1 00:00:00,480 --> 00:00:02,840 Speaker 1: From the Daily Os. I'm Billy fitz Simon's and this 2 00:00:02,920 --> 00:00:06,680 Speaker 1: is no silly questions. It's time for another Thursday Explainer 3 00:00:06,720 --> 00:00:10,720 Speaker 1: with tda's resident explainer and certified normal person, as he 4 00:00:10,760 --> 00:00:13,039 Speaker 1: described himself last week, Tom Crowley. 5 00:00:13,320 --> 00:00:15,400 Speaker 2: I have a feeling I'm going to regret saying that one. 6 00:00:15,480 --> 00:00:17,279 Speaker 2: But hello, Billy, Tom. 7 00:00:17,280 --> 00:00:20,319 Speaker 1: We're into week two of the podcast. Are you having fun? 8 00:00:20,520 --> 00:00:22,560 Speaker 2: I am having fun. The response from the audience has 9 00:00:22,600 --> 00:00:25,279 Speaker 2: been fantastic. I did have several friends make fun of 10 00:00:25,320 --> 00:00:28,560 Speaker 2: me for insisting I'm a normal person in the last episode, 11 00:00:28,920 --> 00:00:31,520 Speaker 2: but despite that, I'm soldering on. I'm very excited about 12 00:00:31,560 --> 00:00:32,520 Speaker 2: today's topic. 13 00:00:33,040 --> 00:00:35,720 Speaker 1: Let's get into it. So today's topic is what does 14 00:00:35,720 --> 00:00:39,599 Speaker 1: the government do? And it seems like a very foundational question. 15 00:00:40,120 --> 00:00:42,600 Speaker 1: Some people would say that that is a silly question, 16 00:00:42,680 --> 00:00:45,600 Speaker 1: despite the name of this podcast, where are we going 17 00:00:45,640 --> 00:00:46,159 Speaker 1: to take it? 18 00:00:46,600 --> 00:00:48,839 Speaker 2: That's right, So I suppose I've phrased the question in 19 00:00:48,880 --> 00:00:51,120 Speaker 2: a slightly silly way. I'm sure everyone can list a 20 00:00:51,120 --> 00:00:53,239 Speaker 2: few things that the government does. But what I really 21 00:00:53,240 --> 00:00:55,840 Speaker 2: want to get at today is as full a picture 22 00:00:55,880 --> 00:00:59,160 Speaker 2: as we can of what's the government's role. What are 23 00:00:59,200 --> 00:01:01,400 Speaker 2: all the things that we expect government to do and 24 00:01:01,600 --> 00:01:03,920 Speaker 2: why do they do the things that they do. So 25 00:01:04,080 --> 00:01:05,840 Speaker 2: a bit like last week when we talked about the 26 00:01:05,880 --> 00:01:08,839 Speaker 2: difference between left and right, we're starting with these big 27 00:01:08,880 --> 00:01:12,880 Speaker 2: picture foundational questions, I think because they sit behind so 28 00:01:13,080 --> 00:01:15,600 Speaker 2: much of the day to day stuff of politics. So 29 00:01:15,680 --> 00:01:17,679 Speaker 2: I guess you've got to kind of start with with 30 00:01:17,760 --> 00:01:18,679 Speaker 2: those building blocks. 31 00:01:19,240 --> 00:01:21,679 Speaker 1: Now, last week I started out by asking you to 32 00:01:21,720 --> 00:01:24,800 Speaker 1: give me the simplest explanation you could. I think this 33 00:01:24,880 --> 00:01:26,480 Speaker 1: week we have to make it a little bit harder. 34 00:01:26,600 --> 00:01:27,760 Speaker 2: Oh good, that sounds worrying. 35 00:01:28,200 --> 00:01:30,440 Speaker 1: I'm going to time you, so you've got sixty seconds 36 00:01:30,480 --> 00:01:32,720 Speaker 1: to give me a quick explanation and then we can 37 00:01:32,760 --> 00:01:34,160 Speaker 1: go into the details after that. 38 00:01:34,280 --> 00:01:34,760 Speaker 3: Sound good. 39 00:01:35,120 --> 00:01:37,039 Speaker 2: Look on your face, Billy is suggesting. I don't have 40 00:01:37,080 --> 00:01:39,240 Speaker 2: a whole lot of choice, So yes, let's. 41 00:01:39,080 --> 00:01:44,040 Speaker 1: Do it, all right, Your time starts now. 42 00:01:44,319 --> 00:01:47,039 Speaker 2: All right. So, the government does things on our behalf. 