McAuley, Ian: Australia’s ‘big government’ myth

McAuley, Ian

Busting the myth that Australia has “big government”‘, The Conversation, 8 May 2015

The reality is that Australia’s public expenditure, as a percentage of GDP, has shown no discernible upward trend for the last 35 years, and that out of comparable high-income developed countries, we have about the smallest public sector (and the lowest taxes).

Studies Commonwealth outlays over the last 45 years, work done for the book Governomics, with Miriam Lyons.

In Australia the “small government” ideology has seen many functions transferred to the private sector. With technological and market changes there will be shifts each way of various functions, but our governments have pushed to the private sector functions that, in the interests of technical and allocative efficiency, should best be left with government.

This is despite long-term economic trends that should have been meant an enlarging public sector not a reducing one: aging population; labour intensive services; demand.

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