How to Finance Government

Libertarianz have received a number of responses to their 2003 Alternative Budget released last week ( http://www.libertarianz.org.nz/lotsofnumbers ) which Libertarianz Finance Spokesman Stephen Berry answers here today.

Berry explains that Libertarianz' budget outlines the party's plan to reduce all taxes to 15% for the next five years, and to zero thereafter. "The budget," he says, "is designed to make a peaceful transition from our current state to one in which government is constrained to its rightful job of protecting our rights individually; one in which the moral cannibalism of robbing Peter to enrich Paul has ceased. This budget is designed to demonstrate that such a transition is possible. Moreover," asserts Berry, "we would say it is absolutely necessary."

In those five transitional years, he explains, all assets would be sold off, except those relating to police, law and order, justice and defence, ie., those, he says, required to defend the rights of individuals from the use of force.

Berry affirms that over that time all liabilities would also be paid off, such as government debt, and payments to those who previous governments have pledged money to, such as pensioners and those currently receiving the invalid and disability benefit.

These liabilities would be limited however. Only those currently over 55 would receive a pension from the government, and other welfare beneficiaries would only receive support for a finite time. "Assets sold would go towards this one-off allowance."

Libertarianz have received a number of responses to these policies since their announcement, and Berry takes the opportunity here to answer some of the questions that have been put to them.

Frequently Asked Questions About the 2003 Libz Budget:

Q: How are welfare beneficiaries going to survive without the continuation of benefits?

A: "Libertarianz believe that human beings are capable of much more than merely surviving on handouts. Left to their own devices, Libertarianz believe that most beneficiaries would simply get out and earn their own money. Getting government out of the economy would assist them to do so - in fact, it will assist all of us to do so! Libertarianz understand that some beneficiaries would take time to adjust to these changes, and the budget's asset sales programme makes provision for the support of these beneficiaries for the limited time necessary.

"In addition, Libertarianz believe that the economy would quite literally boom without the burden of taxes, regulation, and big government on its back. Under a fully flexible labour market for instance, the opportunities for even very low-skilled people would be massively enhanced.

"And finally, it is true that there may be some, a very, very tiny proportion of those who currently receive welfare benefits, who truly cannot support themselves. Libertarianz fully support the activities of voluntary charities, and encourage those who are concerned about the welfare of others to put their money where their mouth is and to support those charities."

Q: Why do Libertarianz propose to increase defence spending by so much? Are you planning on warmongering?

A: "Only a simpleton would express the view that we live in an incredibly benign defence environment. Libertarianz understands that there are people and governments who do not believe in freedom. Libertarianz would ensure that New Zealand is able to defend itself against attack from such people. New Zealand's defence priorities under Libertarianz would focus solely on defence against attacks on New Zealand(ers), or on its like-minded allies.

"That said, Libertarianz foreign policy would be based on two words: Free Trade."

Q: Why would a Libertarianz government continue to fund a police force, law & order and justice? I thought libertarians believed in no government.?

A: "Libertarianz believe that rights are vested in individuals, and that these rights must be protected from those who do not respect rights. A rational government is the means by which individuals' right of self-defence is brought under objective control.

"In other words, a Libertarianz government would implement the tools for protection of individuals' rights to life, liberty and property. Conversely, we will remove those tools of government oppression that currently exist.

"Libertarianz note also that the costs of providing these functions would reduce given the abolition of 'victimless crimes.' These include crimes such as prostitution and drug-taking. Libertarianz do not promote these activities, however we recognise the rights of consenting adults to make their own choices in life, and not to be imprisoned for them. (We do not recognise children as an excuse to take away the rights of adults - however we do recognise the obligations of parents to take responsibility for their children.)"

Q: Surely voluntary funding of government will never work!

A: "Libertarianz note several points in relation to this issue:

- "Because the government's activities would be massively reduced, the amount required to fund government is likewise reduced. As we reported in our budget release only 2% of GDP is required to pay for the legitimate functions of government, representing an average of $20 per week per person - less than many of us pay for insurance each year, and for the same reasons.

- "Without the coercive hand of government bearing down on them, people tend to become much more benevolent towards others; and when acting as the protector of individual rights instead of being their chief violator, people might be expected to see such a government as one worthy of voluntary support. People might also begin to understand that the protection of their rights is in their interest. Certain industries such as the insurance industry would also be especially interested in the protection of property rights and would be expected to contribute heavily.

- "Libertarianz note that many legal and policing functions can be privatised, though not all. The precise details of that process can only be worked out when things move closer to that point. At this stage, Libertarianz is not particularly concerned about how the last 5% or so of taxation is removed. Our practical aim in the first instance is simply to get taxes massively reduced - on its own a massive job - and to work to ensure the permanance of such a reduction."

Q: You haven't got a hope in hell of ever getting these policies in place, so why bother?

A: "The history of humankind has been a very long story of savagery and tribalism, but if civilisation is to survive it must inexorably shift towards individualism. Such is, after all, the foundation of a moral and practical society.

Libertarianz have set out the necessary goal posts, and we will continue to encourage others to play towards them for as long as it takes."

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