So giving 8.1 million Australians who earn under $100k a year cash handouts totalling $12.4 billion dollars is going to keep us out of recession? We've since found out that the $10.2 billion K.Rudd gave out in December in cash bonuses to families and pensioners went straight onto credit cards or down poker machines and did nothing to stimulate the economy.Why is this going to be any different? Plasma screens for all? I totally support government funds stored and borrowed being poured into infrastructure and education. This creates jobs and provides for the future but to throw $12.4 billion out the window and say "go treat yaselves kids" when the severe consequences of this huge global financial crisis haven't even hit our shores (our unemployment is still low at 4.4%) is extremely careless. We are going into a recession. No amount of cash bonuses is going to stop it. We rely on China, Japan and Korea who in turn rely on America.....they are all in recession....we're headed their way. The thing that has put this country in good stead in front of countries such as the United Kingdom is that we had savings. We had nearly ten years of budget surpluses ....our last being $21 billion. Ten of that has already been spent; K.Rudd is about to spend the rest and another 35 billion on top of that. Analysts predict that Australia will have a budget deficit of $100 billion by 2010 all in time for the next federal election....not bad going for a first term government.
The Government is wanting to push this current $45 Billion stimulus package through both the houses of parliament by the end of the week without the usual Senate Estimates Hearings that are involved in such a piece of legislation. The Opposition rightly so is opposing the move. This legislation requires far more analysis than just two days. The Government will have to rely on the support of the Greens and the Independent to get the legislation through the Senate.
It's funny how history repeats itself. This scenario is reminding me of another "Great" Labor Prime Minister who entered power at a time of great financial turmoil following 25 years of conservative rule in Australia. He championed human rights particularly those of the Aboriginal people introducing the Racial Discrimination Act and the first land rights legislation in Australia. He also abolished the White Australia Policy and withdrew Australian troops from Vietnam. He also used the nation's credit card like an elastic band plunging the nation into massive debt; a debt that was a fiscal noose around the Australia economy until the commodoties boom of the Howard years thanks mainly to China. K. Rudd's debt will be five times that of his Labor predecessor. His predecessor was also a bright shiney ray of light when he first became Prime Minister winning the 1972 election on the slogan "It's Time" ending a strangelhold the conservatives had on Federal rule in Australia. But in under three years , Mr Whitlam was sacked by the Governor-General of Australia along with the Labor Government in the constitutional controversory which was the Dismissal. I'm not saying that K. Rudd is going to run off to the middle east and get shoddy loans like his predecessor in "the loans affair", but he should take note from the pages of history and not rush huge fiscal committments through parliament without proper analysis. This recession is happening whether we like it or not, our government should consider every serious fiscal decision it makes with the due care and consideration it deserves.....not because it will look good on the 6 o'clock news.
C
4 comments:
Well said.
Sounds almost as bad as the UK Government wasting an estimated 12 billion GBP on reducing VAT (value added tax) from 17.5% to 15%. This is the most monumental waste of money in UK history, by far.
The really annoying thing is that the Government would normally haggle for 5 years over an extra 1m funding for a school, or hospital, or something else worthwhile, but they were happy to waste 12000 times as much in the blink of an eye on nothing. And who's going to pay for it? Me. I'm the one who pays the tax that will have to be raised in the future the pay for it eventually. And did it work? No. Was it a good idea? No. Encouraging airheads to go out and spend even more cash they don't have is not the way to avoid or minimise a recession.
What a bunch of useless twats governments are. We (the UK) would be better served if we simply let the French or Germans run the country for us (like they dearly wanted to in times past). Or, if all the dinnerladies got together once a month to decide how to spend the governments money.
If Mr Rudd is anything like Mr Brown then you are as stuffed as we are.
For "almost as bad" read "as bad"
Whilst I agree with your comment relating to the appalling use of Howard-esque tactics in parliament (stifling the debate to non-existent), you quite rightly point out the inevitability of a recession but seem to resent the fact that a budget may be brought into deficit as a result. This should be considered as part of a normal economic cycle - it's easy to maintain surpluses in good times but if you are foolish enough to attempt to stick to this ideology during recession you'll very quickly end up bankrupt as monetary policy cannot create stimulus on it's own.
The irony that we should be thankful for the previous government NOT investing any of our surplus into infrastructural is noted as the opportunity presents itself now.
As I stated in my post, I don't have an issue with pouring surplasses and deficits into infrastructure in times of recession, I do have an issue with 12 and a half billion dollars been given to us (well not all of us) to essentially go shopping. It didn't work in December. It's not going to work now. That 12 and a half billion could build a metro in Sydney.
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