Research Paper no.13 2003-04
Less tax or more social spending: twenty years of opinion
polling
Richard
Grant
Politics and Public Administration Section
24 May 2004
Contents
Executive Summary
Introduction
Opinion pollsshould they be trusted?
Why is the taxsocial services nexus so
important? Politics Electoral factors Public policy challenges
Psychological perspectives Australians preference
for more spending on social services or less tax National
Social Science Survey Australian Election Studies
Australians preferences for public spending and
willingness to pay Rising public concern for
health The nature of public concern for
health Public dissatisfaction with tax
The nature of public concern for tax Conclusion: Political and public policy implications
Summary
Underlying attitudes Trends Behavioural issues
Endnotes
Appendix: Thinking about Australia as a whole, what
are the THREE most important things the FEDERAL GOVERNMENT should
be doing something about?
Tables
Table 1: If the government had a
choice between more spending on social services or less tax, which
do you think it should do?
Table 2: If the Government had a choice between
reducing taxes or spending more on social services, which do you
think it should do?
Table 3: Preference for adjustment to public outlays
(per cent of respondents)
Table 4: Quantitative willingness to pay compared
with tax liability (Mean in $)
Table 5: Preference for adjustment to public
outlays (per cent of respondents)
Table 6: I am very concerned about this
problem
Figures
Figure 1: Estimated actual expenditure for
200304
Figure 2: Total tax revenue as a percentage of
GDP
Figure 3: If the government had a choice between more
spending on social services or less tax, which do you think it
should do?
Figure 4: If the government had a choice between
reducing taxes or spending more on social services, which do you
think it should do?
Figure 5: Willingness of Australians to increase
average spending per taxpayer on existing levels of outlay on
public services
Figure 6: How do you rate these issues?
Figure 7: Standard of health services since [previous]
electionincreased, fallen, stayed the same
Figure 8: Thinking about Australia as a whole, what
are the THREE most important things the FEDERAL GOVERNMENT should
be doing something about?
Figure 9: Thinking about yourself, what could the
FEDERAL GOVERNMENT do that would most benefit you and your
family?
Abbreviations
|
|
NSSS
|
National Social Science Survey
|
AES
|
Australian Election Studies
|
EPAC
|
Economic Planning and Advisory Commission
|
IsssA
|
International Social Science Survey/Australia
|
|
|
Glossary
|
|
hypothecation
|
Earmarking particular
revenues for spending on specific purposes. For example, in the US,
spending on highways is financed from petrol excise
|
public good
|
A product or service where
one citizens consumption does not diminish anothers capacity to
consume; a good where it is not possible to charge consumers for
their use. e.g. defence
|
Keynesian
|
Based on the ideas of
English economist John Maynard Keynes (1883-1946), advocate using
taxspend policies to generate employment and restore economic
equilibrium
|
As an area of inquiry, public opinion on taxation and social
service provision has several levels of interest and application.
There is an obvious democratic interestare the public getting what
they want? There is an associated electoral componentwill supplying
these services deliver votes? There is a behavioural issuewhat does
the survey evidence tell us of citizens personal and societal
priorities? In addition, there is a public policy application given
the demographic challenges facing Western societies.
This paper contributes to all these interests. It presents a
range of polling evidence on Australians attitudes to taxation,
health and social services. The paper is primarily focused on the
trend in polling patterns on the trade-off between less tax and
more social services. It identifies the publics preference for
higher spending on specific items and uses poll data to speculate
on the reasons for these preferences. Public attitudes to tax are
then examined and in particular, the different results elicited on
this issue from differently worded polls. The paper concludes by
noting some of the dilemmas and opportunities that public attitudes
present to governments.
Opinion poll surveys often test the trade-off between less tax
or more spending on social services. This is not surprising. Social
service outlays account for over half of the Commonwealths
expenditure on major items while health accounts for a further 22
per cent. Estimates for the 200304 financial year show that
combined expenditure on social security, aged care, family payments
and health was $112.3 billion out of total expenses of $184
billion. The size of these expenditures reflects the fact that a
large proportion of the population are dependent on these benefits,
either as a supplement to their income or as a principal source. It
also reflects that a high proportion of Commonwealth tax revenue
funds the social services budget. Still, Australia is by
international comparison a low tax country. Total tax revenue as a
percentage of GDP is roughly 30 percent, well below the OECD
average of 37 per cent.
Australian opinion polls of the past 20 years on tax and
spending issues display many of the characteristics identified in
international studies. In terms of taxation, polls show the same
reticence for higher tax as those in other rich democracies. The
polls on tax indicate a keenly self-interested electorate believing
lower tax to be of greater immediate personal benefit than any item
of expenditure. In terms of the trade-off between less tax and more
spending on social services, more people have preferred less tax to
higher social service outlays in all polls since the mid 1980s. In
terms of more spending on social services, there are popular items
such as health services, old age pensions and family benefits, and
unpopular items such as unemployment benefits, single parent
payments and assistance to minority groups. Consistent with several
international findings, most Australian opinion polls show public
acceptance for higher taxes to pay for the popular broad-based
items of health services and old age pensions. Health polls are
unambiguous in the preference for higher spending and better
services, reflecting healths character as an issue of enduring
national, personal and electoral concern. While Medicare is a
popular program there is clearly a base of public support for
public money to be spent on improving the affordability of private
options.
Harold Wilensky has argued that the general contours of public
opinion on taxing, spending and the welfare state have remained
quite stable ever since surveys about these issues have been
conducted.(1) Many Australians, like citizens
elsewhere, have an aversion to higher tax and a general preference
for major in-kind services. That said, on the taxspend nexus, the
polling data reveal significant changes in opinion. During the
mid-to-late 1980s, the public strongly preferred less tax over more
spending on social services. Health and taxation issues ranked
fairly similarly as issues of national and electoral importance.
Over the 1990s and early 2000s, polls on the taxspend trade-off
have recorded progressively higher support for more social services
and correspondingly lower support for less tax (see figure below).
A likely contributor to the Australian trend is the importance of
health as an issue of public concern. Health has been of higher
electoral importance than taxation in the four federal elections
since 1993 and since the early 1990s has progressively replaced
unemployment as the national issue of greatest public concern. The
same surveys found that taxation has, in relative terms, been an
issue of declining electoral concern, particularly since the late
1990s. This paper notes the strength of public sentiment on the
perceived decline in the standard of health services and the shift
in public attention from the cost of private health insurance to
the funding of public hospitals.
Figure: If the government had a choice between more
spending on social services or less tax, which do you think it
should do?

The survey data presented in this paper indicate that the
Australian public holds intelligent opinions on these issues. The
intelligence of public opinion is shown where:
- it quantitatively differentiates between differently worded
questions
there is more acceptability of
higher taxation when polls cite popular expenditures such as health
rather than social services when
asked about the best form of assistance for the individual, less
tax is by far the most preferred option; when asked about the
issues the Federal Government should be doing something about, the
preference for health has progressively increased while taxation
issues have always ranked lowly
- it displays similar trends to similarly worded polls of
different polling organisations
the Morgan Poll, Newspoll,
ACNielsen, Saulwick Poll, UMR Research, the Clemenger Group and
various surveys based at the Australian National University have
all found growing identification over the 1990s and early 2000s
with health as an important issue and as an area deserving of more
public spending
- it is responsive to the wider political environment
since the recession of the early
1990s, Australians have ranked economic issues as progressively
less important and social issues as progressively more
important
polls show that taxation issues
have been of less significance since the introduction of the
GST
negative media publicity on the
public hospital system has probably contributed to survey findings
that respondents believe the standard of health services has
declined since the mid-1990s, and
- it accepts the consequences of its views.
