes of others?

Likewise, how can a person demanding lower taxes demand more expansive government services in the same breath?

It is important for citizens to realise the extent to which their wealth is either directly redistributed, or the extent to which they enjoy the redistributed wealth of others.

Obviously, quantifying every single public good and service a person consumes would be near impossible. The relationship between government and taxpayer spans across a lifetime, from attending public primary schools to receiving superannuation.

Despite only painting half the picture, a Treasury-issued tax receipt is an important first step in prompting citizens to scrutinise their relationship with government and to realise their personal stake in government expenditure. Hopefully then people will start thinking of the government not as Santa, nor the Grinch, but just like the rest of us, trying to balance a budget.

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