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No, Mr Hockey, the Budget is not fair

  • 19 June 2014

Many Australians, myself included, believed that the Federal Budget was unfair. So Treasurer Joe Hockey's recent speech in defence of its fairness offers a welcome challenge. His argument deserves reflection,

It rests on his understanding of the role of government in society, and so in shaping the budget. In his view the tasks of government are to provide equality of opportunity, to provide a safety net to the most vulnerable, and to encourage individuals to take personal responsibility for their own lives and welfare. These tasks are increasingly compromised today by unsustainably growing costs of education, health and particularly welfare. So the Government needed to address this in the Budget by establishing a framework for cutting costs.

In Hockey's judgment the fairness of the Budget is not to be judged by whether people benefit equally from its provisions but by whether it safeguards equality of opportunity and promotes individual responsibility for all. Those who criticise it for unfairness demand equality of outcome. But this result would itself be unfair. It would entail some people being forced to pay taxes in order that others might retain benefits they do not need.

The Budget provisions most criticised for unfairness, such as changes to youth allowances, co-payment for medical expenses and higher costs for education were fair because all were designed to promote and enshrine individual responsibility.

Although I agree with Hockey's view that the way in which the Government gathers and spends revenue must be reviewed, I am not persuaded by Hockey's argument that the Budget is fair. It rests on too thin a view of the role of government in society.

Governments have a broader responsibility to order society in such a way that the human dignity of each person is respected and the economy serves the good of all. This flows from the mutual dependence of people in society and their consequent responsibility to one another. Taxation and the regulation of institutions that conduce to human flourishing are expressions of government responsibility.

From this perspective the tasks that Hockey ascribes to government are not a complete list. They simply name some aspects of the Government's oversight. A more complete list would include the responsibility to ensure that people enjoy the freedom to develop their life and projects, have access to food, shelter, medical care, education and to work, and are encouraged to take responsibility for their lives.

Because the Government has a responsibility to all its citizens