A big issue in politics is the role of government - should the government have a lot to do with our lives, or should people be more free to do what they like?

People who favour the hands-off approach want more freedom to make their own choices. They prefer to pay their own way. They don't want the government to play too much of a role in people's lives and they want to pay less tax.

Other people want the government to make decisions which will help society overall. They are likely to support policies, which provide free education and health care even if it means paying more tax.

A lot of what the government does involves spending taxpayers' money. Our money. Everyone who earns money has to pay tax - business owners, people on benefits, workers, and even children and students with money in savings accounts. As well as income tax, we have taxes on lots of goods and services.

Where the money goes

Government spending in the 2005-2006 financial year will be $48.4 billion. The biggest spend is on Social Welfare.
Work and Income NZ (WINZ) will pay out $14.3 billion in benefits. It goes on:

• the community wage to people who are unemployed
• invalid, sickness and domestic purposes benefits

The other big items for the government are:

• Health $9.7 billion
• Education $8.7 billion
• Law and Order $2.2 billion
• Defence $1.4 billion

The Budget

Every year, the government writes the Budget which Parliament has to OK. This shows us how much money the government has and what it is going to spend our taxes on. For more information on government finances and economic policy, go to
www.treasury.govt.nz or www.rbnz.govt.nz
For tax information go to www.ird.govt.nz

Activity

What do you think? Clip all the news stories which are about taxation and what all the different political parties are saying about taxes. What do you think the government should be spending public money on?