43 00:01:47,160 --> 00:01:48,840 Speaker 2: It gives us the stuff that we want as a 44 00:01:48,840 --> 00:01:51,720 Speaker 2: society that we can't get as individuals. Some of it 45 00:01:51,800 --> 00:01:55,000 Speaker 2: is the big stuff. It gives us hospitals, schools, roads, trains, 46 00:01:55,240 --> 00:01:56,800 Speaker 2: but it does all the little stuff too. At a 47 00:01:56,880 --> 00:01:59,400 Speaker 2: national level, the government runs the army, but at a 48 00:01:59,400 --> 00:02:02,080 Speaker 2: local level. It also collects our bins. How does it 49 00:02:02,080 --> 00:02:04,720 Speaker 2: do all this? It takes our money. Our question today 50 00:02:04,880 --> 00:02:07,320 Speaker 2: is how does it decide how much to take and 51 00:02:07,360 --> 00:02:09,720 Speaker 2: how much stuff to do? And the answer is us. 52 00:02:10,120 --> 00:02:12,679 Speaker 2: Government is an extension of us. In a democracy, we 53 00:02:12,760 --> 00:02:15,040 Speaker 2: vote for people to make decisions about what to do, 54 00:02:15,160 --> 00:02:17,440 Speaker 2: what not to do, how much money to take, and 55 00:02:17,480 --> 00:02:20,280 Speaker 2: how much to spend. And essentially nothing is off limits. 56 00:02:20,560 --> 00:02:22,480 Speaker 2: We don't have to spend on just stuff we need. 57 00:02:22,520 --> 00:02:24,240 Speaker 2: We can spend on stuff we like, and we do. 58 00:02:24,639 --> 00:02:27,280 Speaker 2: We don't just build roads, we build stadiums and theaters 59 00:02:27,320 --> 00:02:29,359 Speaker 2: and fun stuff. These are all choices that we make, 60 00:02:29,440 --> 00:02:32,400 Speaker 2: and we disagree on them. In fact, all politics really 61 00:02:32,480 --> 00:02:35,160 Speaker 2: is is disagreements about what to do, because government is 62 00:02:35,200 --> 00:02:37,240 Speaker 2: whatever we want it to be, and politics is the 63 00:02:37,280 --> 00:02:40,000 Speaker 2: business of figuring out what that is. How did I do? 64 00:02:40,200 --> 00:02:42,000 Speaker 1: That was pretty good? I might invite you back next 65 00:02:42,000 --> 00:02:42,800 Speaker 1: week to come again. 66 00:02:43,120 --> 00:02:44,600 Speaker 2: Thanks. I think I'm going to need to lie down 67 00:02:44,639 --> 00:02:45,280 Speaker 2: after that one. 68 00:02:45,600 --> 00:02:47,360 Speaker 3: That's a nice broad overview. 69 00:02:47,760 --> 00:02:49,840 Speaker 1: Now, maybe to start with I think you mentioned in 70 00:02:49,880 --> 00:02:53,519 Speaker 1: their national government, state government, local government. What's the difference 71 00:02:53,560 --> 00:02:55,639 Speaker 1: between those three and who does what? 72 00:02:56,240 --> 00:02:58,880 Speaker 2: It's a great place to start, So I can take 73 00:02:58,919 --> 00:03:00,520 Speaker 2: a bit of a breath and speak at a slightly 74 00:03:00,520 --> 00:03:03,440 Speaker 2: more normal pace this time. I think the first government 75 00:03:03,480 --> 00:03:06,200 Speaker 2: that most people think about is the national government, the 76 00:03:06,200 --> 00:03:09,000 Speaker 2: federal government, and then the next level down