On this last score, public opinion is found wanting. Less
taxation and more spending on health are consistent
findings from separate polls within Australian surveys. The United
Kingdom Commission on Taxation and Citizenship has sought to
explain similar outcomes in British polls. It claimed that there
was a deep sense of disconnection from the taxes people pay and the
public services which these finance.(2) The preference
in different polls by the same respondents for both higher health
spending and less tax may reflect this disconnection: If people
could be sure that the money was genuinely going to improve the
priority public services, they would be willing to countenance
higher taxation.(3) This paper suggests that in the
absence of such assurances, public opinion has preferred financing
options for social services that leave tax levels unchanged, such
as the spending of surpluses, deficit spending or reversing
legislated tax cuts. The closer alignment of the less tax and spend
more outcomes of polls offering this trade-off reflects a
reconciliation of two highly important issues in the public mindtax
and health. In policy terms, resolving these tensions may require
more hypothecation of taxes to finance specific expenditures and
greater reliance on private contributions to pay for health care
and retirement.
Politicians, the
media, interest groups and public agencies often make claims about
the publics desire for either greater spending on health and social
services or a cut in income tax. These issues gain particular
salience in election years as parties seek to justify and sell
their policy offerings, the media defines what it sees as the key
preferences of middle voters and the various interest groups lobby,
partly on the basis of perceived public demands. Public opinion is
always a coveted ally for political parties when selling the need
for higher social spending or tax relief.
The tax or spend issue is often implicit in parties pitch for
(re)election. Pork-barrelling is the modern pejorative for
spendthrift pledges but the practice was well-recognised by
Machiavelli.(4) Political scientists have
written extensively on the catch-all party and median voter
theories in connection with expanding broad-based
outlays.(5) Tax cuts also have a long history of
political appeal and have often been sold in terms of restoring
incentives for employees to work harder and for businesses to
increase investment. Underpinning the relative appeal of both the
spend and tax options is a perception of what is of greatest
political advantage. The presumption of politicians is that people
will vote according to how they stand to benefit. In the words of
George Bernard Shaw: A government which robs Peter to pay Paul can
always depend on the support of Paul.(6) Self-interest
may be a good yardstick for determining public attitudes but it is
wrong to presume this will always be the case. If public opinion is
to be valued as a guide for pledging and acting on the taxspend
nexus, it is worth considering the evidence of opinion polls and,
more particularly, the distinct patterns that emerge from these
polls over time.
Pollsters are acutely aware of the tendency for political
players to presume they know the publics wishes. The founder of one
of Australias largest polling organisations, Roy Morgan, claimed
opinion polls act as an important check on media claims to know
what the public demands. Morgan argued that, by posing a question
to the public, polls focus the public mind on issues and, through
their results, inform politicians and policy makers of the urgency
of these issues.(7) As a result, one cannot make sense
of polling evidence if the political context is ignored. Moreover,
the content, wording and timing of poll questions inevitably means
that pollsters are themselves political players, often responding
to the lead of politicians and the media to gauge public attitudes
on a given issue.
This paper presents and analyses 20 years of polling evidence on
Australians preferences on the trade-off between more spending on
social services or paying less tax. It considers the willingness of
public opinion to increase tax to spend more on particular items.
It also looks at the relative importance of health and tax as
issues of personal and national concern. The aim is to identify
patterns in public preferences on these issues over time.
A few caveats need to be kept in mind with any use of opinion
polling. Public opinion polling as an area of scientific inquiry
has well-known shortcomings. Some have argued that polls are purely
artificial and that in truth public opinion does not
exist.(8) Others have derided issue-based polling,
claiming that the publics attitudes only count in the competitive
struggle for the peoples vote.(9) Perhaps the most
common claim against public opinion is that citizens are either
poorly informed, irresponsible or simply ambivalent about
issues.(10) A well-known American study of the 1960s
concluded that the randomness of respondents answers was as though
one were flipping a coin.(11) Critics contend that if
individual responses in a poll display this irrationality, then
public opinion as a whole must be disregarded.
There have been important qualifications of these arguments. In
his book The Responsible Electorate, V. O. Key argued that
the voice of the people is but an echo, shaped by the clarity of
alternatives presented to it and the character of the information
available to it.(12) Where the information
presented to the public is poor, public opinion does not (and
cannot be expected to) show structure and coherence. A study of 60
years of American polling data by Robert Shapiro and Benjamin Page
found that the American public, as a collectivity, holds a number
of real, stable and sensible opinions about public policy and that
these opinions develop and change in a reasonable fashion,
responding to changing circumstances and to new
information.(13) Others have defended polling surveys as
exceedingly valuable in determining short-range facts about people
and in measuring their attitudes after an issue has produced actual
public opinion.(14) Such commentators claim that for all
the claims of the artificiality of polls, they remain a most useful
tool for political parties to determine public sentiment on
specific policy issues.
Caveats aside, it is possible to trust the findings of polls if
they meet four tests of quality and rationality:
- stable collective responses over time (test 1). Where there are
major discrepancies based on polls with the same question wording
and a random sample of a similar size, there are grounds to doubt
the intelligibility of public opinion. That said, there is a
statistical tendency for the vacillating responses of individuals
over time to cancel out when distributed across the collective
through averaging the long-term preferences of
citizens.(15)
- responsiveness to the wider political environment (test 2).
Where there are major shifts in policy, or a concerted media
campaign either favouring or attributing blame to a group in the
community, it is likely that public attitudes will be affected as
new information and perspectives are brought to bear.
Responsiveness is an important check against the ambivalence of the
electorate to polled issues.
- accepting the consequences of their views (test
3).(16) This is essentially a test of responsibility.
Majority public opinion favouring one option should not
fundamentally conflict with majority opinion favouring
another.
- consistency within polls, where trends in one indicator are
offset by a shift in others (test 4).
The polls presented in this paper test these criteria of
stability, responsiveness, responsibility and internal coherence.
There are polls with the same question wording, which can test
stability over time; there are polls referring to current concern
for specific issues, which can test responsiveness; there are
separate polls in the same survey that determine whether people are
willing to take responsibility for their views; and polls that
measure public attitudes to several variables which can test
internal consistency. By and large, this paper finds that public
opinion satisfies these tests, although there is an important
exception.
The raising and spending of tax is inherently political. In a
democratic system, the levying of taxes is not exclusively the
exercise of power by government over citizens. If the public loses
faith in the tax system, it puts the systems stability and
effectiveness at risk and this, in turn, must affect the operation
of government generally. Former academic and current Minister for
the Environment, the Hon. David Kemp has argued:
A tax system which conflicts with deeply held values and
identifications in the electorate will not secure adequate levels
of support ... and will be a continuing source of political risk
for the government which maintains
it.(17)
One of these identifications, of course, is the issue of where
the money raised from taxation is to be spent. The extent to which
the tax and social security system corrects the inequality of
income should reflect the values and attitudes of the electorate.
Where there is dissatisfaction with the level of redistribution,
there is implicit dissatisfaction with taxation, which can
translate into the devaluing of the institutions that administer
this system and popular resentment against governments and the
recipients of its aid. A taxwelfare backlash has occurred in many
Western countries since the 1970s.(18)
The political importance of the tax-social services nexus is
also a reflection of the size of social service outlays as a
proportion of total Commonwealth expenditure. Estimated actual
outlays for 200304 show that social security, family benefits and
aged care collectively account for 55 per cent of expenses (Figure
1). Health accounts for a further 22 per cent. Moreover, a large
proportion of the population is dependent on these benefits which
are funded largely through direct taxation. Figure 2 shows that
Australia is a low tax country relative to other nations although
200203 tax revenues as a percentage of GDP (31.5 per cent) are at
an historical high. Surveys on the tax-social service nexus
therefore test a key area of government activity and public
involvement.
Figure 1: Estimated actual expenses
for 200304

Source: Budget Paper No. 1, 2004-05.
Figure 2: Total tax revenue as a
percentage of GDP

Source: OECD, 2001.
