fatvegan

There has been much talk in the press lately about the lack of incentives in Australia. A recent OECD report claimed that our tax system was killing incentives to work. And they're not wrong. The wealthy pay 47 cents in the dollar. Who wants to work with a tax rate like that? It needs to be reduced to 45 per cent for individuals to have incentive to get out of bed every morning. It's a simple case of supply and demand. We have to stop taxing productivity and start encouraging it. Reducing the top marginal tax rate to 45% is the best thing we can do to encourage the wealthy to return to work.

But this doesn't help us motivate the poor to work. It is difficult to incentivise the poor because they already pay hardly any tax. So we have to consider other options. The simplest way to encourage hard work is to reform the welfare system. Public health care, church charities, and social security all cut the legs out from under incentive for workers. They disrespect the poor by telling them that they don't need to work, and they can just sponge off others. They are an institutionalised insult to the many unemployed who would work if only they had the incentive. The right incentive is to eliminate these institutions. What better incentive to work is there than hunger? Or the need to pay for your diabetes medicine? The state should abolish any institutionalised handouts, and leglislate to prevent the church and other charities from so blatantly undermining this country's productivity.

It will not be easy, and we must look to other countries for an example. India is surely the best model Australia could hope to find. In India children starve to death and die of sickness every day. What better reminder of the virtues of hard work than to have your children die before your very eyes because you cannot afford to feed them? It is the perfect incentive to boost productivity, and is what this country sorely needs. The proof is in the data. Last year India's economy grew by 8% while Australia's economy grew by a paltry 5%. Australia has performed well in the past, but the new era requires a change. The government must be open to positive incentives, but it also must not be afraid to use alternative, though well-tested, forms of incentive. So reduce tax on the wealthy by at least two percentage points, and eliminate our perverse welfare system. It is the only way Australia can hope to survive in the new millenium.