Second stimulus package discussion

[Nyden]

Schools need money, yes.
But the question is whether expenditure on new assembly halls, libraries, roofing insulation etc, is the best use of the money Rudd is splashing around?
Or could there be better ways to spend it....ways that would generate on-going revenue and jobs for many decades to come, while at the same time providing significant economic boost short term? Kill two birds with the one stone, so to speak.

The Rudd package has a short term ring to it, but seems to be lacking in longer term vision.

Well, to be perfectly honest ... despite possibly delaying my payment p, I would like to see some water infrastructure in the works. Water supply is possibly going to be one of the most pressing issues in the future of Australia; and I would love to see it resolved. Power supply infrastructure as well would be fantastic. Imagine the revenue brought in with a government owned Geothermal, or solar plant in the outback - these could be assets that could even be sold off in the future. These projects would not only create many construction jobs, but would also provide long term ongoing jobs at the actual facilities.

 

[Prospector]

Are you guys/girls serious. It is like watching today tonight. Take a particular case and then generalize it on the whole population. That is just ridiculous. Have you ever heard of the terms "Average" or "Mean", "Variance" and "Standard deviation"? Have you ever heard of statistical analysis?

I just hate when one particular extreme example is generalized to support a point.

Of course it is an extreme example, but it highlights one thing - do these payments go to people and places who/that will positively impact on the economy.

There is controversy as to whether this stimulus package will actually do what it needs to. Small business employs most people, yet other than a backhoe, there are no benefits, no tax relief, nada! So if a large proportion of handouts goes to people who are not likely to stimulate the economy, other than social workers and garbage collectors, how can you say it will achieve its purpose!

 

[bunyip]

Sorry for getting off topic, please continue on with KRudd bashing.

Well, you've gotta admit it's great fun bashing these politicians....particularly the ALP variety!!

Seriously though, I wouldn't want the responsibility of having to come up with policies to sort out all this mess....not even if they offered me the PM's job and quadrupled the salary.
I'm just eternally grateful to be in a recession-proof, redundancy-proof business.

 

[Prospector]

A cap on the claim for number of children is inherently discriminatory, it is for children welfare not their parents, contrary to popular belief.

Putting a cap on the number of children is also not humane. You want your government to control the number of kids you can have?

But you can cap the amount that goes to a family. Why not just give each family a payment of $5000? No mention of kids at all.

Actually, Rudd would probably be voted in forever in SA and Victoria if he would simply spend $1billion and get us some water. Everything else is luxury for us at the moment.

At this stage, each member of our household will receive $950 - that is almost $4000. We would like it, but really, we dont need it. But I would love $4000 worth of water right now.

 

[mayk]

There is controversy as to whether this stimulus package will actually do what it needs to. Small business employs most people, yet other than a backhoe, there are no benefits, no tax relief, nada! So if a large proportion of handouts goes to people who are not likely to stimulate the economy, other than social workers and garbage collectors, how can you say it will achieve its purpose!

Don't worry tax breaks will be in the third stimulus. You are not naive enough to believe that this is it!

Where is the evidence that tax breaks are going to stimulate the economy? They are all theories, which business will survive without a consumer base, even with a tax free reign?

A balanced commentary :
http://www.canberratimes.com.au/new.../clash-of-the-titans/1427385.aspx?storypage=0
Clash of the titans

In the Government's corner is the British economist John Maynard Keynes. Keynes was the first real proponent of the idea that governments should smooth the business cycle by boosting their spending when private sector spending drops off. The $42 billion spending package is a classic Keynesian stimulus.

In the Opposition corner, Turnbull and the shadow treasurer, Julie Bishop, have assembled three American economists to justify their decision to oppose the package: Milton Friedman, John B. Taylor and Arthur Laffer.

Friedman rivals Keynes as perhaps the most influential economist of the 20th century and was, until his death three years ago, the foremost advocate of "laissez faire" economics, which says governments should stand aside as much as possible to let market forces flourish.

