"PM Kevin Rudd goes for broke with $42bn stimulus package"
A clever headline in today's Australian, nicht wahr?
It was nice to wake up and find that Uncle Kev is handing out more cash to us in a few months. We have a nice new fridge from his Christmas present, but another hand out of about twice that much will be very welcome. Even if the Australian budget is going to be in the red for the next four years... or more...
Interesting then to read this article in The Age today:
Good, Bad and the Amoral:I know what Colbatch is getting at - but I wonder if he quite understands what this latest fist-full of dollars is all about. It is about spending on luxury items - like fridges and mortgages - not food and rent. It's supposed to "stimulate the economy". The poor are not going to spend their money in a way that "stimulates the economy".
February 4, 2009
THIS is a mix of the good, the bad and the amoral. Most of it looks the right stuff at the right time. But parts look as if they are designed to fight Malcolm Turnbull rather than a recession.
And the worst is what is not there at all. There is nothing to help the real victims of the recession: the 800,000 Australians whom Treasury expects to be unemployed by June next year.
Prime Minister Kevin Rudd, apostle of economic morality, has overlooked one basic fact — recessions make most people better off. Our mortgage bills plummet, our taxes are cut, and as inflation sinks, our wages rise faster than the prices we pay. Most of the $16.6 billion he shovelled out yesterday in handouts will go to people who will end this recession better off than ever. We might spend it, we might save it, but we don't need it.
Those who need it are the poor people who bear the cost of the recession on behalf of the rest of us: workers who lose their jobs, apprentices laid off, youngsters who can't even get into the labour market, and businesses and self-employed people who go broke. There is nothing in this package for them.
...Perhaps Rudd's next essay for The Monthly could be on the morality of kicking the victims.
Yesterday's package could have been worse. The last time we went into recession, the Hawke government and the Reserve Bank decided to crack hardy and do nothing. They kept interest rates high, accelerated tariff cuts and took two years to frame a stimulus package.
This time you can't fault the response. ...If you restrict yourself to the three Ts advocated by Treasury — new spending should be timely, temporary and targeted — it clears two of the hurdles. It could hardly have come faster, and every new program yesterday would end by 2011.
But is it targeted? Some parts, such as the public housing initiative, tick all the boxes. It goes to an area of real need, provides an immediate impact on output and jobs, and will leave us with a valuable asset. The same is true of the $15 billion investment in schools.
But giving handouts to taxpayers and families regardless of need is electoral politics, not a strategy to fight a recession.
Am I being too cynical? Again?