Liberal Democrats call for reform and privatisation
Issued 16 August 2010
The Liberal Democrats call on whichever party wins the election to commit to serious reform of the government sector, including privatisation.
Global consulting firm McKinsey and Co has challenged governments to improve efficiency by as much as 15%, a target they believe could be easily achieved. McKinsey states that government sector productivity is significantly less than the private sector, with the taxpayer picking up the tab for this inefficiency.
"15% of government spending at all levels equates to around $63 billion dollars per year. This is $63 billion that doesn't need to be taxed from productive firms and individuals in Australia," said Mark Walmsley, WA senate candidate.
"Consider that $63 billion approximates the total company tax collection. It is also around half of the total income tax take. So we could either cut company tax to zero or reduce income taxes by 50%. Either would have a dramatic impact on productivity and global competitiveness."
The Liberal Democrats have a suite of policies aimed at reducing the size of the government sector, from ending energy subsidies to reforming welfare under our flat tax proposa,l and privatising the ABC.
"I hope voters understand just how much $63 billion is, and therefore the imperative for government to reduce its drag on the economy. We again call on the major parties to adopt our policies and undertake major government sector reform," said Mr Walmsley.
One of the major causes of government sector inefficiency is management. Management Matters in Australia, the government's own report on productivity, shows that on a scale of 1 to 5, the management competence of the Australian government sector was 2.61, behind private companies at 2.86, Australian multinational firms at 3.01, and US global leaders at 3.32.
"To put it in perspective, management in the Australian government sector was less competent than the private sectors of China, Greece, India, Brazil, Ireland, Portugal, Poland, and Italy. It is easy to see where the $63 billion dollars of waste is," Mr Walmsley said.
"This will be no surprise to anyone familiar with how competitive markets work. Markets are an innovation race between companies, with consumers reaping the rewards. In contrast, the government sector is mainly monopolies, including unions having a monopoly on labour. There is no incentive for innovation.
"Government's are quick to smash private monopolies as anti-competitive, yet totally ignore all the government monopolies in health, education, defence and more. When taxpayers and consumers are given real choice, managers are forced to provide greater value. Leave government sector monopolies in place and waste abounds."
"Any politician campaigning for new taxes, new spending or new regulations is stealing from your future living standards to buy your vote now. Don't fall for it.
"The Liberal Democrats will not be announcing new 'spending measures'. Instead we announce that government should take less of your money, and you should be free to spend it as you see fit.
"A critical first step to lowering taxes is for government to privatise or reform itself," Mr Walmsley concluded.