Government debt (Federal, state, territory and local governments) is not a sum of money that floats out in the universe and somehow ends up assisting the politicians when they have a ‘touch of the shorts’ – government debt is a sum of money loaned from the public (in the form of bonds) or is printed (cleverly called ‘quantitative easing’).

Out of control government spending leads to government borrowing, and government borrowing is a tax on everyday citizens through the inflation it causes. Out of control government spending is a tax on citizens.

Another principle of government finance is simply this: the government has no money of its own. Every cent it has is gained from taxing Australians. The only money the government has is our money, so when they talk about giving you energy rebates with taxpayer funding, what they’re actually doing is giving away your money. Nothing the government ever does is free – we all pay for it in the end, even when we’re not directly paying for it at the moment.

Don’t forget that taxpayers also must fund a medium-sized army of public servants to do all this paperwork and transfer all this money around. Better and more effective relief would be to just let us keep more of the tax we’re forced to pay.

When you include the fact that rebates aren’t so much funded by taxpayers as they are by government borrowings, it actually costs taxpayers more: billions of dollars in interest payments that don’t fund a single road, hospital or school; and higher prices for everything because government borrowing drives inflation. 

Recently the economic basket-cases of Victoria and Queensland have brought into focus the inflationary pressures state governments are bringing to bear on the national inflation crisis. The federal government’s borrowings used to dwarf state borrowings, but these two states are now so bloated with debt that they are dragging the whole country down. 

Remember this when the state government promises $1000 ‘off’ your power bill, ‘free’ TAFE, $300 energy ‘rebates’ or a ‘discounted’ 50c public transport fare; this outrageous spending, propped up by borrowing, causes inflation, which is in effect, is another tax when you pay higher groceries, more for fuel, even higher power prices once the ‘rebate’ stops, or more in mortgage repayments.