The taxspend nexus is also important for its electoral context
and perceptions of citizens election preferences. Political parties
of all hues recognise the vote-grabbing potential of pledges for
more spending or for less tax. Traditional theories of economic
voting argue that expansionist policies of a Keynesian type are the
most popular. More recent research identifies a pattern where a
party makes generous spending pledges before an election only to
renege on the grounds of fiscal constraints once
elected.(19) Governments face a dilemma with pre-poll
demands for expansionary fiscal policy from the electorate while
financial markets call for fiscal restraint.(20) There
is some evidence that the Australian public acknowledges and
supports the need for a prudent fiscal approach(21), but
this does not discount voters tendency to favour less tax or more
spending nor the parties efforts to court these preferences.
In future years, several policy challenges will test the
willingness of the Australian public to accept higher levels of
tax, less reliance on state coffers and greater personal
contributions to their own welfare to maintain even current levels
of social service provision. Higher economic and productivity
growth might alleviate some of these pressures but, at some point,
public opinion on the limits of taxing more to spend more will be
tested.
First and arguably the most important public policy issue facing
most Western governments is the challenge of an ageing population.
A February 2004 policy paper by the Australian Treasury has argued
that unless the retirement age is extended and superannuation
arrangements are made more flexible, the Commonwealth Government
would have to substantially raise taxes, cut government spending or
run large budget deficits.(22) The Treasurys precursory
Intergenerational Report found that growth in health, aged care and
pension costs meant that, in 40 years, spending would exceed tax
revenue by five per cent of gross domestic product.(23)
It identified one of the main reasons for this trend as the
advances in medical technology. In a rich society such as
Australias, the lure of purchasing higher standards of medical
technology inevitably raises the question of who should
pay.(24) The question here is whether the incentives to
stay longer in the workforce to maintain the tax base will strike a
chord with the ustralian public. If they do not, the option of
reducing the tax-take will become fiscally impossibletax increases
will be needed simply to maintain existing standards of
services.
A second public policy pressure is continuing inequality in
market wages and whether the Australian public will continue to
support increasing government assistance.(25) In 1983, a
single income family with a dependent spouse and two children under
five, earning two-thirds of average male earnings and renting
privately, received four per cent of their net disposable income
from government transfers. By 2003, these transfers accounted for
46 per cent of an equivalent familys
income.(26) It may be that the inequality in
private incomes will decrease but this is dependent on the future
occupational composition of the labour market. If market inequality
and current policy settings continue, the pressure for accompanying
tax increases will intensify to fund higher transfer payments.
While these two issues are of long-term concern, public opinion
on taxing and spending will also be relevant to other issues, such
as efforts to lower the top marginal rate of taxation, the
financial viability of the private health insurance funds, the
length of waiting lists for public hospitals and ubsidisation of
the Pharmaceutical Benefits Scheme.(27) Support for
other areas of policy expendituresuch as spending on homeland
security and defencewill assume greater relevance in public surveys
as their demands on the public purse increase.
There is also a psychological aspect to the taxspend nexus that
is important for understanding the political, electoral and policy
implications of opinion poll findings. Beginning in the 1950s,
various studies and models of human behaviour noted a fundamental
contradiction between the preferences of private individuals and
the common good. What is best for society is often not the same as
the sum of what is best for individuals.(28)
Opinion polls tend to support this finding. Studies of public
preferences for government services have found that individuals do
not generally base their values on self-interest alone but also on
altruistic beliefs reflecting broader societal
values.(29) This paper recognises that individuals
substantively differentiate between what they believe would be of
most help to themselves against what they believe would be of
greatest benefit nationally.
Psychological perspectives also highlight a basic tension in the
public mind between more spending and less tax. This has been
labelled the more for less paradox.(30)
Individuals want both less tax and more social services.
This paper finds such views reflected in Australians attitudes.
When asked as separate questions, majority opinion favours less tax
and more spending on various items. When pollsters ask individuals
to choose between less tax and more social services, there
has consistently been a sizeable block of support for each. Where
available, there has also been strong support for the status quo
and for avenues such as deficit spending which can temporarily
accommodate both preferences.
A possible explanation for the more for less paradox is that
high indirect taxes lead people to favour higher government
spending because they perceive the cost of government services to
be covered by direct taxation.(31) More specifically,
given that social services are generally funded through general tax
revenue, the actual cost of these services is not clear to the
public.(32) Accordingly, polls often show that public
demands for more government services exceed the capacity of
government to deliver. This paper finds concurrent dissatisfaction
with the level of tax and strong support for more public spending
on major items. This is a fundamental tension in public attitudes
on these issues and an obvious shortcoming of public opinion polls
in the test of responsibility (see p. 4).
Two polling organisations have regularly tested Australians
preference for either more spending on social services or less tax.
Between 1984 and 1990, the National Social Science Survey (NSSS)
based at the Australian National University (ANU) conducted four
polls on the issue.(33) Between 1987 and
2003, a separate group of ANU researchers conducted six
post-federal Australian Election Surveys and a late 2003 survey on
the issue.(34) Put together, it is possible to plot a
trend on Australians attitudes to this question over a 20-year
period.
The pattern of response in Figure 3 shows that public opinion in
the second half of the 1980s strongly supported a cut in tax rates
over spending on social services.Table 1 shows that:
- the lowest aggregate percentage of respondents favouring less
tax was 66.3 per cent in the 1984 poll, while almost 80 per cent
favoured this response in the 198990 poll
- the aggregate percentage of respondents favouring more spending
on social services over less tax fell fairly progressively over the
four polls, recording its highest level of 33.8 per cent of
respondents in 1984 and its lowest level of 19.7 per cent in the
1990 poll
- in all except the 1984 poll, the intensity of support for more
spending on social services declined as the intensity for less tax
increased, and
- the highest percentage of respondents favouring less tax in
each of the four polls opted for very strongly favour less tax; in
all bar the 1984 oll, the highest percentage of respondents
favouring more spending on social services opted for mildly favour
social services.
Figure 3: If the government had a choice between
more spending on social services or less tax, which do you think it
should do?

Source: National Social Science Survey, 19841990
Table 1:
If the government had a choice between more spending on social
services or less tax, which do you think it should
do?
|
1984
|
198687
|
198788
|
198990
|
|
%
|
%
|
%
|
%
|
Very strongly favour less tax
|
30.6
|
34.3
|
26.5
|
38.2
|
Fairly strongly favour less tax
|
22.8
|
22.5
|
25.1
|
24.4
|
Mildly favour less tax
|
12.9
|
17.4
|
20.4
|
16.9
|
Favour less tax
|
66.3
|
74.2
|
72.0
|
79.5
|
Mildly favour social services
|
9.6
|
13.4
|
16.1
|
11.7
|
Fairly strongly favour social services
|
14.1
|
5.8
|
6.6
|
5.5
|
Very strongly favour social services
|
10.1
|
3.3
|
2.6
|
2.5
|
Favour social services
|
33.8
|
22.5
|
25.3
|
19.7
|
Source: National Social Science Survey, 19841990
The pattern of response in Figure 4 shows that public opinion
over the 1990s and early 2000s has increasingly favoured more
spending on social services over less tax. That said, less tax was
the more popular option in all polls.
Table 2 provides a breakdown of the AES surveys according to the
strength of support for each option. It shows that:
- the trend over the five polls was for more spending on social
services. The margin between those wanting less tax and those in
favour of more spending was narrowest in the 2001 survey. The
percentage favouring more social services has nearly tripled since
the 1990 survey
- the number of respondents strongly in favour of less tax is
consistently higher than those mildly in favour
- between 1990 and 1996, the percentage of respondents favouring
less tax was stable. Since 1996, the percentage of respondents in
favour of less tax has fallen sharply from 57 per cent in 1996 to
47 per cent in 1998 to 42 per cent in 2001. Underpinning this fall
is a decline in the percentage of respondents strongly favouring
less tax, and
- a substantial number of people, at least a quarter of
respondents since 1993, have cited depends.
This last point may simply reflect inadequate
information to make a choice. It may also reflect the high
importance that a large number of respondents place on both less
tax and more social services. The same six AES surveys found that
between 80 and 90 per cent of respondents believed that both health
and taxation were important in the election context.
