Tax-funded profits in national disasters and daily life
Posted by Dave Bath on 2011-01-24
As government (thus citizens) will pay for at least some of the rebuilding after the floods in eastern states, how much of this should become subsidized private profit, and what, above minimally decent private goods, should be subsidized?
Consider the starkest example of government/taxpayer funds used in reaction to a disaster like these floods, an evacuation camp:
- Should the size of the tent, beds, the amount of food, provided to an individual increase with the value of the property from which they were evacuated?
- Should price-gouging by suppliers of tents and food be permitted, or should those goods be subject to compulsory acquisition by the government, with modest compensation?
Why should answers to the above questions be inconsistent with post-disaster reconstruction?
Why should answers to the above questions be inconsistent with our treatment of those in dire need, on a daily basis, if those needy lack the good fortune to have lived in one particular region at one particular time?
Let’s take housing, for example.
Funding to rehouse displaced folk is most efficient when time and materials per household is minimized, when the living space provided is at the level required for human dignity and no greater. Construction, however minimally subsidized, of housing with greater per-capita living space (taking into account the ability to share bedrooms), effectively creates greater per-capita demand for resources (both time and materials), increasing the price of those resources, and increasing the demand for taxpayer funding.
Similarly, building codes for resistance to flooding should be applied – if a house needs more funds to repair and get up to flood-resistant standards than it would cost to bulldoze and rebuild with minimal floorspace, then bulldoze, and build two smaller residences that do meet flood-resistant standards.
If general social welfare is means-tested, if general social security is cut based on income and assets, if an unemployed person with a million in the bank is refused the dole, then funding for repairs and reconstruction of private goods should be similarly means-tested.
That means-tested transfer of public funds to private individuals should be applied both to those receiving the goods and services, but to the suppliers, that a proper proportional of supplier income be spent productively on service provision, just as government talks of introducing constraints on what those on welfare can buy with their welfare benefits.
If negative gearing of residential properties is considered an efficient way to provide housing (and I don’t think so), then it’s reasonable to, at least temporarily, permit negative gearing only in areas with the greatest housing pressure.
If taxpayer funds, and regulations to prevent profiteering by the wealthy, are valid in one set of circumstances, then they are equally valid in all circumstances unless everyone is provided with the basic requirements for human dignity.
The floods provide a stimulus to discussions of what we consider to be a fair go, and how human needs should be met. Whether there has been a flood, or whether just because of day-to-day economic imbalances, the basic needs of a human being are unchanged, any obligation of government to provide for those needs remains unchanged.
If there is any good to come from these floods, we should make the most of it – and consider what our feelings and financial responses to the floods mean to the general way we manage production and distribution of resources to all citizens, anywhere within our nation, at all times.
- "Funding repairs for floods versus financial meltdowns" (2011-01-27)