Spending and taxing

One of the big international political economy debates concerns whether individual states can pursue their own approaches to taxing and spending, or whether they are forced into uniform policy approaches by global economic, political and legal forces (see Chapter 6). This debate has important implications for a range of other approaches to understanding politics. If international forces do determine policy, then any attention paid to domestic political behaviour, institutions and discourses (Chapters 2, 3 and 5) seems misplaced. Indeed, the very idea of democratic control of these major policy areas is cast into doubt (Chapter 1). The key determinants of taxing and spending are purely structural and international (see Chapters 5 and 6). This chapter addresses these issues directly, and makes the case that domestic factors are the key to understanding Australian government policies on spending and taxing; it also argues that alternative policies could have been adopted.