Won’t the government just waste our money?

There is no conclusive evidence that public spending is more wasteful or less efficient than private sector spending. On the contrary, the government can benefit from economies of scale and coordinated procurement mechanisms that ensure greater value for money, than in the private sector. 

Public spending has direct and indirect benefits for all of us, including generating jobs and stimulating the economy. In addition, public spending is not driven by profit maximisation and governments are accountable to the public.

As residents of New Zealand, we all gain immensely from government spending. Tax-funded spending in areas like infrastructure, healthcare, education and social security make a material difference in all of our lives. Far from being wasted, this public spending is the foundation on which we can build meaningful lives. By increasing government revenue though a more equitable tax system, we can invest more into these critical areas and shift the public spending mix towards providing services and investing for the future, with a lower proportion going towards servicing debt.

Around the world, it is becoming increasingly clear that the push to privatise public services has funneled risk-free benefits to private investors, underwritten by the state, and resulted in degraded service delivery and higher costs to consumers. The reason for this is that the private sector has different incentives to government: it is concerned with profit maximisation first. By contrast, government does not seek to extract profits from service provision. It is also more accountable to the users of services, through democratic channels.