Charity should begin at home

Government high-fliers like Foreign Minister Kevin Rudd have been strutting around the world’s stage, throwing around millions upon millions of our dollars like they were some sort of Made In China confetti.

The Daily Telegraph has reported government insiders’ claims that “Taxpayers will foot an extra $2 billion foreign aid bill because Labor feared the consequences of upsetting Foreign Minister Kevin Rudd”. Nicknamed “Kevin 747” for all the jet-setting he has been doing (and because his 2007 campaign for parliament went under the banner of “Kevin 07”), Foreign Minister Rudd has also been campaigning for Australia to get a seat on the United Nations’ Security Council; according to the Daily Telegraph, that campaign will cost Australia some $25 million.[1] How wonderful it must be for some politicians to fritter away the Australian taxpayers’ hard-earned cash.

By its own estimates, the Australian government spent about $4.3 billion in foreign aid in the 2010-11 financial year.[2] As a part of this, hundreds of millions of dollars was given to Indonesia, a country which is estimated to have spent over US$6 billion on its military in 2010.[3] To give away over four billion dollars is a shocking thing for the Australian government to do, when we are so short of funds for hospitals, schools, public housing, assistance for the homeless, and for necessary infrastructure and other much-needed projects. Rural medical centres and indigenous health programmes would certainly benefit from extra financing.

$4.3 billion in foreign aid? That is, $4,300,000,000. As the Australian median household income is about $70,000, being taxed at the average rate of 22% (for the male average wage), producing $15,400 in taxes per household, that means that it would take the taxes of 279,220 Australian households to pay for that $4.3 billion in foreign aid.[4] And that is probably an underestimate of the number of households required to pay it off, when we consider the interest on the money borrowed to meet the resulting financial shortfall of not having those billions to meet other requirements.

That means that there are about 300,000 Australian households working hard just to pay for foreign aid. Is your household one of those slaving away to pay tax, just for it to be sent overseas?

This situation is even more amazing when you consider that Australian governments have been so strapped for cash that they have been borrowing money (often from other countries), but the federal government then goes on to give billions of dollars away overseas.[5] If you ran a company like that, you wouldn’t stay in business for very long.

Giving away billions of dollars when you are massively in debt is hardly sound financial management. In effect, we are giving away borrowed money – and that money has to be paid back, with compound interest. By who? By you – the ever-suffering Australian taxpayer!

On top of this, it has been revealed that there are hundreds of cases of corruption involved with foreign aid.[6]

To cap it all off, the government has decided that spending on foreign aid is to be increased. It has been estimated that by 2015-16 the Australian government will be spending about $8 to $9 billion in foreign aid.[7]

The underlying focus of any foreign aid we give needs to shift away from cash hand-outs. Third World countries would be better off in their long-term development if they are able to grow their own economies, rather than relying on cash hand-outs from overseas. It would make more sense for Australian foreign aid to consist more of material aid, whether it be of food grown on Australian farms or medicines made by Australian companies; at least then such foreign aid would be of benefit to Australians as well, by supporting local industries and local jobs.

Consideration for giving foreign aid should also be made more on the basis of disaster relief, rather than an ongoing infusion of cash that Third World countries may grow to expect, or demand, as their “right”. A freely given gift is never a right or an obligation; instead, it is up to us to decide what foreign aid we give; there is no “obligation” of worth that demands we give away our national savings.

For those who want to see money being sent to deserving cases in Third World countries, there is nothing to stop them sending away as much of their own private incomes as they want. If they feel so strongly about it, they could send away 10% to 20% of their income (or more); however, the rest of us should not be compelled to pay for their desire to finance foreign peoples. It should be remembered that as donations to overseas charitable organisations have been made tax deductible, that the rest of us are paying for such donations already, by – in effect – giving away those taxes.

The primary purpose of taxation in Australia is to enable governments to aid and assist the Australian people with their needs. Rather than over-taxing the Australian people and then giving so much of it away overseas, the government should be spending our taxes on Australians. We have many deserving people here. Charity begins at home.


References:

[1] $2 billion for Kevin Rudd’s UN bid, The Daily Telegraph, 12 May 2011
$400 million poured into Africa as Kevin Rudd chases UN Security Council seat, The Courier-Mail, 25 May 2010
Time to round up Rudd, The Sunday Telegraph, 12 June 2010 [“Australia’s bid for a temporary seat on the UN Security Council, a project which has become a personal crusade and will cost Australia $25 million”]
Where is Kevin when you need him?, Herald Sun, 11 June 2011

[2] A Good International Citizen, Australian Labor Party [$4.3 billion estimate]
Speech: Foreign Aid Budget – increasing official development assistance, Teresa Gambaro MP, 15 June 2011

[3] Military expenditure of Indonesia, The SIPRI Military Expenditure Database (Stockholm International Peace Research Institute) [2009, US$4,702m; 2010, US$6,009m]

[4] Statistics on Australian annual income
[Australian average earnings, 2010, $68,900]
Wages / Salaries Australia
[Australian median wage, for all employees 15 years of age or over, 2002-2003, $32,697]
Median Wage in Australia
Australian Median Income 2006 and 2010
[Australian median household income, 2007-08, $66,820]
Median household income in Australia and New Zealand
[“Average incomes are inflated by a small percentage of very high income earner’s. As such, the average Australian income is 28% higher than the median income.”]
Response to Chris Joye on Australia’s dwelling price-to-income ratio, Macrobusiness, 28 March 2011
[“The average tax rate (total tax as a proportion of income) for a worker earning the male average wage in Australia has been steady at around 22 per cent over the past 40 years. The marginal tax rate (the rate of tax paid on an additional dollar of income) for the same worker has averaged around 35 per cent.”]
Wage and salary taxation, The Treasury [Australian Government]

[5] Hey, big spenders, it’s time to worry about all that foreign debt, Sydney Morning Herald, 14 May 2011
Australia’s current debt position, FlagPost: Information and research from Australia’s Commonwealth Parliamentary Library, 13 April 2011
National debt to reach $1 trillion [The Sunday Telegraph], News.com.au, 2 May 2010
Australia to Borrow as Much as $300 billion, Daily Reckoning Australia, 27 April 2009

[6] Foreign aid graft cases skyrocketing, The Australian, 27 May 2011
How millions of Australia’s foreign aid is being wasted on executive pay and costly contracts [The Daily Telegraph], Herald Sun, 23 May 2010
Australia’s foreign aid program hit by massive fraud, The Courier-Mail, 24 March 2011
Millions lost in AusAID foreign aid scam, The Daily Telegraph, 24 March 2011

[7] Ausaid: Australian Agency For International Development, United Nations Foundation [$8-9 billion estimate]

Further reading:
What was that in aid of? How Canberra is generous to a fault, The Sydney Morning Herald, 5 November 2010
Australia’s International Development Assistance Program (2011), Australian Agency for International Development (AusAID)
Countries & Regions, Australian Agency for International Development (AusAID)
AusAID, Wikipedia
Foreign Aid = Sacred Cow???, Australian Tea Party
Australia’s foreign aid is starved of attention, The Punch, November 2010
Where is your AID money going?, AidWatch, 15 November 2010
Debt Clock Australia
5501.0.55.001 – Government Financial Estimates, Australia, 2010-11, Australian Bureau of Statistics, 24 August 2010
Foreign Investment and Foreign Debt, Australian Bureau of Statistics

Comments

  1. mike monroe says:

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    http://youtu.be/w7lFpTIJ0lg

  2. mike monroe says:

    These are idiots whom we vote for, disgusting, treasonous idiots whose own children will reap the rewards of diversity one day.

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