Gillard better than Swan on some details

Comments on Joe Kelly and James Massola “Wayne Swan can't say which year Labor achieved its last surplus”, 12/05/2011, http://www.theaustralian.com.au/national-affairs/budgets/julia-gillard-defends-war-on-middle-class-welfare-in-budget/story-fn8gf1nz-1226054476115

Prime Minister Gillard has done some home work and was prepared for the issue of when ALP government last had a budget surplus, obviously much better than her Treasurer had been.

The PM should be commended for that and by implication Swan needs to improve a lot in this area, not the least to avoid breaking a glass with water spilling over a table of paper.

Having said that, I'd like to raise two points.

Firstly, while it is politicians' tradition to portray their political opponents as no policy detail and no substance in arguments, it should be noted that it is the government not the opposition that is responsible for government budget, with the supports of the full machinery of the APS. So demanding for the opposition leader to come up with details of an alternative budget should they question the government's budget is not the correct approach by a prime minister.

Secondly, the superficial figures of tax revenue as a percentage of GDP are only part of the story of whether a government is high or low tax one. There are other relevant issues, like how the tax revenue is spent, transferred or saved, and etc.

For example, a government may actually be a low taxing government even the proportion is X percentage points higher for a government in a year if it returns an amount of revenue more than X percentage points of GDP to the taxpayer, than an alternative scenario, and vice versa. The same thing can be said if government saves part of the revenue in a fund or pays off debts.

Further, arguably, a particular year’s government revenue can be affected by many factors, such as a sudden economic boom or improvement in compliance and enforcement, and etc.

In another word, it is government spending that is a better indicator of a government size.

On that account, ALP government generally perform poorly, especially if its larger spending was also related wastage.