A government spends money on administration and on the services and benefits that it delivers to the population (3.2.3). One of its most important decisions is its budget for revenue and expenditure (3.5.2), upon which individualists and collectivists have fundamentally different approaches:
- Individualists want the State to play a minimum role, and they believe that the market should be allowed to determine what is needed – so that people are as free as possible to buy the services they want, or to buy insurance, or to support each other. This is a neoliberal position (22.214.171.124); they see hard work as a virtue, and income tax is seen as penalising it.
- Collectivists believe that the State should protect those who are disadvantaged by guaranteeing some socio-economic rights, using taxation to obtain the necessary funding – and thereby also reducing inequality, as discussed later (126.96.36.199). They see this as socialising personal risk by taxing those who are more able to pay.
These views can be deeply held. The centre ground of public opinion, though, shifts between these contrasting perspectives – and people are able to influence governments if they have ‘a hand on the joystick’ (188.8.131.52).
Governments have to negotiate the answers to the five key political questions that are addressed in the following sub-sections:
- Which services should be publicly funded for some or all of the population (184.108.40.206)? Health and education are both contentious issues.
- Who should provide the chosen public services (220.127.116.11)?
- What should be the level of benefits, such as pensions and welfare, to help the needy (18.104.22.168)?
- Are there investment projects that the government should provide funding for (22.214.171.124)?
- What levels of taxation and government borrowing are needed, to pay for its spending (126.96.36.199)?