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Ron Kitching, “Slaves of an omnipotent PS,” The Australian, March 2, 1984, p. 6, as a letter to the editor.

SIR — The Labor Party is once again conditioning the reflexes of the community into accepting the idea of the iniquitous capital gains tax. With a resources tax already sowing the seeds of destruction of the offshore oil industry the destruction of the gold mining industry seems imminent by the application of a resources tax.

“Resource” taxation, which simply means additional taxation for the rest of the mining industry, will follow.

Prime Minister Hawke has once again issued the veiled threat that the load of furnishing Labor’s social objectives will be financed by those in the community who can most afford to pay.

These days very few can pay the additional tax out of profits. In the productive industries, profits are becoming as scarce as a feathered frog. Therefore, like dividends being paid from capital, taxation of capital will be the end result. That is in addition to the disguised tax of inflation which taxes us all anyway.

While all of the above is going on at an ever-increasing tempo, capital formation in Australia is dwindling. It is drying up.

Whether we know it or not and whether we like it or not, there is one thing and one thing only which in the past has given Australians a higher standard of living than, say, that of our Asian neighbours — and that is a higher investment of capital per head of population, invested competitively in the tools of production.

It is high production at competitive prices that makes a person, a State, a nation rich. A modern living example of what good policy produces is how Japan has overtaken Australia in living standards because they work, save, invest and work some more, producing goods for which the world scrambles at competitive prices.

If the present inane policy of more tax and less work continues, we shall soon be overtaken by Singapore and Hong Kong as well as many others who are in step with the world community.

Where is the spirit of pioneering Australians that they meekly submit to not only ever-increasing taxation but the grim reality of becoming slaves to an omnipotent Public Service, which busily supplies them with rules, regulations and services which they neither need nor can afford.

Budgets should be balanced and total taxation must be pegged at no more than 20% if we are as a people to remain employed and prosper as a nation. What can a fat, indulgent, overburgeoning Public Service contribute that we can sell to the rest of the world at competitive prices?

What we want is a government which will dramatically decrease and properly control the activities, size and power of the bureaucracies, including the “educational” bureaucracies, and genuinely lower taxation to the level which will permit saving and capital formation in Australia.

RON KITCHING
Rockhamption, Qld