you've got 77 00:03:09,040 --> 00:03:11,560 Speaker 2: the state governments, and on the bottom rung you've got 78 00:03:11,720 --> 00:03:14,480 Speaker 2: local councils. Now, I think people tend to think of 79 00:03:14,520 --> 00:03:17,400 Speaker 2: it as the federal government is like the main one, 80 00:03:17,440 --> 00:03:19,520 Speaker 2: and the states are the support acts, almost like the 81 00:03:19,520 --> 00:03:22,560 Speaker 2: little siblings. Historically, though, it's interesting to note that it 82 00:03:22,600 --> 00:03:25,400 Speaker 2: was actually the opposite of that. The states came first 83 00:03:25,440 --> 00:03:28,000 Speaker 2: and they set up the federal government by agreeing on 84 00:03:28,120 --> 00:03:31,679 Speaker 2: a constitution that sets out what it can do. But definitely, 85 00:03:31,680 --> 00:03:34,160 Speaker 2: in practice, it is true that over time the federal 86 00:03:34,240 --> 00:03:36,880 Speaker 2: government has been the one that has just done more stuff, 87 00:03:37,320 --> 00:03:40,440 Speaker 2: and it's eventually ended up with most of the responsibility 88 00:03:40,640 --> 00:03:45,160 Speaker 2: for a whole range of national issues. And I think crucially, 89 00:03:45,280 --> 00:03:47,840 Speaker 2: it's got the most money. So the federal government's the 90 00:03:47,840 --> 00:03:50,680 Speaker 2: one that raises most of the taxes. Four dollars out 91 00:03:50,680 --> 00:03:53,360 Speaker 2: of every five dollars that we pay in taxes we 92 00:03:53,400 --> 00:03:55,880 Speaker 2: pay to the federal government, and the states are pretty 93 00:03:55,880 --> 00:03:59,080 Speaker 2: reliant on the federal government for about half of their money, 94 00:03:59,440 --> 00:04:01,560 Speaker 2: and so I guess talks and that really puts the 95 00:04:01,560 --> 00:04:04,840 Speaker 2: federal government in this role as the national leader. But 96 00:04:04,840 --> 00:04:06,560 Speaker 2: the states are still really important as well. So they're 97 00:04:06,560 --> 00:04:07,880 Speaker 2: the ones who run a lot of the on the 98 00:04:07,880 --> 00:04:12,200 Speaker 2: ground stuff. They actually operate hospitals and schools and police 99 00:04:12,240 --> 00:04:14,960 Speaker 2: forces and all that. And then there's the local council. 100 00:04:15,360 --> 00:04:17,320 Speaker 2: I guess if the states are on the ground, the 101 00:04:17,360 --> 00:04:19,479 Speaker 2: councils are kind of in the ground. They're doing the 102 00:04:19,560 --> 00:04:22,880 Speaker 2: real kind of basic level stuff like planting trees in 103 00:04:22,920 --> 00:04:25,000 Speaker 2: parks and taking your rubbish. So they're the kind of 104 00:04:25,040 --> 00:04:27,480 Speaker 2: three levels that our government operates on. 105 00:04:28,880 --> 00:04:31,120 Speaker 1: All right, So up the top, you talked about the 106 00:04:31,160 --> 00:04:34,400 Speaker 1: two parts to what government does get money and spend money, 107 00:04:34,400 --> 00:04:37,440 Speaker 1: and that feels particularly relevant in a week where the 108 00:04:37,480 --> 00:04:40,160 Speaker 1: federal government has handed down its federal budget. 109 00:04:40,560 --> 00:04:41,920 Speaker 3: But let's get more specific. 