When I look at tax, I get increasingly concerned with how comfortable we are becoming with the government’s lack of accountability and productivity.

I’m not talking about slashing spend. I’m talking about the fact that the government has been delivering less outcomes per capita for more money per capita, and the only response to the Australian taxpayer is ‘spend more money’.

That’s what the CGT debate should be really about.

We are getting less bang for our buck. Across almost every service that actually matters – schools, hospitals, prisons, the roads and rail we are endlessly promised – we are paying more per unit and getting worse outcomes. That is the textbook example of a government failing in management, failing to manage the public service and failing to deliver value for money.

If this was anywhere else, we’d be asking hard questions rather than accepting radically higher taxes (47 per cent income tax, anyone?).

I notice this because I run a company. Founders live and die essentially on a single number: output per dollar. Every hire, every tool, every dollar of spend has to earn its place, because if it doesn’t the business dies. There is no bailout (other than dilutive VC funding or debt), no supplementary appropriation, no press release that fixes broken unit economics. That discipline is not fun, both internally and in the market, but it is the thing that makes the private sector work.

So when I look at government, I’m not being ideological. I’m behaving as a taxpayer should. I want value for money. I want to ask the obvious question: What did we get for that? Increasingly, the honest answer is ‘less than last year’. When you spend your life obsessing over unit economics and then watch the largest enterprise in the country (our government) do the exact opposite with your money, frustration is the rational response.

And this shows up clearly in the numbers. The Productivity Commission finds that the non-market sector – overwhelmingly government-supplied health, education and care – has been going backwards on labour productivity since 2014, with the decline steepening after 2022 (Productivity Commission). Since 2021, employment in those sectors has surged about 24 per cent, more than double the 9.6 per cent in the market economy – more people, more money, flat-to-negative output (Productivity Commission).

The input side confirms it. Public sector headcount grew 3.3 per cent in 2024-25, roughly double population growth, with Commonwealth jobs up 5.6 per cent (ABS). Government spending now sits near 26.9 per cent of GDP (Trading Economics). The costs are staggeringly high.

You can find this in almost every case you look at across the market. I think per capita is the right way to do it as it controls for population growth and expansion.

Schools. Real spending per student rose about 14 per cent over the past decade. Over the same period, Australian PISA maths results fell from 524 to 487 and reading from 528 to 498 – the equivalent of students being more than a year behind where they were in 2000 (The Conversation; OECD PISA). More money in, less learning out.

Prisons. Real net operating expenditure per prisoner per day has climbed 22.9 per cent since 2015-16, to $326 a day (Productivity Commission, RoGS). And the core outcome – not reoffending – is getting worse: more than half of people who leave prison are back within two years, a national recidivism rate of about 52.5 per cent and rising (Productivity Commission, RoGS). We are paying a premium for a service that is failing at its one job.

Infrastructure. The cost of building land transport infrastructure has risen 51-53 per cent since 2010-11 – as much in the last three years as in the preceding decade – while major projects run a mean cost overrun of 23 per cent (BITRE; Centre for Independent Studies). We are paying dramatically more for each kilometre we manage to actually deliver.

Hospitals. Public hospitals are the fastest-growing line in government health spending, north of $80 billion a year, yet Australians now wait nearly twice as long for planned surgery as they did two decades ago (Grattan Institute; AIHW). Even where clinicians are doing heroic work, the system is absorbing money faster than it is turning it into access.

How did we get here? The rot starts with how we hold the public service accountable. For much of the public sector, national accounts value output as equal to the inputs used to produce it – by convention, spending is the output (APS Commission). If you define productivity so it can never fall, you will never manage it. Layer on the absence of any competitive pressure, a culture that treats headcount as a proxy for seriousness and refuses to sack people, and a political system that rewards announcements over delivery, and you get exactly what we have: an enterprise with no incentive to deliver better outcomes.

Faced with declining productivity, every government’s instinct (both Labor and Liberal) is not to fix the machine – it is to feed it. Commonwealth public hospital funding is set to hit a record $220 billion over five years (Grattan Institute). The NDIS grew at more than 20 per cent a year at its peak and still runs near $49 billion (NDIS). More funding announced into the same broken pipes. And we wonder why our national debt is stuffed and why we are seeing no meaningful improvements to the deficit, whilst being asked to handover more and more money to Canberra.

Imagine running a business this way. A product line’s output per dollar falls three years running, and your response is to triple its budget without changing a thing about how it operates. You would be laughed out of your own boardroom. In government, it’s called reform.

This is mismanagement at its most expensive – and it is precisely why the private sector is now in open revolt. Business is turning up to the government’s own productivity roundtables with the same message, because it is our productivity, our capital and our tax base being quietly eroded (Treasury). We’re all screaming about CGT not just because it impacts us. It’s because we are being asked to fund a completely out of control government.

None of this is unfixable, and none of it requires slashing services people rely on. It requires managing them. Measure outcomes, not inputs – publish productivity for every major service the way we publish it for the market economy. Tie funding growth to delivery, not to the political calendar. And treat every dollar of taxpayer money with the same ruthlessness a founder treats their last dollar of runway, because in a real sense it is exactly that. Taxpayer money is runway.

The private sector has spent a decade being told to do more with less. It is well past time we asked the public service to do the same. It’s time we end the era of unproductive government.