In December 2003, a further survey by the Centre
for Social Research at the ANU was conducted on the trade-off
between less tax and more social services. In this poll the
question changed to: If the government had a choice between
reducing personal income tax or increasing social spending
on services like health and education, which do you think
it should do? [emphasis added]. In response, 48 per cent favoured
increasing social spending while 28 per cent favoured reducing
taxes. This was the first survey in which more respondents
preferred more spending on social services over paying less tax.
The result is consistent with the trend in Figure 4 but the mention
of health and education may have skewed preferences in favour of
increased spending. The next section emphasises the growing
popularity of health as an item deserving of more public
spending.
Figure
4: If the government had a choice between
reducing taxes or spending more on social services, which do you
think it should do?

Source: 19872001 Australian Election StudiesTable 2: If the
Government had a choice between reducing taxes or spending more on
social services, which do you think it should do?
|
1987
|
1990*
|
1993
|
1996
|
1998
|
2001
|
|
%
|
%
|
%
|
%
|
%
|
%
|
Strongly favour less tax
|
43.7
|
35.0
|
37.5
|
40.8
|
33.3
|
27.1
|
Mildly favour less tax
|
21.6
|
22.5
|
18.5
|
16.3
|
13.5
|
14.8
|
Favour less tax
|
65.3
|
57.5
|
56.0
|
57.1
|
46.8
|
41.9
|
Depends
|
19.8
|
31.3#
|
26.8
|
26.1
|
27.5
|
28.5
|
Mildly favour social services
|
7.6
|
7.1
|
10.0
|
9.4
|
12.4
|
14.5
|
Strongly favour social services
|
7.2
|
4.1
|
7.3
|
7.4
|
13.3
|
15
|
Favour social services
|
14.8
|
11.2
|
17.3
|
16.8
|
25.7
|
29.5
|
Source: 19872001 Australian Election Studies
* Responses to 1990 poll ranged from 1 (strongly favour less
tax) to 7 (strongly favour more social services).
# Responses to 1990 poll where the respondents favoured the middle
option (category 4).
This leads us to consider Australians preferences for specific
items of social service spending. Several Australian surveys have
shown that public opinion consistently favours some social service
expenditures over others (see test 1, p. 5).(35) A key
argument of this paper is that within this template, it is the
rising public support for more health funding that has contributed
to the trend in Figure 4. This section presents the evidence.
There have been several Australian studies over the 1990s
examining the willingness of the electorate to pay for specific
goods and services out of taxation. Three findings emerge:
- polls show highest support for the maintenance of levels of
taxation to finance existing levels of expenditure on all major
items of social services. A majority of Australians would support
some increase in personal taxation if this meant that spending on
higher education, health and welfare did not have to face big
cuts.(36)
- Australians have a clear hierarchy for social service items
that should attract more money, ranging from health as the highest
preference to unemployment benefits as the lowest, and
- a comparison of surveys undertaken in 1992 and 2000 suggests
the preparedness of Australians to increase tax to spend more on
these popular items has increased over the 1990s.
The 1992 study mentioned in the latter finding asked respondents
their willingnessin principle and in material termsfor governments
to increase or decrease expenditure on a particular service on the
understanding that increases would have to be paid for through
higher taxation.(37) Table 3 summarises the
results, which show majority support for increases in spending on
health, old-age pensions and family payments. The relative level of
support for these items over the past 25 years has been a common
finding in Australian polls as well as in various international
studies.(38)
Table
3: Preference for adjustment to public outlays
Spending
|
Health
|
Old-age
pensions
|
Family
payments
|
Unemployment
benefits
|
|
%
|
%
|
%
|
%
|
Decrease
|
3.3
|
3.6
|
3.8
|
26.3
|
Same
|
12.3
|
39.2
|
29
|
46.7
|
Increase
|
84.2
|
56.8
|
67
|
26.7
|
Source: Economic Planning and Advisory Commission (EPAC),
NovemberDecember 1992
The study then gauged the willingness of respondents to pay for
this spending relative to existing tax liabilities. Table 4 shows
the annual tax liability in dollar terms per taxpayer for each item
of expenditure compared with the willingness of respondents to pay
for these items. It shows that there was little movement in the
preferred adjustment to outlays on medical and hospital, old-age
pensions and family assistance payments (relative to existing
levels). Despite an overwhelming majority voicing in-principle
support for increasing public health funding, there was no
willingness to pay for this through higher tax.
Table 4: Quantitative willingness to pay compared
with tax liability (Mean in $)
|
Health
|
Old age
pensions
|
Family
payments
|
Unemployment
benefits
|
Liability ($)
|
1649
|
747
|
1104
|
405
|
Willingness to pay (Mean $)
|
1648
|
777
|
1064
|
352
|
Mean Adjustment (%)
|
|
4
|
4
|
13
|
Source: EPAC, NovemberDecember 1992
A 19992000 study conducted by the International Social Science
Survey/Australia (IsssA) also elicited Australians preferred items
for spending and their willingness to pay.(39) It asked:
Do you think governments, both federal and state, should spend more
or less on their activities, bearing in mind all the benefits that
flow from those activities?. Table 5 shows that a clear majority
favoured more spending on hospitals and health. A narrow majority
favoured more spending on education, slightly less than half
favoured more spending on aged pensions and only 16 per cent opted
for more spending on social welfare. As in 1992, the Australian
public clearly ranked health as the first preference for increased
outlays.
Table 5: Preference for adjustment to public
outlays
|
Healthmedical
|
Hospitals
|
Age
pensions
|
EducationSchool
|
Social
welfare
|
|
%
|
%
|
%
|
%
|
%
|
Decrease
|
3
|
2
|
4
|
4
|
36
|
Same
|
33
|
22
|
49
|
45
|
48
|
Increase
|
64
|
76
|
47
|
52
|
16
|
Source: IsssA, 19992000
The IsssA survey also showed respondents the current average
cost per taxpayer on each item of expenditure and asked by how much
spending should increase or decrease. On average, respondents
wanted the medicalhealth budget to increase by 25 per cent,
hospitals and the age pension by 20 per cent, and the social
welfare budget to be cut by 10 per cent. Figure 5 shows this is a
significant change from the 1992 survey. These surveys suggest that
over the 1990s there has been:
- a strong increase in public support for higher spending on
health and old-age pensions, and
- a strong increase in the popularity of spending on health,
education and old-age pensions relative to previous support for
other areas of spending such as roads, defence and the
arts.(40)
Figure 5:
Willingness of Australians to increase average spending per
taxpayer on existing levels of outlay on public
services

Source: EPAC, 1992 and IsssA, 19992000
* There is no
bar for medical and hospital for 1992 given public opinion was
unwilling to increase outlays (see Table 4). For the 2000 survey,
an average is used for the categories healthmedical and
healthhospitals and for educationschools and
educationuniversities.
Various polls support the 2000 IsssA survey findings:
- in 1998, an ACNielsen poll asked whether people would be
willing to pay an extra one or two cents in the dollar in extra
income tax to fund various outlays. In the areas of health,
education and aged care, nearly 50 per cent (4849 per cent)
favoured increased spending through higher income tax; 33 per cent
favoured keeping spending the same(41)
- in August 2001, an ACNielsen poll found 43 per cent of
respondents preferred a budget surplus to be spent on health, while
27 per cent wanted it spent on education and 19 per cent wanted it
spent on tax cuts(42)
- in April 2003, a survey by UMR Research found 41 per cent would
support an increase in the GST from 10 to 15 per cent if it results
in more services in health and education; 24 per cent supported a
rate of 15 per cent if it results in a significant personal income
tax cut.(43)
- in June 2003, a Newspoll responding to the federal budget found
that 77 per cent of respondents would prefer the announced tax cuts
to be spent on improvements in health and education; only 20 per
cent opted for the tax cuts(44)
- in November 2003, an ACNielsen poll found 88 per cent of
respondents would be willing to pay more for prescriptions and
higher taxes if the money goes to health and medical
research(45)
- in December 2003, the Australian Survey of Social Attitudes
found 68 per cent of respondents were willing to pay higher taxes
to spend more on health and Medicare; only 28 per cent of
respondents were unwilling.(46) Those under 50 and those
working full time record stronger support for less tax than
respondents in the 50+ age bracket.(47)
- in January 2004, Newspoll found that 72 per cent of respondents
would prefer a large budget surplus to be spent on health and
education over personal tax cuts; only 9 per cent of respondents
favoured tax cuts(48).
