Away with the slash-and-burn merchants

In Greece another round of financial stringency has been voted on by the Parliament. The 2013 Budget has been passed with a diet that has become all too familiar to the population – more spending cuts, more raised taxes. The demonstrations that followed were small in comparison with those of the past. Demo fatigue has set in, or perhaps Greeks are now more concerned with survival and lack the energy to take to the streets.

In Australia conservative state governments continue their attacks on spending, to the point where in NSW Departmental hard copies of annual reports are reduced to four, in black and white, produced in-house on computers and photo-copiers.

The aftermath of the global financial crisis is stretching out over the years, with Governments of all shapes and sizes seemingly having no answer to it other than cut, cut, and cut.

And yet in California in the wake of the elections there, Governor Jerry Brown senses a change in mood.

“The cutting has got out of control,” Governor Brown told a television program. “And in California you can only cut schools and universities so much and then people say ‘enough already’ - and that’s exactly what they said on election night.”

Governor Brown was referring to Proposition 30 (a type of referendum that is voted on at the same time as the national and state polls) in which Californians voted, by a margin of 54 per cent to 46 per cent, to increase personal income taxes for individuals making more than $250,000 a year.

They also agreed to accept a temporary sales tax increase that will affect almost everybody.

The result means that the extra revenue raised will negate the need for spending cuts on education. Opponents fume, saying there will now be no reform of the education system.

But for so long ‘reform’ has been conservative jargon for slash and burn. Doing more with less has been the buzz word for too long. ‘Efficiencies’, when pushed past a certain point, cease to be efficient. That point has not been lost on the good people of California.

And so back to Greece. I have no doubt that genuine reform is needed there, especially in the workings of the bureaucracy. By some accounts if the country simply collected all the taxes it is owed, it would not have a financial crisis.

If so, isn’t there a good case for increasing the numbers of tax inspectors and really making them earn their pay instead of, as has happened, slashing them?

Maybe it is time to reject the methods of the slash-and-burn merchants, whether they are in the International Monetary Fund, or the bean-counters in the corner office. Maybe it is time for ‘stimulation’ to replace ‘austerity’ as the buzz word for the future.