Prime Minister Julia Gillard deserves applause for her tough stance on corporate welfare, which she announced in Brisbane yesterday:
The PM is keen to boost our productivity performance, which has been modest in recent years. A great way to do that, and save big dollars on corporate welfare (which helps inefficient firms cling to life), would be to get Treasury and Finance to draw up a hit list of dubious industry assistance programs, based on the Productivity Commission’s excellent annual Trade and Assistance Review.
In 2008-09 the Australian Government provided industry with assistance of $3.7 billion in budget outlays (e.g., investment subsidies for textile, clothing and footwear manufacturers) and $4 billion in tax concessions (e.g., the R&D tax concession) – i.e., $7.7 billion in total budgetary assistance. That’s $350 for every Australian, every year, and most Australians probably don’t realise they’re paying it.