- in March 2004, the National Welfare Rights Network released a
poll showing that most Australians would forgo a weekly $5 tax cut
if the money was spent on health, education and social services,
and(49)
- In April 2004, an ACNielsen poll found 72 per cent of
respondents were willing to forgo a $10 a week tax cut if the money
were spent on social services.(50)
Figure 6 reveals the high and increasing importance of health
over the 1990s and early 2000s. The survey presented respondents
with a list of public concerns and asked how do you rate these
issues?(51)
Figure 6: How do you rate
these issues?

Source: Newspoll, 19902004. Note that the graph range is
from 50% to 90%.
Figure 6 shows that:
- health has been the only issue (of the four) that has increased
in importance over time
- in October 2003, health was rated as important an issue as
unemployment had been in the early 1990s (when the jobless rate was
over ten per cent), and
- between September 1998 and February 2004, the rating for health
has increased from 74 per cent to 81 per cent while the rating for
taxation has fallen from 71 per cent to 53 per cent. The falling
rating of tax may reflect the perception that tax issues were no
longer of high significance following the introduction of the GST
(see test 2, p.5).
The evidence so far indicates that strong public preference for
health is the main factor driving the increasing support for more
social services over less tax (Figure 4). Less tax and more health
spending are clearly both popular. The 1980s NSSS surveys,
for example, found 6679 per cent support for less tax over more
social services (Figure 3); a separate question to the same
respondents in each of these four surveys found between 57 and 70
per cent to support more spending on health. What, then, explains
the publics apparent willingness in recent polls to pay higher tax
to spend more on health?
One possible explanation is that in times of strong economic
growth and rising real wages, the public sees economic issues as
less important than the benefits they receive from in-kind public
services such as health and education.(52) They are
better able and willing to pay for these services in buoyant
economic times. The information in the Appendix would therefore
indicate that, since 1992, Australians have ranked economic issues
as progressively less important and social issues as progressively
more important (see test 2 and test 4, pp. 56).
A more convincing explanation, perhaps, can be drawn from the
information in Figure 7, which shows that many Australians believe
the standard of health services has declined since the mid-1990s.
It is difficult to know whether the belief that health standards
have fallen has caused more respondents to rate health as highly
important or whether the belief that health is important has led
them to take a more critical view of existing health standards. The
media have tended to report negatively on the state of public
hospitals and Medicare.(53)
Figure 7:
Standard of health services since [previous] electionincreased,
fallen, stayed the same
![Figure 7: ‘Standard of health services since [previous] election’—increased, fallen, stayed the same](/binaries/library/pubs/rp/2003-04/04rp13-8.gif)
Source: AES, 1998 and 2001; ASSA, 2003
This publicity has probably influenced public opinion (test 2,
p. 5). Recent polls find that Australians are increasingly
concerned with the state of the public hospital system. Surveys
among 50 Australians in 1997 and 2002 identified a set of 40 issues
that were of greatest public concern. These issues were then
presented to a large sample of respondents for ranking. Table 6
presents the evidence:
- in 1997, 68 per cent of those polled ranked the cost of private
health insurance for inadequate benefits as an issue they were very
concerned about. This was the issue of fifth greatest concern in
1997 but fell to 36 out of 40 in 2002
- in 2002, 70 per cent of respondents ranked the closure of
hospitals and declining numbers of hospital beds as an issue of
great concern. This was the third most important issue of the 2002
survey, and
- in 1997, 64 per cent of respondents mentioned the issue of no
gap cover, but this was not mentioned in the top 40 problems in
2002.
Table 6: I am very concerned about
this problem
Issue |
1997
Survey
(per cent)
|
2002
Survey
(per cent)
|
Rank
(/40) 1997
|
Rank
(/40) 2002
|
Private health insurance benefits being costly but seeming not
to deliver adequate benefits |
68
|
46
|
5th
|
36th
|
Health insurance not covering gap |
64
|
-
|
13th
|
-
|
Closure of hospitals and declining numbers of hospital
beds |
54
|
70
|
33rd
|
3rd
|
Source: Silent Majority Surveys III and IV. The
problems are based on qualitative research with group discussions
among 50 people. A questionnaire format was then composed
(identical in 1997 and 2002) for quantitative research using
telephone interviews among 750 people nationally. It asked
respondents to rate each of the problems on a four point scale: a.
this is not a problem to
me; b. I am a little
concerned about this problem; c. I am quite concerned about this
problem; d. I am very
concerned about this problem. The table records three of the
problems that respondents were very concerned about.
Table 6 might indicate that the public approves
of measures to improve the affordability of private health
insurance. The 1990 AES survey found 90 per cent of respondents
supported the principle of private health insurance with 75 per
cent of these advocating private treatment in public hospitals. A
1998 Morgan poll recorded 70 per cent support for the idea of a
private health insurance rebate to improve the affordability of the
private funds.(54)
However, Medicare is also very popular and has been since its
introduction 20 years ago. An indication of this popularity is
found in AES polls asking which party has the preferred health
policy. In five of the six election surveys since 1990, Labor has
ranked higher than the Coalition. To some extent, Labor is probably
preferred given the public perception it will spend more on health.
But it is also likely that these polls reflect strong preference
for retaining Medicare. The margin between the parties was greatest
in 1993 when there was uncertainty whether a Coalition government
would retain Medicare. In 1996, when the Coalition assured that
Medicare would remain in addition to support for private health
insurance, support for the Coalitions health policies was equal
with that for Labor.
The story so far is that Australians preference for less tax
over more spending on social services during the 1980s has been
reversed since the early 1990s primarily because of rising public
concern for spending on health. Polls indicate a preparedness to
accept some higher level of tax to fund increased health
expenditure. However, the public is happiest when the extra funds
can be found without tax increases. These avenues include spending
the money from budget surpluses or from forgoing tax cuts. The most
favoured option for governments is to finance higher public outlays
through the higher tax receipts received from economic growth.
Economic growth satisfies the publics demand for more spending, the
financial markets demands for fiscal prudence, and allows
governments the scope for tax relief.
Higher tax has never been a popular option, even for funding the
most worthy expenditure items. Figure 4 shows that where health and
education are not mentioned specifically, less tax is a
consistently higher preference than more social services. Polls
asking directly about the level of existing tax (relative to
previous levels) without asking about social services invariably
raised levels of dissatisfaction:(55)
- a 2001 Saulwick Poll found 61 per cent of respondents believed
that Australians are paying more tax than they used
to(56)
- the 1998 and 2001 AES surveys found 47 per cent and 60 per cent
of respondents respectively agreed that taxes had increased since
the previous federal election
- the 2003 Australian Survey of Social Attitudes found 75 per
cent of respondents believed that taxes had increased over the
previous two years(57)
- a 2003 ACNielsen survey commissioned by the Centre for
Independent Studies found that substantial numbers of people
believe that the current levels of income tax are unfairly high.
Even when asked to consider tax levied on a single person earning
$120 000 per annum, 45 per cent said it was too high, 45 per
cent said it was fair and less than 10 per cent said it was too
low,(58) and
- a January 2004 Newspoll found a majority believed the current
rate of 47 cents in the dollar for income earned over $62 500 was
too high.(59)
These findings do not augur well for those (same)
citizens demanding spending increases on major public items, or for
governments seeking to deliver on these demands. The official data
does support majority opinion that tax levels have increased;
Commonwealth tax as a percentage of GDP is at record high levels
(25.8 per cent in 200203) while the GST component has increased
from 3.6 per cent of GDP in 200001 to 4.1 per cent in
200203.(60) Still, there is evidence that the public
opinion on issues of tax and spending fails to understand the
consequences of their choices. This relates to the test of
responsibility (test 3, p. 6).
