Treasury chief's admission that revenue 'must come from somewhere' exposes Canberra's laziest belief - and why the nation's in the mess it is, writes PETER VAN ONSELEN

By PETER VAN ONSELEN, POLITICAL EDITOR, AUSTRALIA Published: 02:16, 29 May 2026 | Updated: 02:16, 29 May 2026 When Treasury Secretary Jenny Wilkinson told a forum of economists that revenue 'needs to be raised from somewhere', she wasn't making a neutral observation. It was an admission of bureaucratic complacency. She laid bare modern Canberra's lazy assumption: government spending is fixed, the state only grows, and the purpose of taxpayers is to fund its next expansion. But revenue doesn't have to be raised from somewhere. The government can simply spend less. That possibility now seems unspeakable, unthinkable even, within the federal bureaucracy. The spending state is treated as inevitable, while the tax base is endlessly adjustable. When a program expands, the conversation immediately pivots to how to pay for it. Rarely does anyone pause to ask whether the Commonwealth should be doing it in the first place. Australians aren't anti-government. They expect functioning hospitals, secure borders, equipped defence forces and a reliable safety net. Competent government is necessary, but endlessly enlarging government is not. There is a vast difference between a state that performs core functions well and a fiscal Leviathan continuously expanding its claims on national income. This expansion rarely announces itself. It arrives incrementally as a fairness adjustment, a temporary offset or a closed loophole. The cumulative result is an intrusive state heavily dependent on extracting revenue from private effort. When Treasury Secretary Jenny Wilkinson told a forum of economists that revenue 'needs to be raised from somewhere', she wasn't making a neutral observation With Australia's tax-to-GDP ratio near historic highs, claiming revenue has to come from somewhere is an evasion of fiscal responsibility. The Commonwealth taxes, regulates, subsidises and redistributes endlessly. That dynamic is glaringly obvious in the debate over capital gains tax increases and cuts to negative gearing. Publicly, Labor has sold its housing agenda as a supply-side crusade, with ministers promising to 'build, build, build' to address a 'longstanding housing shortage'. Yet at that same forum, Wilkinson gave the game away on housing - bluntly describing the tax elements in the budget as 'really a bit more about changing the distribution of housing ownership' than increasing supply. Supply-side reform means building homes. By the Secretary's own admission, this policy doesn't solve a supply crisis created by zoning constraints, infrastructure bottlenecks and mismatched migration. It is redistribution dressed up as supply. There is also a deeper flaw in the modelling. Retrospective 'what if' exercises are dangerous when they pretend tax changes won't alter behaviour, because they usually do. Investors, savers and landlords don't sit passively waiting to be taxed more. They restructure, defer gains, shift risk or leave entirely. A model that assumes away these responses reveals the intellectual laziness of static thinking. Capital is mobile, investments are discretionary and risk-taking isn't an act of charity. Treating investors as a captive revenue source may satisfy a distributional goal, but it drains the private capital needed to lift productivity, wages and growth. She laid bare modern Canberra's lazy assumption: government spending is fixed, the state only grows, and the purpose of taxpayers is to fund its next expansion The private economy is not a reservoir for Treasury to drain whenever the spending machine requires feeding. This bureaucratic mindset gets the economic relationship backwards. Wealth doesn't begin as government money. The burden of proof must sit with the government to justify why it needs more, not with taxpayers to explain why they should keep it. Why can't government become more efficient and more focused? The burden is even heavier because of bracket creep - the hidden tax increase Canberra rarely admits to. It means governments don't need to legislate higher rates to grab more private income. Inflation and wages growth do the job for them. This one-way ratcheting up of public spending is unsustainable. Emergency interventions become baseline obligations. Temporary programs create constituencies demanding permanent funding. The government expands in a crisis - as it did during the pandemic - then consolidates and keeps expanding after it. The great omission from this debate is productivity. A richer country can afford better services with less fiscal strain. A stagnant economy fights over distribution because the pie isn't growing. The obsession with who should pay more tax distracts from the harder question of why Australia's productivity has weakened so badly. The burden of proof must sit with the government to justify why it needs more, not with taxpayers to explain why they should keep it  The most durable source of revenue isn't a new impost on investment. It's a stronger economy - yet too often short-sighted politicians kill growth accidentally when lurching to tax more of private earnings. A serious tax debate must examine both ends of the ledger. It requires scrutinising the NDIS, soaring aged care costs, Commonwealth-state duplication and the political habit of buying off problems rather than solving them. Wilkinson's revenue comments betray a Treasury that has abandoned fiscal discipline. It is a worldview where government demand is an unstoppable force and private enterprise is merely a taxable resource to be mined. Australia needs bureaucrats and politicians capable of restraining themselves. The question isn't whether revenue must come from somewhere to fund a growing state. It's why the taxpayer-funded political class in Canberra simply assumes that is the only course open to them. No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. 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