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Wednesday, 28 March 2018
Page: 2391

Senator LEYONHJELM (New South Wales) (13:27): This parliament is full of OPM addicts. Addiction to OPM is a national crisis, and I am surrounded by addicts. I am not talking about the drug opium but something far more terrible. I am talking about an addiction to other people's money. In the movie Other People's Money, the character played by Danny DeVito makes the following reflection:

I love money. I love money more than I love the things it can buy. Does that surprise you? Money, it don't care whether I'm good or not. It don't care whether I snore or not. It don't care which god I pray to. There are only three things in this world with that kind of unconditional acceptance: dogs, doughnuts and money. Only money is better. You know why? Because it don't make you fat and it don't poop all over the living room floor. There's only one thing I like better. Other people's money.

We have a lot of people like that in this parliament.

The great economist Milton Friedman taught us that there are four ways to spend money: spending your own money on yourself, spending your own money on somebody else, spending other people's money on yourself and spending other people's money on somebody else. When you spend your own money on yourself, there is a strong incentive to spend wisely. Nobody spends money more carefully than its owner. This is why it is more efficient as well as right for people to be allowed to keep their own money. When you spend your own money on someone else, you will still be motivated to economise but will be somewhat less likely to satisfy the needs of the other person. Anyone who has given or received an unwanted gift will understand this concept. Even with the best of intentions, spending your money on someone else doesn't always work out for the best. When you spend other people's money on yourself, you have no strong incentive to keep down the cost but at least you have a strong desire to fulfil your own needs.

But there is an even more wasteful type of spending. This is spending other people's money on other people. In this scenario, you care little about both value for money and meeting the needs of the people on whom you are spending the money. Spending other people's money on other people is what we do here. It is the worst kind of expenditure. It explains why so much public money is wasted. It is an inevitable characteristic of OPM that so many grand government plans are destined for failure.

Before we can do something about our addiction to OPM, we first must acknowledge our problem. What we need is OPM Addicts Anonymous. Many government programs are not created because people demand them or because the market was unable to provide the services but because politicians have bought favour with OPM. Politicians are addicted to OPM because they use it to expand their influence, reward political cronies and keep their constituencies dependent on them. I have heard quite a few in this place describe how well they can spend other people's money—indeed, that they can spend it better than anyone else; so well, in fact, that some people should hand over more of their money for them to spend. But if I asked everybody in this chamber to turn out their wallets and purses and give me a sizeable chunk of the money in their possession—say, a quarter or a third—I imagine there would be some disquiet. If I were to tell you that the reason for taking your money is that I know better than you what should be done with it, there might even be some resentment. If I told you that the fact that I was allowing you to keep some of your money was a concession and that it was a cost to me because it prevented me from spending it so well, you might even think I was nuts. And, finally, if I explained to you that, if you refused to give me the money, you could go to jail, I expect that you would even get angry.

In addition to that, imagine that I decided that the last pot of cash you were forced to give me was not nearly enough so I borrowed some more, with the interest to be paid out of what you paid me and the debt to be left hanging over you and your children. Then imagine I started spending it foolishly on things you didn't want. It would be natural to feel outraged. In fact, you should feel outraged. It's something most of us would recognise as common theft. Not only that; it would also constitute authoritarian, incompetent, irrational, vain, patronising and delusional behaviour on my part. But all of that is exactly what the Australian government does to the Australian public, no matter who sits on which side of the chamber. Many people would call it stealing, but in this place we call it 'just another day at the office'.

One of the biggest problems with OPM is that we either overlook or don't truly appreciate its cost. Oscar Wilde once described a cynic as someone who knows the cost of everything and the value of nothing. But there is a far more dangerous type of person in this place: the dreamer—someone who values everything but understands nothing about the cost. We've seen heartfelt and teary-eyed declarations for increased pensions, Newstart, welfare eligibility, services for veterans, a national disability scheme, Gonski school funding, early childhood learning and medical research. All of these things sound great in principle, but the reality of OPM is that money spent on these things is likely to be spent recklessly, in ways that people would not spend themselves.

Perhaps what we need before agreeing to each proposal to spend OPM is an explanation as to why the money should not be left with its owner to be spent by them. Can we put our hand on our heart and swear that we, and the bureaucrats who implement the policies we approve, won't do a worse job of spending it? Can we really say that all the OPM we spend on children—from child care, all the way through schooling and into tertiary education—much of it taken from people who don't have children, is really better spent than if it were spent by their parents? Can we really say that the battlers in Western Sydney and Melbourne aren't better off giving themselves a holiday, paying off a chunk of their mortgage or buying themselves a better car by using their own money instead of giving it to the government?

Politicians pretending to be compassionate when all they are doing is handing out other people's money are just thieves masquerading as angels. Far too much of our political debate is restricted to the question of how to spend OPM, or, if you like: who is the better dealer in OPM? This is the wrong question to ask, because, as Milton Friedman taught us, it is the very nature of the spending that is the problem. A much better question to ask is: why don't we just let people spend more of their own money?