The almost $200b a year we give away to people who really do not need it

Costello, of course, was interested in clamping down on government spending on the welfare side: the dole bludgers, the health blow-out, the public-education black hole of waste, and so on.

Costello said the best way to ensure the budget did not blow out was to prevent any new welfare scheme from getting up in the first place and to monitor spending as it happened so it could be curtailed.

He was right. But the new welfare schemes to be wary of were not the ones that helped the needy, but the ones that gave hand-outs to the already wealthy.

The Coalition's fix for an unbalanced budget always seemed to be to cut government help to people who really need it.

However, Australia is in a $27 billion fiscal hole, not because of funding for the needy, but because of hand-outs to the distinctly unneedy. The $27 billion could be easily picked up.

Information from the Mid-Year Economic and Fiscal Outlook under the charter and Australian Taxation Office reports shows massive corporate welfare and high-wealth tax deductions that, if stopped, would not only repair the budget deficit but allow the government to provide genuine free universal health and dental care; excellent free public education at all levels; enough social housing to end most homelessness; a raft of sensible environmental policies; and lower income taxes for people on low and middle incomes.

Some of the welfare-to-the-wealthy measures and the annual cost of them are as follows:

Sure, not all of it could be easily picked up, but the government could at least make some inroads into it. Most of these concessions to the already wealthy were created in the past 25 years and all of them have ballooned since inception.

True, Labor has done some things with childcare, student debt, and tinkered on the edge of social housing, but they amount to nearly nothing when compared to the nearly $200 billion a year of largesse going to people who do not need it.

Unfortunately, the 2019 election result has been read as an edict in stone that promising to take away tax perks for the wealthy is electoral suicide. It has certainly led to Prime Minister Anthony Albanese being timid to the point of being moribund.

But it has resulted in a dangerous failure to stem the increasing fiscal outflows caused by ever more people taking advantage of the tax concessions, many of which were granted by Costello.

For example, the mad franked-dividends scheme to give cash back in the form of a tax rebate to investors who paid no tax in the first place, cost $500 million in the first year. Now it is 14 times that. People have flocked to the housing market to take advantage of the capital-gains tax concession, ramping up negative gearing deductions as they go.

The Charter of Budget Honesty and last month's MYEFO have honestly revealed the unfairness of the tax system and the inequality it has inflicted in Australia (thank you Peter Costello).

We should be asking what is more important: health, education, and fairness or handouts to the already wealthy? What do we want as a nation? The tax system provides the answer to those questions. And they are not pretty.

We are not the land of the fair go. Nor are we the compassionate country we like to think ourselves.

Worse than that, having put in place various reporting mechanisms (including Closing the Gap for Indigenous Australia and immigration numbers) the maladies and their solutions stare us in the face.

And the seven quarters of negative per-capita growth (a big recession for all those on middle or low incomes) could also be fairly easily fixed. The mid-year update revised up the rate of net overseas migration from 260,000 projected in the budget to an out-of-control 340,000. With so many more people to spread the wealth around, no wonder we are going backwards. We should get back to the 70,000 level before the Howard government ramped it up and Albanese ramped it up further post-COVID.

MORE CRISPIN HULL:

The government should take several big tax steps. It should grandfather a lot of the concessions by restricting them to a maximum of what the taxpayer claimed the previous year. This is what happened with the tax deductibility of health gap fees. There was hardly a murmur of protest. And health deductions have more merit than franking credits and negative gearing.

Second, it should abolish wage and salary work-related expenses and replace them with an automatic deduction of, say, $4000. At a stroke, millions of taxpayers would be relieved of doing a tax return other than ticking off the ATO's auto-fill and they would also get a tax break. Too much of the tax burden is borne by labour and not enough by capital and consumption.

Third it should do what the UK government is doing from January 1, 2025: imposing the 20 per cent VAT (its GST equivalent) on private education fees and use the money to reduce or abolish HECS and HELP debt.

As the government picks up the revenue it could, for example, start a universal dental scheme with at least a free annual check-up, with expansion to other procedures down the track. Surely that is more important than subsidising fees for some very wealthy private schools.

Labor is going to have to put 2019 behind it and pick up the revenue loss and channel it to people who need it. Otherwise, voters will rightly ask what is the point of a Labor government?