Opinion polls indicate that the nature of public concern for
health is qualitatively different than concern for tax. It was
noted earlier that peoples opinions are generally a mix of
self-interest and altruism (see p. 7). A high-income earner with
private health insurance may not benefit directly from Medicare but
may be prepared to incur some increase in personal income tax to
improve societal welfare. Whether private attitudes reflect
self-interest or the public interest depends heavily on the
question asked and the issues involved, as evidenced in Morgan
polls over the past 20 years.
Between February 1982 and October 2001, Morgan Research
conducted surveys asking two questions of respondents. The first
was pitched in national terms: Thinking about Australia as a whole,
what are the three most important things the federal government
should be doing something about? The second question directed
attention to the respondent: Thinking about yourself. What could
the Federal Government do that would most benefit you and your
family?(61) Figures 8 and 9 show very different
aggregate responses to these questions.
Figure 8:
Thinking about Australia as a whole, what are the THREE most
important things the FEDERAL GOVERNMENT should be doing something
about?

Source: Morgan Poll 19822003. Responses to
question are unaided.
The Morgan organisation only presents a breakdown of the taxation
category for polls since February 1999. The issues within the
taxation category are lower taxes, tax reform, no GST and other
taxation issues. In these six polls, the percentage citing lower
taxes ranged between 3 per cent and 6 per cent. See http://www.roymorgan.com/news/polls/2003/3635/
Figure
9: Thinking about yourself, what could the
FEDERAL GOVERNMENT do that would most benefit you and your
family?

Source: Morgan Poll 19822003. Responses to question are
unaided. Note that this Figure has a different scale to Figure
8.
* The Morgan organisation presents a breakdown of the category
taxation issues for the six polls since February 1999. The issues
within the taxation category are lower taxes, tax reform, no GST
and other taxation issues. In these six polls between February 1999
and May 2003, lower taxes was the highest sub category accounting
for 18% (29%), 15% (26%), 12% (25%), 13% (30%), 15% (25%) and 26%
(34%) [totals in brackets]. See http://www.roymorgan.com/news/polls/2003/3635/
Figure 8 shows that:
- as an issue of national importance, the ranking of tax has been
staticbetween 10 and 20 percent since the early 1990s
- health has been of increasing national concern over the 1990s,
mentioned by fewer than 10 per cent of respondents in 1990 and more
than 60 per cent in May 2003,(62) and
- unemployment is the issue that Australians are most sensitive
to as a national concern. Aggregate responses closely follow the
trend in the national unemployment rate.
Figure 9 shows that tax consistently ranks higher
than social welfare, health and unemployment as an issue of
personal concern. Over the 20-year period, it was listed by an
average of 25 per cent of respondents compared with only 7 per cent
citing health. Between March 2001 and May 2003, however, the
mention of health as an issue of personal benefit increased from 7
per cent to 22 per cent of respondents.
It seems that the cyclical component identified in Figure 6 and
again in the Appendix is somewhat misleading when it comes to tax.
Fluctuating concern for the economy is linked more closely to
concern for unemployment than tax. Although Figure 6 indicates
falling public concern for taxation relative to other issues,
Figure 9 shows tax relief is an issue of strong and
ongoing appeal for the electorate. As Treasurer the Hon. Peter
Costello has remarked:
I have never, ever come across anybody in 13
years of public life who believes they should pay more tax. Ive
come across a lot of people who think somebody else should pay more
tax.(63)
The more precise issue was observed by the Hon. Fred Chaney when
he was Minister for Social Security:
We in Australia are very strong on public
morality. The Government ought to do this, they ought to do that.
We are not quite as strong when it comes to private obligations. I
ought to pay for this. My taxes should be increased for
that.(64)
This paper has shown that opinion poll findings tend to be
contradictory with majority demands for higher spending on health
and aged care yet a majority rejects that even the wealthy can
afford to pay. Even though polls have measured an increase in
public willingness to pay higher tax to finance more health
spending, it cannot be assumed that voters will act according to
this preference when casting their votes.(65) The polls
themselves may be misleading. Some pollsters and journalists have
argued that telephone surveys understate the true level of public
support for less tax because people do not want to appear too
selfish.(66) Moreover, as public support for more social
services has been more widely publicised, it is more likely that
responses will reflect the mood of the moment rather than actually
reflect private opinions.(67)
The sensitivity of higher tax as an electoral issue presents
obvious problems for politicians, political parties, policy-makers
and governments. Opinion poll findings and public policy both point
to the need for some level of higher spending and, therefore,
higher tax. In an electoral setting it is easy for political
opponents to attack spending proposals as fiscally irresponsible or
dependent on undisclosed tax increases.(68) Upfront
proposals for higher tax rarely pass electoral muster.
Policy-makers generally support hypothecated taxes because they
draw a link for taxpayers between the cost and benefit of an item.
The problem with these taxes is that they generally work only for
small expenditures, rather than the major spending needed for
health, retirement and aged-care.(69) The Medicare levy,
for instance, covers only 17 per cent of total Commonwealth health
expenditure. It is not surprising that taxpayers like Medicare
because the benefits they receive far outweigh the cost of the
levy. It is estimated that the Medicare levy would need to increase
from 1.5 per cent to 8.7 per cent to fully fund health
expenditure.(70) The short-term options are to roll the
levy into the income tax schedule or to take a political risk and
substantially increase the Medicare levy.(71)
The long-term issue for governments facing spiralling health
costs is not necessarily one of taxspend. Perhaps the most
appealing optionboth politically and financiallyis to subsidise
health through an increase in the superannuation guarantee. This
could be sold to the public as an increase in the level of personal
saving rather than a higher levy, and unlike a higher levy would
ensure the individual benefited directly.(72)
This papers finding of greater public support for more social
spending in Australia probably reflects the need to redress the
perceived decline in health service standards, rather than a
recognition of the need to address pressures associated with
long-term demographic challenges. A key future test of public
opinion in the longer term is whether it accepts the size of the
tax increases or spending cuts required to accommodate an ageing
population, a shrinking tax base and new medical technologies. Much
will depend on strong economic growth, political salesmanship in
ear-marking taxes for popular items, continued cuts to upper-income
welfare and further encouragement for private health insurance,
voluntary superannuation contributions and extending the retirement
age(73). Bi-partisan recognition of these challenges is
an important bulwark for influencing public opinion.
- Australians have shown a clear preference for public spending
on health (medical and hospitals), aged pensions and family
payments.
- Australians appear to be strongly self-interested when it comes
to tax.
when asked
about the best form of federal assistance for the individual, less
taxation is by far the most preferred option.
when given
the choice of less tax or more social services, less tax has been
the preference of more Australians in each survey of the past 20
years.
- Australians like Medicare but value the option of affordable
private health insurance. High levels of support for more spending
on health reflect both attitudes.
- Over the past 15 years, Australians have increasingly favoured
more social services over less tax. Though less tax remains the
higher preference, the gap between these options has progressively
narrowed over the 1990s and early 2000s.
- This trend is underpinned by the increased importance of health
as an issue of concern since the early 1990s. Health has
progressively replaced unemployment as the issue of key
concern.
- Australians have viewed economic issues as less important and
social issues as progressively more important over the 1990s and
early 2000s (see Appendix).
- There is some evidence that Australians have increasingly
viewed public funding for hospitals as an issue of greater concern
than the cost of private health insurance and the availability of
gap cover.
- There is polling evidence of a commensurate willingness to pay
higher taxes for increased spending on health services.
- Opinion polls indicate that Australians are prone to the more
for less paradox. Less taxation and more spending on
health are consistent findings from separate polls within
Australian surveys. There is little evidence that respondents
accept responsibility for the consequences of their views on these
issues.
