Friday, September 16, 2005

What do we spend our taxes on?

Everyone knows that our hard-earned taxes are simply wasted by the government on things like hip hop tours, dole bludgers, the treaty of Waitangi and a vastly bloated bureaucracy right? Wrong In fact, most of our taxes go on core services like education, health and taking care of our elderly - the idea of squandered taxes is another one of the great myths of the New Right. So in order to try and correct this misconception I have published below the "Great New Zealand Tax Graphic" which shows what proportion of government spending is spent on what. Unfortunately – due to software limitations – the graphic isn’t particularly clear, so I’ve reproduced the relevant numbers below it (or you can click on the graphic to view a larger version of it). There are all sorts of interesting things to note regarding the spending of taxes, but I thought I’d just point out one point that is particularly relevant to the pre-election “debates” on taxation. At present the New Zealand government spends approximately 5% of its tax-take on debt financing. That is as much as it spends on the DPB and Dole combined. It is also as much as we spend on law and order. And this is after a concerted effort by the government of the last few years to pay off debt. Given these points, do we really want to start borrowing more money at present? (PS Thanks to Tim for directing me to the treasury website).

Unemployment Benefit - 2%
Dom Purposes Benefit - 3%
Other Benefits - 16%
NZ Super - 13%
Health - 20%
Education - 18%
Core Government Services - 4%
Law and Order - 5%
Defence - 3%
Transport & comms -4%
Financial Costs - 5%
Other Costs - 7%
All figures from: