Features Australia

Put the expenses ‘scandal’ in perspective

Our politicians are not ripping off taxpayers  anywhere near as much as the news media suggest

2 November 2013

9:00 AM

2 November 2013

9:00 AM

A month since our new Prime Minister took to the stage and the honeymoon has been cut somewhat short. Quite apart from any action the new government has taken, it’s the stench of entitlement and indulgence that now hangs over Canberra.

The expenses ‘scandals’ have attracted a typically Australian ire. We naively like to imagine our politicians as equals, or even our subordinates, not the type to jet around the country on public money. To be claiming expenses for weddings and libraries and bike races — well, it flies in the face of the ‘fair go’.

But it’s time to defend the apparently indefensible. Or at least to put it in context.

Since 2005, politicians caught up in expense scandals have repaid Australian taxpayers $110,000, according to Fairfax Media, which has been combing through thousands of claims along with its readers. That sounds like a lot of money. We certainly wouldn’t mind receiving a $110,000 cheque from the government. But is $110,000 really that much in the scheme of things?

The short answer is no. According to the most recent figures from the Aus-tralian Bureau of Statistics, there are around 12,380,000 individuals involved in the tax system.

That number represents the entire population of that mythically hard-done-by species, the taxpayer. It’s a simple discourse: things we don’t like are slugs to the taxpayer, while things we do like are benefits to the Australian people.

From those 12.38 million taxpayers, the government extracted — through one form of personal taxation or another — approximately $143 billion in revenue for the 2011/12 budget. That’s an average taxation of $11,550 per individual.

There are certainly people who pay much higher taxes, and others who work but earn under the threshold to pay anything at all come tax time. But the completely average Aussie taxpayer is about that far out of pocket every year to the government.

So $110,000 still sounds like a big deal — it’s the entire tax payment of ten average Australians!

Well, if money repaid by politicians caught in a spending spree went straight to a handful of lucky families, it would be. But the system doesn’t work that way.That $110,000 is repaid into the country’s total pot, so the number needs to be looked at in terms of what each one of us gets back out of it.

Out of that $110,000, an individual taxpayer gets back about $0.009 — that is, not quite one whole cent. Even if you exclude net tax beneficiaries, bringing the total number of taxable individuals down to 9,106,000, everyone is still refunded only 1.2 cents. No matter how incredulous the public may feel, their ‘taxpayer dollars’ haven’t been subsidising politicians’ junkets. Not even their taxpayer cents.

But what about the argument that we’ve only uncovered the tip of the entitlements iceberg? There are certainly going to be more dodgy claims discovered in coming weeks, and plenty more which will slip under the radar.

If every dollar a politician spuriously claimed as an expense came straight out of the pockets of us taxpayers (because someone has to pay for it all), how much would they need to spend for us to feel it where it counts, in our wallets?

For a politician to take the cost of one Mrs Mac’s Famous Beef Pie ($4 at the corner store) out of the pocket of all 12.38 million Australian taxpayers, they’d need to make $49,520,000 in dodgy claims. To put that number in perspective, Abbott recently paid back $600 he claimed to attend Peter Slipper’s wedding. In order to cost every one of us that meat pie, Abbott would need to attend 82,533 taxpayer-funded weddings. That’s 226 weddings per day, every day, for a whole year.

What about Attorney-General George Brandis, caught with his hand in the cookie jar filling his personal library on the taxpayer dime? We found it puzzling that people would object to politicians buying books — as Neil Brown pointed out last week in this magazine, they might even learn something.

That said, Brandis would have to purchase 332,349 copies of Understanding Business Law, sixth edition, available from Amazon for $149, to deprive each of us of our one meat pie.

Slipper himself would need to have travelled 23,140,187 kilometres on his Cabcharge at the peak fare rate in order to register on the Mrs Mac meter. That’s the equivalent of 30 trips to the moon and back. Even old Don Randall would need to have flown to Cairns almost 10,000 times to inspect his investment property.

The point here is not to trivialise the work that has been done to reveal these questionable claims, nor to excuse the claimants. They should be exposed, the rules should be tighter and better understood, and the public must have confidence in the integrity of its representatives.

But numbers need to be contextualised. The public editor of the New York Times wrote about this very problem in recent days — $10 billion might seem like an awful lot of money, but in some circumstances, it might not be. Spending items need to be expressed as a percentage of the budget or compared to historical norms.

David Leonhardt, economist and Washington bureau chief for the New York Times, said the human mind isn’t equipped to process large numbers easily. We contextualise numbers based on our own experience: so $110,000 might seem serious, but for the government, it’s child’s play.

So don’t let the expenses ‘scandal’ stem your faith in parliamentary budgeting. There are so many better reasons.

Consider the $40 billion we’ll be spending to design and build 12 new submarines to replace the dreaded Collins-class, which also cost billions. Or the $3.1 billion budgeted for the offshore management of asylum seekers in 2013/14. Or even the $74 million spent each year putting religious chaplains in schools. That’s $6 from the average taxpayer.

So, by all means, maintain the rage against politicians’ profligacy. But remember to keep it in perspective.

Got something to add? Join the discussion and comment below.

Mason McCann is a graduate of political economy at the University of Sydney. Michael Koziol is a reporter for PolitFact Australia and a former editor of Honi Soit at the University of Sydney.

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Show comments
  • Ken Borough

    I don’t think people are concerned about the quantum of money but rather the integrity and honesty of elected members. Also, that guidelines are unclear does not justify questionable claims. Finally, rather than use the term ‘entitlements’, perhaps we should use ‘allowances’

  • Jonny Bravo

    A benefit scrounger is a benefit scrounger.