- There is more acceptability of higher taxation when polls cite
popular expenditures (such as health) rather than other social
services. It is likely that reference to the term social services
heightened support for less tax in polls over the 1980s, given
public support for closer targeting of welfare
expenditures.(74)
- The most popular option is to finance higher outlays on public
goods like the public health system through spending surpluses,
deficit spending or reversing legislated tax cuts.
- A government which cuts taxation while eroding the standard of
health, aged care and education services is unlikely to have the
support of public opinion.
- H. Wilensky, Rich Democracies: Political Economy,
Public Policy and Performance, University of California Press,
Berkeley, 2002, p. 372.
- The Commission on Taxation and Citizenship, Paying for
progress: A new politics of tax for public spending, Fabian
Society, London, 2000, p. 3.
- ibid.
- N. Machiavelli, The Discourses, Book III, (translation
of Leslie J. Walker with revisions by Brian Richardson), Routledge
and Kegan Paul, London, 1950. Machiavellis Discourses
recalled the tactics of an ambitious man in ancient Rome who
ingratiated himself with the plebs by conferring on them many
benefits. p. 493
- See, for example, A. Downs, An Economic Theory of
Democracy, Harper and Row, New York, 1957; G. Tulloch, The
Vote Motive, Institute of Public Affairs, London, 1976; G.
Stigler, Economic competition and political competition, Public
Choice, vol. 12, 1972, pp. 91106.
- George Bernard Shaw cited in A. Partington (ed.), The
Oxford Dictionary of Quotations, Oxford University Press,
Oxford, 1992, p. 636.
- Roy Morgan, Public opinion polls only measure public opinionTo
save Australia hard decisions still have to be made, Morgan Poll
Compendium, Australian National University, Canberra, 1985.
- P. Bourdieu, Public opinion does not exist, in A. Mattelhart
and S. Siegelaub (eds.), Communication and Class Struggle,
International General, New York, 1979, pp. 12430.
- J. Schumpeter, Capitalism, Socialism and Democracy,
Allen and Unwin, London, 1976.
- J. Hochschild, Whats Fair?, Princeton
University Press, Princeton, 1991 and J. Zaller, The Nature and
Origins of Mass Opinion, Cambridge University Press,
Cambridge, 2001, pp. 5961.
- P. Converse, The Nature of Mass Belief Systems in Mass Public,
D. Apter (ed.), Ideology and Discontent, Free Press of Glencoe, New
York, 1964, p. 243 and p. 245.
- V. O. Key, The Responsible Electorate: Rationality in
Presidential Voting 193660, Belknap Press of Harvard,
Massachusetts, 1966, pp. 2, 7.
- B. Page and R. Shapiro, The Rational Public: Fifty Years of
Trends in Americans Policy Preferences, University of Chicago
Press, Chicago, 1992, p. 1.
- L. Doob, Public Opinion and Propaganda, Holt, New
Jersey, 1948, p. 159.
- T. C. Schelling, Micromotives and Macrobehaviour,
Norton, New York: 1978, pp. 2527. See also Page and Shapiro, op.
cit., pp. 1516.
- D. Yankelovich, Coming to Public Judgement: Making
Democracy Work in a Complex World, Syracuse University Press,
Syracuse, 1991, p. 24.
- D. Kemp, Taxation: The Politics of Change, in J.
Wilkes (ed), The Politics of Taxation, Proceedings of the
46th Summer School of the Australian Institute of Political
Science, Hodder & Staughton, Sydney, 1980, p. 278.
- See Wilensky, op. cit., Chapter 10.
- J. Dullard and D. Hayward, The democratic paradox of public
choice theory: The case of the Costello cuts, Journal of
Australian Political Economy, vol. 42, December 1998, pp.
1647.
- R. Eccleston, The fiscal-electoral nexus in Australia, 197694,
Australian Journal of Political Science, vol. 33, no. 2,
p. 277.
- R. Grant, Reflections on public support for the neo-liberal
agenda in Australia: Media, partisan and poll-based reactions to
federal budgets, 19752000, Unpublished.
- Commonwealth of Australia, Australias demographic
challenges, The Treasury, February 2004.
- Commonwealth of Australia, Intergenerational Report
200203, Budget Paper 5, 2002. It should be noted that the
Intergeneration Report is regarded as a bad-case scenario. Critics
argue that the Report only takes into account the negative effects
of current spending on future generations and ignores projections
of the positive effects of current spending on health care,
education and economic infrastructure. See Implications, Budget
200203, Information and Research Services, Parliamentary
Library, June 2002, p. 27.
- ibid.
- See M. Keating, The labour market and inequality,
Australian Economic Review, vol.36, no. 4, 2003, pp.
123.
- M. Keating, The Case for Increased Taxation, Policy
Paper No. 1, Academy of the Social Sciences in Australia, Canberra,
2004.
- There are three pressures likely to increase the cost of the
Pharmaceutical Benefits Scheme (PBS). The first is that an ageing
population will demand a wider range of subsidised new medicines.
The second and closely associated pressure is that new medicines
are likely to be more expensive, particularly early in their
cost-cycle. The third cost pressure is that the PBS will probably
lose some of its bargaining power in dealing with big
pharmaceutical companies, with American drug companies demanding
greater access to the Australian market. See A. Mitchell, Savings
breathe life into health care, Weekend Australian Financial
Review, 2326 April 2004, p. 66.
- L. Lewin, Self-Interest and Public Interest in Western
Politics, Oxford University Press, Oxford, 1991, p. 9.
- S. Kemp, Public Goods and Private Wants: A Psychological
Approach to Government Spending, Edward Elgar, Northampton,
2002, p. 165.
- S. Welch, The more for less paradox: public attitudes on taxing
and spending, Public Opinion Quarterly, vol. 49, no. 3,
1985, pp. 3106. See also A. Furnham and A. Lewis, The Economic
Mind, Harvester, Brighton, 1986, p. 229.
- J. S. Mill, Principles of Political Economy, W. D.
Ashley (ed.), Longmans, Green and Co., London, 1909.
- S. Kemp, op. cit., p. 165.
- J. Kelley, Clive Bean and Mariah Evans (principal
investigators), National Social Science Survey,
198485, Reark Research Pty Ltd (urban sample, 1984)
and the National Social Science Survey, Australian National
University, SSDA Study No. 423, NSSS First Round 1984; J. Kelley,
Clive Bean and Mariah Evans (principal investigators), National
Social Science Survey, 198687, Reark Research Pty Ltd and the
National Social Science Survey, Australian National University,
SSDA Study No. 620, NSSS 19861987: Role of Government; J. Kelley,
Clive Bean and Mariah Evans (principal investigators), National
Social Science Survey, 198788, Reark Research Pty Ltd
and the National Social Science Survey, Australian National
University, SSDA Study No. 627, NSSS 19871988: Inequality; J.
Kelley, Clive Bean and Mariah Evans, National Social Science
Survey, 19891990: Family and Changing Sex Roles, Australian
National University.
- I. McAllister and A. Mughan, Australian Election Survey, 1987
[machine-readable data file]. Data collected by A. Ascui. Canberra:
Roger Jones, The Australian National University [producer], 1987.
Canberra: Social Science Data Archives, The Australian National
University [distributor], 1987. 1 data file (1829 logical records)
and accompanying users guide; I. McAllister et al. Australian
Election Survey, 1990 (computer file).Principal Investigators Ian
McAllister, Roger Jones, Elim Papadakis, David Gow. Canberra:
Social Science Data Archives, Research School of Social Sciences,
The Australian National University (producer), 1990. Canberra:
Social Science Data Archives, The Australian National University
(distributor), 1990 1 data file (2 037 logical records) and
accompanying users guide; R. Jones, Ian McAllister, David Denemark,
David Gow, Australian Election Study, 1993 (computer file).
Canberra: Social Science Data Archives, The Australian National
University, 1993; R. Jones, Ian McAllister, David Gow, Australian
Election Study, 1996 (computer file). Canberra: Social Science Data
Archives, The Australian National University, 1996; C. Bean et al.
