As the cast were taking their bows at the end of a show before Christmas, one of them stepped forward to say that, as we left, we’d be approached by people with buckets collecting for the NSW Rural Fire Service. Normally I’d reach for my wallet – I’d done so a few weeks earlier when they were collecting for an actors’ charity – but this time I declined.
Like Victoria’s Country Fire Authority, the RFS is staffed by volunteers. Why did they need donations? Presumably, to help cover the cost of needed equipment or incidental expenses. Really? What’s happened to the state government’s cheque book? And don’t I remember hearing that the RFS had had its funding cut?NSW firefighters on the frontline are now eligible for up to $300 a day in financial support.
No one believes every worthy cause should be funded by the government so that private charity becomes redundant. And it’s true the federal government partially subsidises donations by making them tax-deductible. But where do you draw the line between what the government should cover and what can be left to the generosity – or otherwise – of private citizens?
The more I think about it, the more I realise that, as part of their commitment to Smaller Government and lower taxes, governments have been quietly shifting the dividing line between what the government pays for and what should depend on charity.
All governments have been doing it. State governments, for instance, have long left country (but not city) fire-fighting to volunteers. And have long underfunded the upkeep of public schools, believing parents and citizens can be left to make up the shortfall. But it’s been a particular trick of the federal Coalition government as it struggles to return its budget to surplus when there are expensive, vote-buying tax cuts to be covered.
If you’re wondering why, despite his contrition at having taken an overseas break his spin doctors tried to keep secret, and his freely dispensed “thoughts and prayers”, Scott Morrison remained adamant for so long that all that was needed was already being done to help the firefighters, it’s because he knows that too much generosity on the feds’ part could see his precious budget surplus whittled down to nothingness.
Since its election in 2013, this government has been insistent that the budget should be returned to surplus by cutting government spending, not by explicit increases in taxes (hidden tax increases caused by bracket creep are okay, of course, because the punters don’t notice ’em).
Its first budget in 2014 was a long-term plan to improve the budget by what the bureaucrats call “cost-shifting”. Much of the cost of health and education was to be shifted onto the states’ budgets. Some was to be moved to your household’s budget via the $7 charge for visits to the doctor. That budget was so badly received most of those plans were reversed. But Finance Minister Mathias Cormann and his accountants have continued to limit the growth in government spending by penny-pinching in ways that voters wouldn’t notice or object to.
According to a recent survey of its members’ staffs by the Australian Council of Social Service, 76 per cent of staff dealing with housing the homeless reported an increase in demand, as did 71 per cent of those providing financial counselling and support (aka money). Respondents to the survey said the unmet demand naturally had adverse impacts on the community. Where people fall through the cracks they can end up in hospitals or the justice system (cost-shifting to the states).
I’ve been reading about how many small country towns are relying on newly formed charities for their supply of water. More broadly, the desire to limit government spending encourages politicians to ignore reports warning of looming troubles and push problems off into the future. Some of the foreseen problems fail to materialise, but many eventually reach crisis point and can no longer be ignored.
The aged care royal commission is revealing the shocking results of one attempt to keep government small by relying on for-profit providers, underspending on the provision of home-care packages and on policing institutions’ adherence to the rules.
His reluctance – and anxiety to emphasise it’s not a payment of wages – is understandable, however. Behavioural economics is clear that paying people to do what they formerly did without payment can kill the motivation to donate your services for noble reasons. Morrison has stressed that this response to a problem of unprecedented severity shouldn’t be seen as setting a precedent.
Good luck with that. If climate change is making drought, heatwaves and bushfires bigger and more frequent, the horrific events of this summer will become a regular occurrence – meaning the days of leaving bushfire fighting to unpaid volunteers are numbered.
Ross Gittins is the Herald’s economics editor.
Ross Gittins is the Economics Editor of The Sydney Morning Herald.
Comments
5 responses to “ROSS GITTINS Why I didn’t donate to the Rural Fire Service this time around.(SMH 1.1. 2020)”
“The need for charity is a failure of government”
The old saw, “taxes buy civilisation” is pretty clear & simple.
If by civilisation we mean little things like infrastructure – roads, power, water & sewage provision, medical care & education etc that should never be left to the profit seekers… oh wait.
Tax cuts ensure that there is less of everything that makes modern life tolerable for the majority of people.
The exemplar laissez faire – the rich do as they wish, the poor bear what they must – was tried until the end of the 19thC in Britain and the USA.
In the 80s it was given a grease & oil change with neoliberalism – nothing new about the NuRite, it’s the same old wrongs.
An excellent article by Ross Gittins. I know little of the NSW RFS but I can say as Victorian farmer and volunteer fireman for 60 years, without any vacillation, that no one should donate anything to the Victorian CFA.
Several years ago the Victorian Government changed the system of collecting fire levies from a levy on Fire Insurance Policies ( as we know from the current fires, fewer and fewer people have fire insurance cover on their properties) -to a levy on local government rates; a land tax by stealth! This produced a torrent of income for the fire services, and in Victoria raised some $500 million more than required.
This “honey pot” has the Union excited. This is part of the background to the attempted takeover of the CFA volunteer organisation by the Fire Union, to which the Andrews government has no answer but to acquiesce!
Very perceptive and very well written Ross. We continue to see the decline of the concepts of society and the common good. The idea, ascribed to Margaret Thatcher, that “There is no such thing as society” just a collection of self-interested individuals goes from strength to strength. In that model taxation is seen as an imposition on one’s individual rights rather than as a mechanism, based on the virtue of justice, that helps one contribute to the good and progress of all.
Spot on Ross. Thanks for detailing the governments subterfuges in cost shifting and other underhand efforts.It is truly amazing that they do not actually understand what a budget surplus really is !
A budget surplus is a Cost, nothing like a saving they describe. Having a surplus simply means the government has spent less than it took away in taxes. But tax is a cost. Tax CANNOT be revenue[accounting 1.01] Tax is destroyed money. It is deleted from the economy. You have to create money before it can be taxed. So tax cannot create spending. Spending comes from government spending on its creditors for work done on the government’s behalf. Tax is the cost side of the budget. To balance the budget spending has to rise to reach balance by year’s end. The government is not spending so the private sector has to spend to achieve balance. That takes away private sector assets and shrinks the economy.
So we should hardly congratulate the Federal Government for its intention to have a recession. The facts tell it as it is. We do not deserve this miserable and incompetent government.