Australian taxpayers bear the cost for Morrison Government’s surplus fetish

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Key points

• Morrison Government’s obsession of achieving a budget surplus is hurting Australian taxpayers
• Morrison Government’s obsession for a surplus can be seen as a commitment to tax the average taxpayer $1,700 more than is necessary
• The concept of good ‘economic management’ in Australia is broken

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Research by the Australia Institute (TAI) shows the Morrison Government’s obsession of achieving a budget surplus is hurting Australian taxpayers. It shows that the Morrison Government is ignoring the consequences of such an economic obsession —leaving Australian taxpayers to bear the burden of less government services, despite paying their taxes.

The report shows that the Morrison Government’s commitment to return to a surplus of at least one per cent of GDP can actually be seen as a commitment to tax the average taxpayer $1,700 more than is necessary to match the value of government services.

“The concept of good ‘economic management’ in Australia is broken. Surplus thinking, primarily the confusion between private profit and a Government surplus, is a symptom of private-sector principles being applied inappropriately to the public sector.”

Dr. Richard Denniss, Chief Economist at The Australia Institute

Dr. Richard Denniss, Chief Economist at The Australia Institute said “The notion that a surplus is always preferable has been accepted uncritically for too long – if the Government is running a surplus that simply means the Government is withdrawing more money from the economy through taxation than it is reinjecting through its spending.” Dr Denniss further stated that The Government’s obsession with generating a budget surplus will do the Australian people more harm than good. In the meantime, the Government is not buying back its debt but intends using surpluses to purchase financial assets from the private sector as is shown in the budget papers.