110 00:04:42,000 --> 00:04:45,159 Speaker 1: To start with, where does the government get the money from? 111 00:04:45,440 --> 00:04:48,039 Speaker 2: So they get it from us through the taxes that 112 00:04:48,080 --> 00:04:51,440 Speaker 2: we pay. There are three main taxes that the federal 113 00:04:51,480 --> 00:04:55,520 Speaker 2: government collects. First, there's individual tax or income tax, so 114 00:04:55,520 --> 00:04:57,920 Speaker 2: that's the money that comes out of your paycheck. Then 115 00:04:57,920 --> 00:05:01,119 Speaker 2: there's company tax, and there's the goods and Services tax. 116 00:05:01,160 --> 00:05:03,680 Speaker 2: The GST, which is a tax on not quite everything 117 00:05:03,680 --> 00:05:05,200 Speaker 2: we buy, but a lot of things we buy, and 118 00:05:05,279 --> 00:05:08,080 Speaker 2: it gets added in to the price. There's a couple 119 00:05:08,160 --> 00:05:11,680 Speaker 2: of others, so states tax land. The federal government taxes 120 00:05:11,720 --> 00:05:14,440 Speaker 2: things like fuel and luxury cars when they come into 121 00:05:14,480 --> 00:05:17,479 Speaker 2: the country. We tax cigarettes deliberately because we want to 122 00:05:17,480 --> 00:05:20,240 Speaker 2: make them expensive to discourage people from smoking. So there 123 00:05:20,240 --> 00:05:22,520 Speaker 2: are all sorts of different taxes for all sorts of 124 00:05:22,560 --> 00:05:26,400 Speaker 2: different reasons. And tax is, I guess, not the most 125 00:05:26,440 --> 00:05:28,560 Speaker 2: exciting topic in the world. Maybe I think for a 126 00:05:28,600 --> 00:05:31,440 Speaker 2: lot of people it's less exciting than spending. But there's 127 00:05:31,440 --> 00:05:34,159 Speaker 2: a lot of areas of disagreement and debate in. 128 00:05:34,200 --> 00:05:36,560 Speaker 1: Tax I think it's pretty exciting. Well, at least it's 129 00:05:36,640 --> 00:05:39,400 Speaker 1: our job to make it exciting. Can you give me 130 00:05:39,440 --> 00:05:40,040 Speaker 1: an example. 131 00:05:40,320 --> 00:05:44,359 Speaker 2: Sure, So let's take income tax. So we have what's 132 00:05:44,440 --> 00:05:48,120 Speaker 2: called a progressive income tax system, where the more that 133 00:05:48,160 --> 00:05:51,240 Speaker 2: you earn, the higher percent of your pay that you 134 00:05:51,279 --> 00:05:54,120 Speaker 2: get taxed. Now, there's some loopholes and it's a little 135 00:05:54,160 --> 00:05:56,640 Speaker 2: bit more complicated than that, but in principle, our income tax, 136 00:05:56,680 --> 00:05:59,920 Speaker 2: it's not just some neutral way of taking money from people, 137 00:06:00,160 --> 00:06:03,960 Speaker 2: like an exercise in accounting. There's a value judgment in there, 138 00:06:04,040 --> 00:06:07,279 Speaker 2: right that we as a society think the rich should 139 00:06:07,279 --> 00:06:09,920 Speaker 2: pay more than the poor. And we talked last week 140 00:06:09,960 --> 00:06:11,880 Speaker 2: about you know, left versus right and these sorts of 141 00:06:11,920 --> 00:06:14,600 Speaker 2: value clashes in politics. Well that's one example therein in 142 00:06:14,640 --> 00:06:18,080 Speaker 2: tax that people with very different views would disagree on. 143 00:06:18,480 --> 00:06:20,240 Speaker 2: So tax, I think can be interesting in that sense, 144 00:06:20,400 --> 00:06:22,680 Speaker 2: and the choices that government makes about how to get 145 00:06:22,680 --> 00:06:26,240 Speaker 2: its money can be quite controversial ones. I should say 146 00:06:26,240 --> 00:06:28,400 Speaker 2: here as well that as well as tax, the government 147 00:06:28,440 --> 00:06:31,360 Speaker 2: can spend by taking out alone. But debt. Again, it's 148 00:06:31,360 --> 00:06:33,040 Speaker 2: budget week, so it would be a fun time to 149 00:06:33,040 --> 00:06:34,880 Speaker 2: talk about debt, but I think that's probably a story 150 00:06:34,880 --> 00:06:35,880 Speaker 2: best left for another day. 151 00:06:36,160 --> 00:06:37,720 Speaker 3: All right, let's get to spending. 