I am glad to see more people doing alternative budgets, but as always I have some concerns:
- It is subject to the same criticisms as Sir Roger’s budget – namely the trade-off between equity and efficiency is not based on the revealed democratic process from the previous election … although having a transparent budget DOES mean that people know what they are voting for in the future.
- The limiting scope of government in there budget is far too extreme – even if solely on efficiency grounds. Why? It ignores any scope for co-ordination issues and the such in government policy. However, the size of this issue depends on relative value judgments – so I really just think they are saying that they have a value judgment that other co-ordination issues are irrelevant, which is fair enough I guess.
- Also – it presumes optimal redistribution equals zero, which is highly unlikely given that luck and the such does exist.
- It targets a tax rate of zero while still having government spending – based on a belief that voluntary provision of funds will be sufficient. However, I disagree. If we want any central government we have to have some type of “coercive taxation”. Setting the tax rate to zero is effectively the same as asking for anarchism as it implies that this specific governmental institution will disappear into irrelevance.
Fundamentally, redistribution is a valid role of government – and the libertarian party bases its policy on the idea that it is not. There is no theory – even among many of the most right wing economists – that justifies zero redistribution. However, they are transparent about their value judgment here and they are consistent between budgets, so that is good of them.
So now we have an ACT and a Libertarian budget – the National (government), Labour, and Green ones will be still to come (if there are any others yell out to me). Very exciting.