Australia’s economic freedom

Australia has been rated 3rd in the world for economic freedom by the Heritage Foundation. We still lag behind Singapore and Hong Kong. New Zealand is right on our tail at a very close 4th. On all measures we were above the world average except for on Fiscal Freedom. Our tax rates are too high.

Heritage Index of Economic Freedom 2011

Heritage Index of Economic Freedom 2011

17 thoughts on “Australia’s economic freedom

  1. in my opinion fiscal freedom should be the most heavily weighted. the inability to apply all you earn to your part in the marketplace is equivalent to denying you a vote in democracy. our effective tax rate is over 72%, i believe it is now more like around 80%, which means that 80% of the decisions about how to spend money are made by government. freedom my arse.

  2. If we assumed that fiscal freedom was given a 100% weighting in the index then here is the top ten most economically free nations in 2011:-

    99.9 Kuwait
    99.9 United Arab Emirates
    99.8 Bahrain
    99.8 Qatar
    99.4 Saudi Arabia
    98.5 Oman
    97.6 Micronesia
    97.6 Paraguay
    97.2 The Bahamas
    96.1 Vanuatu

    Personally I don’t see these nations as suitable benchmarks to aspire to. I think the current structure of the index that weighs multiple factors is probably more appropriate. For instance Saudi Arabia gets a “repressed” rating for property rights and I think this issue ought to carry a lot of weight. Hong Kong only get’s a score of 93.3 on Fiscal Freedom but I think given it’s high rating on property rights and the like it is more in the vicinity of what we should be seeking to emulate.

  3. the index doesn’t include RKBA or freedom of speech either. those two would weigh australia far down the list, as well as singapore and new zealand. it should be noted that all those nations on the fiscal freedom scale are also where a lot of smart people hold their money. the bahamas stands out particularly as being famously non-extortionate in its tax regime. also UAE is, unless i’ve missed something, famously the du jour hangout for the nouveau riche.

  4. Just been to see where the UK is. And people still think some of the more extreme nanny statism in Oz that I rant about now and then means migration was a poor choice. I keep telling ’em, it may not be a utopia but it’s certainly feels like an improvement.

  5. don’t get me wrong, in many areas this is a very free country. but in the places it really means something… to me as an oddball social misfit my big issues are being bashed and getting a job. in both areas i have to take matters into my own hands to achieve any degree of success. in 17 years of being in the labour market i have made more money by freelancing direct to my customer base than by begging to government-approved established businesses for work. even cleaning work…

    and the obstacles for that rose ever higher in recent years, i was working as a cleaner at a private highschool and had to leave because of a non-conviction for drug related charges 2 years earlier and another non-conviction right back in 2000 denied me a blue card. one of the teachers whose rooms i cleaned was especially upset to see me go, she’d never had such meticulously cleaned art rooms until i was there. and my supervisor will say i’m the best cleaner they’ve ever had. merit has nothing to do with the job market when you have chronic institutional unemployment created by union driven minimum wage and socialist welfare systems.

    i am basically forced to be on welfare, even though for any given entry level job i am on par with the top 10% of applicants. i think even that my resume which tells the truth just makes these employers of entry level workers look elsewhere because it says i can type 80wpm, i am a qualified graphic and web designer and i can fix any computer problem you throw at me. i am seriously wondering whether i should totally fabricate a resume that makes me look like the 100% loyal long suffering cleaner instead of the jack of all trades my true history shows that i am.

  6. Just wondering if anyone knows what data is taken into consideration and account when deciding the economic freedom score????????????????????

  7. The Fiscal Freedom stat isn’t telling the whole story. Australia is a country which taxes and spends, and thus is outscored in Fiscal Freedom by the likes of the United States, Greece and Japan (to name a few I noticed eyeballing the list), all of whom skip the taxing part and get straight to the spending, running up huge debts in the process.

  8. Chris -Mises et al often said the real cost of Government is the economic activity diverted and distorted to pay for the total costs of Government.

  9. Terje – I know, my point was directed at loki. Fiscal Freedom is a much less important stat than Government Spending. If governments still spend a lot but finance it with debt, rather than taxation, that makes it worse, not better.

  10. the difference between the two is the borrow and spend causes the inevitable pit of insolvency that it digs for the future. for the short run rather than the long run the tax and spend is more sustainable but it comes at the cost of reduced available private money spending overall. both options have downsides one short-run the other long-run. better would be to cut spending AND tax AND *never* borrow for government spending at all (or give that tax money to other countries as ‘aid’). private business, especially small to medium, serves the needs of consumers at a much higher efficiency than large business that has bought privileges to allow it to be less efficient and stifle competition with red tape. in actual fact the tactic used in australia stifles new businesses far more than you see in the USA, but as the largesse of the government/corporate partnership increases the same squelching of the entrepreneur class occurs increasingly. i’d rather do business where there’s less licenses and duties and taxes, because i find lawyers and accountants to be parasites. the entrepreneurial spirit was strangled here in australia a lot longer ago than it was in the USA.

  11. Most of this is non-sense.

    The definition of things are slanted to western approches.

    For example if you are in a country where you have to pay 1% land rent, then don’t have economic freedom to actually buy land. But if you are in a western country with 2% propert tax, then you will actually get a higher score for economic freedom!

    This is why many of the scores for china are rediculous. People don’t understand how basic things work. You don’t ‘buy’ a block of land like you do in the west, you buy into a community, you get a house, a dam for fish and a grid down by the towns river for your rice. You have full ownership over it, but because there are not individual land patents this ‘freedom’ gets a 0 rating.

  12. There is one other problem with it that I can see, which is that is several areas they count “number of laws” not “quality of laws”. So to give an extreme example “no childcare centres run by convicted pedophiles” would count as one law, while “no childcare centres run by blacks” would also count as one law. Of course trying to figure out which laws infringed freedom more would be very difficult, but the results should still be approached with a little caution.

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