Dear Chris Pyne: Always Worry About The Money

While governments with bad ideas are dangerous, governments with good ideas can be even more dangerous, implementing their “ideas” by unwittingly eroding the very values that sustain them.

Turnbull’s recent proposal to drive growth will send a shiver down the spine of every fiscal conservative. One already has a sense of wariness that Innovation Minister Pyne was told ‘to release his inner revolutionary’ but what is genuinely unsettling is Turnbull’s remarks ‘not to worry about the money.’

Hopefully what we will see is innovation in its truest sense; lower regulation, increased flexibility for business and maybe, just maybe a lower company tax rate. If firms have greater ability to invest in research and development, if newer and more efficient technologies are introduced in less time and with less hassle to the market and if employees are hired on merit – we will see a flourishing of technological advances. This is indeed hopeful in light of suggesting a change to the tax act that will encourage angel investing.

However, ‘support for start ups’ rings various alarm bells – indicating that funds will go into various companies simply because they are in the technological industry. The potential corruption of this “idea” makes one question why we have an “Innovation Minister” in the first place. Leading a department with the power to impact the business decisions of an entire industry obliges Chris Pyne to worry about nothing but the money he is about to receive from us.

Any project undertaken by a company must think first and fore mostly about the bottom line – carefully using the allocated funds from scrutinous investors. But if it’s just the general population who are forcibly told to hand over a percentage of their income – then of course it is technically viable ‘not to worry about the money’ and not to worry about the outcome either.

And whilst tax dollars are of paramount concern, there is also the issue of rent seeking that comes with subsidised innovation. The impact on the technological industry will be negligible in the long run, but positive in the short run –a win win situation for any politician with only a few years in office and a dream to leave a positive legacy behind him. There is significant difference behind companies that are funded by governments and companies funded on their own merits. Whereas the former depend on the whims or the favours of a particular incumbent in charge, the latter depend on the quality, service and innovation of their product. Competitiveness and productivity are the key elements of a sustainable company – enabling them to be profitable in the long run. This is only possible when they are independent, not when they are receiving welfare cheques from the government.

The role that government plays is an important one and it can significantly encourage the growth of innovation. This is done however, by minimizing regulation, company taxes and labour laws. Companies do not need the money they haven’t earned – they need the freedom to be able to earn in the most innovative way possible.

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