Joe Hockey has been talking non-stop about how the country is running out of money for Medicare, for the ABC, for welfare and for education. He's said that ''we will either have to have a massive increase in taxes - and that means fewer jobs at the end of the day - or we are going to have to look at ways that we can restructure the system to make it sustainable'' (''Hockey waves big stick, points to shortage of cash'', The Saturday Age, February 22).

Tony Abbott has said similar things, including repeating lines such as ''no country has ever taxed or subsidised its way to prosperity''. Those of us who know anything about tax economics know Hockey and Abbott are talking rubbish. Fortunately for them, most people don't know much about tax economics and don't want to know.

Have countries subsidised their way to prosperity? Do higher taxes mean fewer jobs? If we look at the 20 countries with the highest GDP per capita we find quite a few have much higher rates of tax as a proportion of GDP. Sweden, for example, has similar GDP per capita to Australia and takes 54 per cent of GDP in tax (compared with 31 per cent in Australia).

Most of these high taxing, high GDP per capita countries have low unemployment, low inflation and score very well on various measures of life satisfaction and wellbeing. Their existence and their success prove Abbott and Hockey wrong and demonstrate that there is another path to prosperity, one that also leads to less inequality while maintaining very high living standards for the overwhelming majority.

The reality is that Hockey and Abbott are ideologically conditioned to believe in small government and that government is incapable of doing things as well as private enterprise. This is precisely why Medicare and the ABC are at the top of their hit list. These two government-funded organisations are very efficient and very popular. They therefore must be destroyed because they prove wrong one of the central tenets of small government ideology.