Even if the Abbott government succeeds in getting its key budget measures passed, the fiscal sustainability challenge still looms menacingly into the future.
Although there are many commentators who have disputed the government's narrative of a "budget emergency", the state of the federal budget matters because it has an important bearing upon the overall size of government.
Commonly, but not uniformly, defined as the share of government spending to gross domestic product, trends in government size are important because they provide insight into the extent to which the public sector reallocates and redistributes resources from the private sector for political purposes.
A relatively greater degree of political reallocation and redistribution is associated with slowing economic growth in the longer term, because of factors such as the imposition of distortionary taxes to finance government spending, the displacement of decision-making made through markets and the focus away from entrepreneurial toward lobbying efforts.
Most of the empirical literature, especially more recent studies relying on better datasets and improved econometric techniques, draws the conclusion that relatively larger government slows down economic growth, and this has significant implications for the achievement of material aspirations ofordinary people.
A slower rate of economic growth means it is more difficult for the unemployed to find a lucrative job, and that is a major problem but slowing growth rates also means people with jobs will find it more difficult to attain the additional income needed to fulfil their dreams and hopes, whatever they may be.
When the economy slows as a result of excessive government, individuals find it more difficult to save for that next bout of education and training, a home, or even their next holiday, and families find they have to, say, forgo some new whitegoods to replace the old ones, buy that extra car, or do the extension on the house.
A recent study by the Parliamentary Budget Office has shown that Commonwealth government spending increased by 3.6 per cent a year over the past decade, in excess of 3 per cent growth in the economy.
If this trend of spending growth exceeding broader economic growth were to continue, this would surely act to further increase the relative size of government, in this context at the federal level, with all the deleterious long-term implications this would entail.
The PBO estimates that the Abbott government's first major response to the recent overspending legacy, namely its first budget, contains various measures which would be expected to save $116.6 billion over the next 10 years.
But the trick is that the government legislates all of its changes, at least in the form as announced in the May budget, and that appears no sure thing.
Even if the original budget measures are passed in full, with the effect of belatedly reducing spending growth (2.4 per cent per annum over 10 years) below that of projected economic growth (3 per cent a year), the ratio of Commonwealth spending to GDP would remain, on average, about the same as recorded over the past decade.
And if no further policy changes were enacted, key elements of federal spending would continue to grow exerting additional fiscal pressure on the budget, and in some cases further exacerbate intergenerational fiscal inequities.
The PBO projects that Age Pension spending will grow by $601 billion over the period 2014-15 to 2024-25, spending on Medicare by $287 billion, aged care spending by $242 billion, an extra $228 billion over 10 years on the Disability Support Pension, and $225 billion in extra federal spending on the states' hospitals.
It is also projected that spending across a wide range of other governmental functions will keep growing, from defence through to corporate welfare, and even the interest bill on the bloated stock of Commonwealth debt will grow by almost $200 billion thereby displacing other, and potentially more productive, forms of spending.
Disconcertingly, an array of spending functions, such as childcare and schools, is likely to still grow faster than overall economic growth over the next decade, and the proposed Paid Parental Leave scheme will projected to add another $64 billion over 10 years to the spending burden.
These trends underline the enormity of the orgiastic expenditure by successive federal governments over the past 10 years, and how even self-proclaimed good budget managers dedicated to resolving Australia's budget emergency can barely restrain themselves from adding to the overall fiscal pressures that future taxpayers will confront.
Some commentators have concluded that if politicians cannot find sufficient expenditure savings to return the budget to balance, or perhaps a modest surplus, then tax rates ought to increase so as to empty the wallets of individuals and businesses more thoroughly for the sake of filling up the public treasury.
For all of its previous "low tax" rhetoric, the Abbott government surprisingly complied with the political agenda for higher taxes, most notably in the form of a "deficit levy" adding 2 per cent to the top personal income marginal tax rate in an attempt to collect an extra $3 billion over four years.
But setting Australia on a journey back to fiscal sustainability by lifting the taxation burden is inherently incompatible with the objective of reducing the size of government, since taxation equips government of the financial means to spend more and that additional taxation dampens private sector economic activities.
The political challenge of reducing government size through spending reductions, and even through the indirect route of lifting economic growth rates and hence GDP, is significant given the influence of constituencies opposing spending cuts and, indeed, economic growth.
As has been most evident in recent months, there is an array of vested interests that will conservatively defend their favoured areas of spending against any reductions, and seemingly regardless of the economic or fiscal circumstances.
But it is also becoming more difficult for reformist politicians to partake in comprehensive measures of deregulation, and similar measures, helping to ensure the growth rate of the economy remains in excess of government spending growth, thus helping to depress the overall size of government.
The objections to economic growth, including those grounded in environmental, inequality, and even "not in my backyard" considerations, are abundant and are gradually dominating the modern policy discourse.
These trends within the political culture are making proposals to reduce government spending and lift economic growth, even the modest Abbott proposals, more difficult to implement, but they must be overcome if the promise of a better future for everyone is to be fulfilled.
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