Government and the private sector are good at different things, and there are gains from trade. Thus government has certain assets at its disposal. One of those assets is the taxing power. That asset should be ‘worked’ wherever it gives rise to value.
Bruce Chapman has spend a substantial proportion of the last two decades of his life outlining the various ways in which the basic mechanism of HECS can be expanded to all manner of things. Like collecting fines, and helping farmers with droughts and funding maternity leave. As Bruce says, in principle, everything is HECSable. Indeed it is and it’s a worthy agenda which Andrew Leigh has also supported in a column. (I suggested income contingent student loans to Senator Susan Ryan in the corridors of Parliament House in 1983 or 1984 when she was Education Minister, but she wasn’t very interested and said it would be a lot of trouble politically).
I’ve also argued in favour of the Aussie Mac proposal on the grounds that extending the idea of the government as a guarantor of certain lending as an extension of its role as the lender of last resort and underwriter of financial liquidity is a worthwhile thing to do.
Be that as it may, I wondered whether Troppodillians might like to propose in comments other such activities where governments can, by building prudently on their own existing institutions and traditions, contribute to the greater good by helping to extend markets or otherwise increase productivity. I’ve not been precise enough about what I’m after and what I’m not after. I’m not after standard arguments about ways of extending government influence or intervention (not that I’m necessarily either for or against them). I’m after means of making more of the institutions that government has already built or could conceivably build. (I realise this isn’t a very precise clarification either – which is too bad. But it’s late, I’m hoping you have a bit of a feeling for what I mean, and that you’ve got some ideas you can offer.)