Peter Cresswell: Budget, and Tsunami Aid

This week, PC is fisking the budget, and asking whether charity is always a good thing.

1. A New Kind of Budget

Helen Clark is saying this morning that all the talk of tax cuts prior to the Budget announcement was the result of journalists interviewing their typewriters. "Tax cuts don't do much for low-income earners," said a Labour Prime Minister offering nothing to low-income earners but toil, tears, sweat and Smarmey Maharey's 'Welfare for Families' package.

This is still an election-year budget, but it's a new kind of election-year budget. It's an election year budget without the jam today; with Cullen it's always going to be jam tomorow. But the lack of an overt lolly scramble was instructive as there was an implicit challenge laid down yesterday which the opposition parties will doubtlessly be too timid to pick up.

Clark and Cullen are betting that after years of indoctrination, people have now bought the Labour line that tax cuts are bad but state welfare, state benefits, state student scholarships, scads of bureaucrats, oodles of taxes and pet schemes dreamed up by smarmy tossers are all A Good Thing. A Very Good Thing. They think people like being nannied, and will vote for more of it.

My worry is they're probably right. I blame the schools.

And while you're taking in all the details of yesterday's Budget over the weekend and thinking about what you might do with your 67c per week and down which hole that $4.2 billion increase in spending is going, reflect for a moment that government has no money of its own to spend. It does not produce a single cent; every dollar it promises to spend it first has to take from us. Whatever largesse they distribute to you, they first had to take from you.

How much 'taking' is too much? Excluding government employees, lawyers and consultants from the figures of those gainfully employed, is $60billion too much for 800,000 or so taxpayers to pay? And giving people their own money back in order to make them beneficiaries of the state ... that' s just wrong isn't it?

Does it have to be this way?

No. It doesn't. Libertarianz has produced an alternative budget here showing that -- with the will to do so -- all compulsorily levied tax could be got rid of completely within four to five years, and thereafter a payment similar to that you make on insurance could keep the government and its remaining beneficiaries afloat.

In the meantime, and over those transitional four to five years, GST would be abolished, a flat rate of 15% income tax assured, and a tax-free threshold of $10,000 applied. Great for the poor, who would be able to keep their own money and become rich.

More budget fisking from PC here

2. Giving until it hurts whom?

Since we've had a few chats here recently about altruism, tsunamis and being uncharitable, it seems appropriate to examine what's been happening with all that tsunami aid that Western countries gave on behalf of their taxpayers.

Turns out that it hasn't all gone where it was supposed to. In fact, much of it hasn't gone anywhere at all, and much that has is still trying to penetrate red tape. Mark Steyn examines what and where here. The problem, notes Steyn, is that Westerners are "eager to help but too naive to understand that, no matter the scale of devastation visited upon a hapless developing nation, its obstructionist bureaucracy will emerge from the rubble unscathed."

The problem is that altruism has encouraged people to think the act of virtue inheres in the giving itself, rather than in the actual result of the giving. "It's the thought that counts," we say smugly. Time to rethink our virtues, I'd suggest.

Take the whole Live Aid palaver for instance. Organised to feed Ethiopia's starving millions after a famine of Biblical proportions decimated the population, the famine was no more Biblical in origin than was Stalin's starving of millions of Ukranian peasants half-a century before -- no surpise, since Colonel Haile Mariam Mengistu was following to the letter Stalin's own programme to exterminate the Kulaks in his own fiefdom. How he must have laughed at Bob Geldof. Daniel Wolf wrote (in a Spectator article originally published in the Spectator and titled in homage to Sir Bob "What Happened to the Fucking Money?"):

In 1984-85, up to a billion dollars’ worth of aid flowed into Ethiopia. Thousands of Western aid workers and journalists flew in with it. The regime ensured that the visitors converted their Western dollars to the local currency at a rate favourable to the government: in 1985 the Dergue tripled its foreign currency reserves. It used this influx of cash to build up its war machine, it commandeered aid vehicles for its own purposes and, by diverting aid supplies, helped to feed its armies.

The United Nations in Addis Ababa, which was co-ordinating the aid operation, denied that the level of diversion was significant. Later on, it became clear that a significant proportion of the relief food in Tigray - the epicentre of the famine - was consigned to the militia. The militias were known locally as "wheat militias".

As Mugged By Reality says, "People were not starving they were being starved." And giving was not saving them from being starved, it was helping to starve them. It was feeding and succoring their oppressors. As Daniel Wolf says,

"The story of Band Aid is the story of us, not them"; and so it is with altruism -- with altruism it's the giving itself that matters, not the result of the giving. Sacrifice matters.

Giving the money made people feel better about themselves -- their new-found virtue in being 'good altruists' helped them feel they'd earned the right to be smug. That the giving did less than nothing to help the problem it was supposed to fix seems to have caused barely a ripple since. Don't want to challenge that smugness, do we?

ENDS

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