Features Australia

Addicted to freebies

Voters and governments both

31 May 2025

9:00 AM

31 May 2025

9:00 AM

For my sins, I need to read the federal and state budget papers. Believe me, there is a great deal of fiction contained in the pages although it is neither well-written nor entertaining.

It has become increasingly disheartening to read budget papers as more political propaganda replaces serious economic analysis. But one of the most depressing developments in both federal and state budgets is the ‘freebie’ – handing out free stuff to voters, generally on a universal basis.

Now some people might argue that the ‘freebie’ phenomenon really took off with the implementation of the Family Tax Benefit (FTB) system by the Howard government. Mind you, ‘free’ university fees was a forerunner.

Under the FTB arrangement, taxpayers with dependent children are able to gain a tax benefit depending on the age of the children and the income of the taxpayer. There is an additional benefit for single-income households.

Was this the serious beginning of middle-class welfare that former Labor finance minister, Peter Walsh, worked so hard to expunge? I’m not so sure about this.

The rationale for the FTB system is that people should be taxed on their equivalised tax base, taking into account the number of people who depend on the assessed income.  This is common around the world although it is implemented in different ways. Tax splitting, for instance, with allowance for the age of children, is a common method.

The rising popularity of free stuff really post-dates the FTB’s introduction, becoming common from the second half of the second decade of the century. What I have in mind here is specific, directed programs such as contributions to the cost of children’s sporting activities, back-to-school grants, free-of-charge preschool, energy rebates of various sorts, free public transport for some users and the list goes on. They are generally handed out without any means testing. State governments have grown increasingly addicted to these types of initiatives, on both sides of politics.

I recall New South Wales premier Dominic Perrottet, goaded on by the dim-witted Matt Kean as state treasurer, bringing in these sorts of programs, the main effect of which was to drive up the cost of the provision. For instance, all parents of children of a certain age received sports vouchers to be used on swimming lessons, sporting club fees and the like.


The politics was very ‘jolly hockey sticks’ stuff – doing physical activity and participating in sport are good for the kiddies. The cost of doing so is a barrier for many parents. The government will do the right thing and help them. And written in invisible ink was the message that voting for such a generous and insightful government is a sensible option.

But overnight, the cost of these services increased, pretty much in line with the subsidy. Where swimming lessons might have been $30 a session, they became $50. Where enrolling a child in club sport for a season might have been $250, it was suddenly $400.

Of course, for anyone who has a working knowledge of how these things work, this was no surprise. With the supply of these services essentially fixed in the short term, it was perfectly rational for the providers to jack up the fees.

But here’s the worst of it, even after this program was ditched, the cost of swimming lessons, sporting club fees and the like haven’t reverted to their previous levels. They have simply stayed high, blocking some families on low incomes from funding their children’s participation in sport.

Just last week we learnt of the Victorian government’s decision to provide free of charge public transport to all children up to the age of 18 years of age. (The ‘free’ pads and tampons program was announced at the same time.) In my experience, it might not cost as much as the Treasury boffins think because the young ’uns seem very disinclined to swipe on and off, particularly on the tram.

It brings a tear to my eye – think, irony here – seeing those private school children at a mere $40,000 a year jumping on and off the tram or train courtesy of the Victorian taxpayer. Gosh, their parents must be so grateful, if they are even aware.

But the message is clear: any time of the day or night, all children must be able to use public transport for ‘free’. Where once they might walk a stop or two or three, it’s just easier to get on the tram. Evidently, this policy will relieve some of the cost-of-living pressures families are feeling. According to the girl team of Jacinta and Jaclyn, Premier and Treasurer of Victoria respectively, this is a ‘good thing’.

And, of course, on the day of their 18th birthday, they will become completely compliant in paying the required fares, having purchased the appropriate myki card (like Opal) before the event. Or am I being delusional here?

The broader point is that a deep sense of entitlement, of being handed out ‘free’ or highly subsidised stuff, is any early learned experience for young people who then attain the age of voting. Is it any wonder they want more? Is it any wonder that their real or virtual budgets contain several items under the heading ‘to be funded by governments’? Do governments begin to act in loco parentis?

We also see this at the federal level where for several years, there have been energy rebates available on a universal basis. Jimbo is getting worried about the cost of this endeavour, but it was hardly surprising that the federal rebate was extended until the end of the year, what with the election and all.

There was a time when Queenslanders were receiving a $1,000 energy rebate from the state government as well as a separate rebate from the federal government. The fact that these rebates were enjoyed by people owning more than one home didn’t seem to worry any of the political masterminds: universal meant unrestricted.

It’s not as if some of these subsidy/free stuff schemes couldn’t be means-tested, particularly by the federal government which has the information to limit access to those on lower incomes or those on defined welfare payments. It’s slightly more difficult for state governments but there are ways of doing so – the holding of a Health Care card, for instance – but the politics point to the benefit of making access universal, thereby hoovering up more votes.

Once upon a time, many people felt a degree of shame accepting any handouts from governments. Being on ‘susso’ was kept quiet and any paid job was regarded as preferable. I recall my Pa refusing to accept an Age Pension cheque sent by the Whitlam government – the Age Pension was made universally available very briefly – and muttering something along the lines that he wasn’t about to be bribed by that filthy lucre.

These days it’s more common for people to maximise the amount of assistance they can extract from various government programs. There is no sense of shame in doing so even though the costs of this assistance must be met by taxpayers, current and future (to pay off the debt). There may be some faint realisation that a day of reckoning could come one day but that’s for another day.

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