152 00:06:37,839 --> 00:06:40,120 Speaker 2: Yes, let's get to spending. So I'll start with the 153 00:06:40,120 --> 00:06:45,000 Speaker 2: federal government. What do they spend on the big three? Health, education, 154 00:06:45,480 --> 00:06:49,280 Speaker 2: and welfare, and then there's defense, there's infrastructure. There's a 155 00:06:49,320 --> 00:06:51,800 Speaker 2: few other things, but they're the big ones. And as 156 00:06:51,839 --> 00:06:53,400 Speaker 2: I mentioned before, they also give a lot of their 157 00:06:53,400 --> 00:06:56,360 Speaker 2: money to the states, and the states spend again on 158 00:06:56,440 --> 00:06:59,599 Speaker 2: health and education and infrastructure in particular. They're kind of 159 00:06:59,600 --> 00:07:03,320 Speaker 2: the big over arching things. But in reality, I guess 160 00:07:03,320 --> 00:07:05,000 Speaker 2: I'll come back to this idea that government spend on 161 00:07:05,080 --> 00:07:08,360 Speaker 2: all sorts of random things, and there's not really a 162 00:07:08,440 --> 00:07:10,840 Speaker 2: rule book about what they can and can't spend. I 163 00:07:10,840 --> 00:07:13,480 Speaker 2: think that's maybe a key point to make. If we 164 00:07:13,520 --> 00:07:15,080 Speaker 2: want it, we can have it if you like. So 165 00:07:15,360 --> 00:07:18,440 Speaker 2: for example, today, you know, we fund the ABC in 166 00:07:18,440 --> 00:07:22,440 Speaker 2: the SBS, the government runs news channels and entertainment programming 167 00:07:22,480 --> 00:07:25,960 Speaker 2: because it's decided that that's something that society should have. 168 00:07:26,400 --> 00:07:29,360 Speaker 2: There are entire sports like hockey and badminton and a 169 00:07:29,360 --> 00:07:32,920 Speaker 2: whole bunch of Olympic sports that probably wouldn't survive professionally 170 00:07:32,920 --> 00:07:35,720 Speaker 2: on their own, but survive because the government funds them. 171 00:07:35,760 --> 00:07:38,320 Speaker 2: So it's not I guess, just about essentials. We can 172 00:07:38,400 --> 00:07:41,880 Speaker 2: in reality spend on pretty much anything, and so so 173 00:07:42,080 --> 00:07:44,800 Speaker 2: much of the debate in politics, I guess again coming 174 00:07:44,800 --> 00:07:47,120 Speaker 2: back to this kind of you know, clash between values 175 00:07:47,160 --> 00:07:49,720 Speaker 2: and different visions for what government should do. It's all 176 00:07:49,760 --> 00:07:52,680 Speaker 2: about this question of what should and shouldn't the government do, 177 00:07:52,840 --> 00:07:54,720 Speaker 2: and that's kind of, you know what, it's our job 178 00:07:54,760 --> 00:07:57,200 Speaker 2: to decide when we cast our votes in an election. 179 00:07:57,680 --> 00:07:59,760 Speaker 1: So you're talking a lot about money, which makes a 180 00:07:59,760 --> 00:08:02,880 Speaker 1: lot of sense given your background as an economist, But 181 00:08:02,920 --> 00:08:05,600 Speaker 1: surely that's not all the government is just money in 182 00:08:05,680 --> 00:08:08,800 Speaker 1: and money out. What about the things that government does 183 00:08:08,800 --> 00:08:12,160 Speaker 1: that aren't about dollars but are about ideas or rules 184 00:08:12,360 --> 00:08:13,120 Speaker 1: or principles. 