The Dog’s Bollocks

Truth is like a dog’s bollocks – pretty obvious if you care to look.

Budget surplus to go to private investment

Everything must go!With another $3.6 billion added to the budget surplus John Howard announced that this is for ‘the market’ – another windfall of taxpayers’ money going to private investment funds. The dividends will be used to invest in economic and social infrastructure, presumably after the market has helped itself to substantial profits.

This is Howard’s new model for investment in public infrastructure – we’ll give it private investors and use the profits for the public good. When did the Australian people decide that this is an appropriate use of our taxes? What happened to the old fashioned idea that the government spend our taxes directly for our benefit? Now we are effectively giving it to the market on the presumption that only the profits from this investment are to be used on our behalf. Anyone still remember the market shake down of last week when $186 billion was wiped from the value of the share market? Anyone still remember when Peter Costello lost more than a $1 billion on a dodgy currency trade?

Rather than have $18 billion of public money directly invested in public infrastructure the plan is to invest it and use the proceeds. In a good year presumably, the government will have about $1.8 billion to spend on our behalf while the investment companies take about the same in commissions and earnings. In a bad year, there will be losses, with nothing to spend on our behalf, while investment companies will still add their take on top of the losses.

This is appalling public policy – taking money which needs to be spent on investing in Australia now and gifting it to the market on the promise that we will have access to the future profits. Another illustration that the Howard government’s economic prowess consists of nothing more than the time-honoured Australian tradition of taking a percent of the action – coupon-clipping as an art-form. Brokers will be laughing all the way to the bank while taxpayers are taken for a ride.

Filed under: Ass Hattery, Economics, Politics

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The Dog’s Bollocks

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