Australian Election Study, 1998 (computer file), Canberra: Social
Science Data Archives, The Australian National University, 1998; C.
Bean et al. Australian Election Study, 2001 (computer file),
Canberra: Social Science Data Archives, The Australian National
University, 2001.
- See R. Smith and M. Wearing, Do Australians want the Welfare
State?, Politics, vol. 22, no. 2, 1987, pp. 5565.
- A 1996 AGB McNair poll found that 60 per cent of respondents
would support some increase in personal taxation if this meant that
spending on higher education, health and welfare did not have to
face big cuts.
- G. Withers, D. Throsby and K. Johnson, Public Expenditure in
Australia, Economic Planning and Advisory Commission, Paper no. 3,
Australian Government Publishing Service, Canberra, 1994.
- See S. Kemp, op. cit., Chapter 7.
- The International Social Science Survey (IsssA) is the umbrella
polling organisation of which the NSSS is a member. The results of
this survey were taken from The budget, the election and the voter,
Australian Social Monitor, vol. 4, no. 1, June 2001, pp.
914.
- It is likely that the public would be willing to support higher
outlays in defence since the increase in acts of terrorism since
2001.
- See E. Baldry and T. Vinson, The current obsession with
reducing taxes, Just Policy, no. 13, 1998, pp. 39.
- http://www.abc.net.au/7.30/content/2001/s347790.htm
- GST and Tax, UMI Research Pty Ltd, 2428 April 2003.
- http://www.uq.edu.au/economics/johnquiggin/news/Budget0305.html
- 4Raise health spending: poll, Canberra Times, 1 March
2004, p. 1.
- R. Gibson et al., The Australian Survey of Social
Attitudes, Australian Social Science Data Archives, Canberra,
Australian National University, 2003.
- T. Breusch and S. Wilson, After the tax revolt: Why Medicare
matters more to middle Australia than lower taxes, Australian
Journal of Social Issues, Vol. 39, No. 2, May 2004,
p.104.
- Newspoll and The Australian, 1518 January 2004; See
www.newspoll.com.au
- B. Ruse, More welfare funding put before $5 tax cut, West
Australian, 27 March 2004, p. 50.
- M. Grattan, Tax cuts not an automatic winner: poll, The
Age, 28 April 2004, p. 1.
- The issues were education, health/Medicare, unemployment,
environment, family issues, welfare, taxation, leadership, interest
rates, inflation, defence, womens issues, industrial relations,
immigration, aboriginal issues, balance of payments and foreign
investment.
- Data from the December 2003 Quarter of National Accounts shows
that average real wages have increased from $722 in March 1990 to
$766 in March 1996 and $867 in December 2003.
- See, for example: B. Hickman, Doctors feel weight of
frustration, The Weekend Australian, 1 May 2004, p. 21; R.
Yallop, A national state of emergency, The Australian, 4
May 2004, p. 7; J. Kelly et al., Despair, agony on the frontline,
Herald Sun, 29 April 2004, p. 5.
- See M. Wooldridge, Hansard, House of Representatives, 12
November 1998, p. 265. In the First Reading of the Private Health
Insurance Incentives Bill, Minister for Health The Hon. Michael
Wooldridge claimed that the policy was at one with public
opinion:
Australians value a mixed system of public and private health care
.... Australians value choice and this Government recognises the
contribution that Australians wish to make to their own health
care.
In similar vein, he later claimed:
[T]his is a tax cut. We are making private health insurance tax
deductible. That is what the public want, so that is what we are
going to give them. M. Wooldridge, Hansard, House of
Representatives, 23 November 1998, p. 374.
- There are obvious parallels between these polls and the surveys
asking about standards of health services (Figure 5). In the
absence of a choice between two competing options, both types of
survey elicit respondents grievances.
- Snapshot of a nation, The Age, 8 October 2001, p.
5.
- R. Gibson et al, op. cit.
-
Low: A
single person with no dependents who earns $30 000 a year loses
about 20 per cent of this ($5 830) in taxes and levies. In your
view is this tax deduction (a) unfair (they should pay less); (b)
fair and reasonable; (c) unfair (they should pay more)?
Medium: A single person with no dependents who earns $60 000 a year
loses about 30 per cent of this ($17 080) in taxes and levies. In
your view is this tax deduction (a) unfair (they should pay less);
(b) fair and reasonable; (c) unfair (they should pay more)?
High: A single person with no dependents who earns $120 000 a year
loses about 40 per cent of this ($46 780) in taxes and levies. In
your view is this tax deduction (a) unfair (they should pay less);
(b) fair and reasonable; (c) unfair (they should pay more)?
- Newspoll and The Australian, 1618 January 2004; G.
Megalogenis, Top rate too high, say half of voters, The
Australian, 23 February 2004, p.1.
- Australian Bureau of Statistics, Taxation Revenue
200203, Cat 5506.0. See also D. Bassanese, Howard writes tax
history, Australian Financial Review, 2 April 2004, p.
11.
- The Morgan organisation did not supply respondents with issues
to aid in the answering of these questions.
- This is consistent with the data in Figure 4.
- See M. Wade and M. Riley, Everyone prefers a tax cut to better
services: Costello, Sydney Morning Herald, 31 May1 June
2003, p. 10; A. Horin, Opinion favours social spending, not tax
cuts, Sydney Morning Herald, 17 October 2003, p. 6.
- F. Chaney, Opening Address, Social policy in the
1980s, J. Dixon and D. Jayasuria (eds.), Canberra College of
Advanced Education, Canberra, 1983, pp. 16.
- See Zaller, op. cit., 2001.
- See the reference to the comments of Sol Lebovic in Cutting
income tax is a political winner, The Australian, 23
February 2004, p.6. See also Grattan, op. cit.,
- See T. Kuran, Private truths, Public lies: The
Social Consequences of Preference Falsification, Harvard
University Press, 1997, see pp. 84104.
- S. Wilson and T. Breusch, Taxes and social spending: the
shifting demands of the Australian public, Australian Journal
of Social Issues, vol. 38, no. 1, February 2003, p. 52.
- See Keating, op. cit., p. 23.
- Warren, op. cit., p. 220.
- ibid.
- C. Murphy, Higher super urged to pay health costs, Weekend
Australian Financial Review, April 2326 2004, p. 4. An
increase in the superannuation guarantee (from 9 per cent to 15 per
cent) was recently proposed by Access Economics. It argued that a 6
per cent rise in the guarantee would increase superannuation assets
to 195 per cent of GDP in 2042 compared with the estimated 129 per
cent.
- On the issue of upper-income welfare, see B. Toohey, The new
welfare state, Australian Financial Review, 16 February
2002, p. 17 and B. Toohey, The new welfare state, How the older
generation is milking taxpayers, Australian Financial
Review, 9 June 2001, p. 23.
- See Grant, op. cit.
Appendix:
Thinking about Australia as a whole, what are the THREE most
important things the FEDERAL GOVERNMENT should be doing something
about?

Source: Morgan Poll, 19822003.
The
Graph collates responses to the question according to two
categories: economic issues and social welfare issues. The squared
line represents the aggregate percentage of respondents mentioning
a social welfare issue for each year. The issues within the two
categories are as follows:
Economic cluster,
19821992: Unemployment, Business/industry/rural growth,
Stabilise/improve economy, Lower tax, Overseas trade, Decrease
deficit, Reduce imports from overseas, Reduce size and cost of
government, Reduce cost of living, Interest rates
Economic cluster, 19942003: Unemployment,
Taxation/lower taxes, Tax reform, Taxation/no GST, Other taxation,
Economy and finance, Industry and business, Petrol prices, Interest
rates.
Social cluster, 19821992: Improve education,
Hospitals and health care, Help for elderly, More social
welfare
Social cluster, 19942003: Health/hospitals,
Medicare, Education/schools, Social welfare and aged,
Housing/homeless, Child and youth services
For copyright reasons some linked items are only
available to Members of Parliament.