The Quest to Cut Government Spending

Cutting government expenditure is in the news currently, with Elon Musk and his DOGE campaign having a major impact in America. But the issue is not new.

In 2014 Bob Day and I, both senators at the time, introduced a motion that the Senate consider options to cut government spending. The problem of the national debt, caused by spending exceeding revenue, was a matter of considerable concern.

In my speech I noted that other crossbench senators had made suggestions as to how expenditure could be reduced. Senator John Madigan, for example, had called for MPs to travel in economy class by default, to abandon junkets overseas, and to leave their spouses behind when they travel. I agreed, and suggested that the same approach should apply across the public service.

Senator Jacquie Lambie had called for cuts to foreign aid. Again I agreed. In my view government-provided foreign aid, other than short-term humanitarian responses to natural disasters, should be abolished. Government-provided foreign aid does not show how generous Australians are; it shows how generous some people are with other people’s money.

A true indication of the generosity of Australians would be to leave decisions on foreign aid to individuals. I am confident that the money would be directed to organisations and causes that Australians have faith in. And on a value for money basis, it would absolutely leave government foreign aid for dead.

Amongst their calls to increase revenue, the Greens also proposed some cuts to spending, such as spending on industry assistance. I agreed again. Our industries would be better off if they could focus on satisfying customers rather than bureaucrats who hand out grants.

I support ending what people normally think of as industry assistance, like spending on agriculture, tourism, mining, manufacturing, and construction industries. But industry assistance goes beyond that. It includes funding for the arts industry, the sports industry, and the communications industry, including the ABC and SBS. Corporate welfare doesn’t stop being corporate welfare when the corporation is government-owned. Or when it’s a corporation that’s currently in favour, such as a renewable energy business.

The Australian Greens have also mooted cuts to defence. The problem here is that defence costs as a share of GDP are historically low. While I certainly agree we require more responsible spending in defence, that may not lead to savings.

I also acknowledge that Labor and the Coalition have both supported spending cuts at various times. I invariably supported their proposals. If only they had implemented them after they are elected.

I then informed the Senate of my spending cut suggestions.

I began with Commonwealth payments to the States, Territories and local governments, which together represent a quarter of the Commonwealth Government’s spending. These payments should be abolished.

Abolition would prompt the States to means-test access to public hospitals and schools, and to put tolls on arterial roads and highways. Even if they reacted by increasing taxes, which I would not encourage, we should remember that the States have access to substantial tax bases, many of them more efficient than the Commonwealth’s income tax.

The abolition of Commonwealth payments to States would increase the autonomy and accountability of the States, and allow greater competition and experimentation between the States.

It would allow the Commonwealth to spend far less on education, given it does not run a single school.

The abolition would also serve to end ‘horizontal fiscal equalisation’, a welfare system whereby funds are effectively taken from rich State Governments and given to poor State Governments. This system discourages State Governments from removing impediments to economic growth and from reducing dependency on government services. It also targets assistance more poorly than welfare to individuals.

I turned to the welfare system, noting that billions of dollars are taken from Australian workers every year and given back to the same families in the form of government handouts or subsidies. This is wasteful, inefficient and unnecessary. We need to bring back a central support role for family and community, to focus tax-paid support on the least well off, and to get rid of middle class welfare.

Yet here we are now, a decade later, with little changed. Our governments continue to have a spending problem, there are 700,000 people on the NDIS, and our national debt keeps growing.

It is time for an intervention. We need an Australian version of DOGE.