185 00:08:13,560 --> 00:08:16,880 Speaker 2: So you're right. I've focused on money in, money out 186 00:08:16,920 --> 00:08:19,360 Speaker 2: because I think it's the quickest way to kind of 187 00:08:19,640 --> 00:08:22,440 Speaker 2: explain the mechanics of what government does. And I guess 188 00:08:22,440 --> 00:08:24,680 Speaker 2: it is budget week and it's front of mine for us. 189 00:08:25,160 --> 00:08:26,800 Speaker 2: But of course, you know, the government is not just 190 00:08:26,840 --> 00:08:29,400 Speaker 2: a money machine. It's a place where we hash out 191 00:08:29,480 --> 00:08:31,640 Speaker 2: what kind of society we want to live in, what 192 00:08:31,680 --> 00:08:34,040 Speaker 2: will our laws be, what can and can't the people 193 00:08:34,040 --> 00:08:36,480 Speaker 2: who live here do, And some of those things don't 194 00:08:36,520 --> 00:08:39,440 Speaker 2: cost much money at all. So sometimes the ways the 195 00:08:39,440 --> 00:08:42,160 Speaker 2: government touches our lives the most don't really cost money. 196 00:08:42,440 --> 00:08:45,640 Speaker 2: So government, yes, funds the police, but it's also responsible 197 00:08:45,679 --> 00:08:48,240 Speaker 2: for deciding how they do their job, who they arrest, 198 00:08:48,320 --> 00:08:51,600 Speaker 2: and for what reason. Government doesn't just fund border security. 199 00:08:51,600 --> 00:08:53,400 Speaker 2: It decides who can come in and out. It doesn't 200 00:08:53,440 --> 00:08:55,760 Speaker 2: just fund schools, it decides what will be taught in them. 201 00:08:55,800 --> 00:08:58,599 Speaker 2: So I use the raising and spending framework because I 202 00:08:58,600 --> 00:09:00,360 Speaker 2: think it's the neatest way to lay it all out. 203 00:09:00,400 --> 00:09:03,440 Speaker 2: But again, there's no limits to the types of arguments 204 00:09:03,440 --> 00:09:06,680 Speaker 2: that we can have within that landscape, and our arguments 205 00:09:06,720 --> 00:09:09,200 Speaker 2: about what government should and shouldn't do certainly not just 206 00:09:09,240 --> 00:09:12,360 Speaker 2: limited to dollars, but really to anything that shapes, again, 207 00:09:12,480 --> 00:09:14,320 Speaker 2: the kind of society that we want to live in. 208 00:09:14,360 --> 00:09:15,840 Speaker 2: I think that's maybe a good note to finish on 209 00:09:16,080 --> 00:09:16,480 Speaker 2: great Well. 210 00:09:16,520 --> 00:09:18,640 Speaker 1: I know these are the kind of questions that my 211 00:09:18,800 --> 00:09:21,040 Speaker 1: friends want answers to in the lead up to the 212 00:09:21,080 --> 00:09:24,560 Speaker 1: federal election. And if anyone listening has any questions that 213 00:09:24,600 --> 00:09:27,600 Speaker 1: they want us to answer, slide into our DMS at 214 00:09:27,600 --> 00:09:30,400 Speaker 1: the Daily OS and we will be in touch. That's 215 00:09:30,440 --> 00:09:32,600 Speaker 1: all we have time for on this week's episode of 216 00:09:32,640 --> 00:09:35,960 Speaker 1: No Silly Questions. We will see you next Tuesday, where 217 00:09:36,080 --> 00:09:38,640 Speaker 1: Tom and I will be debriefing at the budget. 218 00:09:39,160 --> 00:09:41,840 Speaker 2: Thanks Tom, thank you Billy. It's been a pleasure.