But it was Bishop's advocacy of the ideas of Arthur Laffer that drew scorn from mainstream economists this week, not to mention the Government and some of her colleagues. An adviser to Ronald Reagan, Laffer is best known for his "Laffer curve", or the idea that cutting taxes can result in higher tax revenues - particularly if targeted at high income earners, who, its proponents argue, are most productive.

George Bush snr labelled the idea "voodoo economics" and it has since been blamed for spiralling US budget deficits.

 

[Prospector]

Don't worry tax breaks will be in the third stimulus. You are not naive enough to believe that this is it!

Where is the evidence that tax breaks are going to stimulate the economy? They are all theories, which business will survive without a consumer base, even with a tax free reign?

There isnt any evidence for most things this Government is trying to do. I dont need a tax break personally either because of investment deductions, but small business certainly does! Instead of throwing money to the masses we need to invest in infrastructure; for SA and Vic that means water supply. Unless you have seen Victoria and SA recently you cannot imagine how bad it is.

 

[Calliope]

I understand that in Nambour they are using their grant to commence a "shovel ready" project of erecting a Giant Stimulator in the main street. It is hoped to employ anyone with a backhoe. This amazing structure will not only overshadow the Giant Pineapple down the road but will put the Giant Banana to shame.

 

[bunyip]

it would be good if we just apointed the nations top economists to political roles...

its gonna be a big night at the pokies the week this thing gets paid out...

Indeed it will - the pubs and clubs will be loving these handouts.
My wife and I have lunch at the golf club about once a month. We always walk through the gaming room on the way out to see who's poking the pokies. Invariably there's numerous elderly people in there...rough old sheilas with a durry hung off their bottom lip and a glass of booze beside them, ancient men of similar description, all shovelling their pension money into the bandits.

After that last handout we noticed a significant increase in the already high number of elderly people in the gaming room...the club even had a young female employed full time in bringing free coffee to the gaming patrons so they'd spend more time at the pokies.

This time around it'll be no different....the club and pub owners will be grinning all over their faces when Rudd's latest gift starts filtering into the system.

 

[Julia]

Are you guys/girls serious. It is like watching today tonight. Take a particular case and then generalize it on the whole population. That is just ridiculous. Have you ever heard of the terms "Average" or "Mean", "Variance" and "Standard deviation"? Have you ever heard of statistical analysis?

I just hate when one particular extreme example is generalized to support a point.

No one was generalizing across the whole population inclusively.

Let's look at Prospector's example: do you think that is a reasonable use of the taxpayers' money, Mayk? What do you think that abusive mother will do with it? Seriously?

I've worked in the welfare sector for more than twelve years and seen family after family where a less dramatic scenario than Prospector describes plays out. Parents who spend their benefits on gambling/alcohol etc and then want the taxpayer to pick up the electricity bill or pay the rent.

Who do you think benefits when unfit parents continue to produce children?
Certainly not the children, I promise you.

You think it's discriminatory to have any interference in any woman's capacity to continue having children, even when she has demonstrated over and over that she has no understanding of parenting in any constructive sense, and when she has failed to respond to repeated assistance, education/intervention.

How is it appropriate or useful for such people to continue producing children who will need foster care, especially when there is such a shortage of foster carers?

A cap on the claim for number of children is inherently discriminatory, it is for children welfare not their parents, contrary to popular belief.

Good Lord, let's have a reality check here! This is exactly what we're talking about, i.e. of course the money is supposed to be for the kids, but it doesn't always get spent on the kids, believe it or not! If you think that abusive and neglectful parents reliably and responsibly put this money into items that will benefit their children, you are naive in the extreme.

Putting a cap on the number of children is also not humane. You want your government to control the number of kids you can have?

When it is beyond your own means as to support all these children, damn right I do (want them to control how many we can have). When the quality of life of these children is reduced, simply because the parents don't have the time, nor the money as to properly nurture, and support them all - it's just wrong. Especially when the taxpayer has to pay the difference.

There are too many parental rights in our society, and not enough child rights. The young girl being thrown off of the bridge is a prime example of this. Apparently there was already some concerns about the father, but nothing was done.

Well said, Nyden.

I would like to see some water infrastructure in the works. Water supply is possibly going to be one of the most pressing issues in the future of Australia; and I would love to see it resolved. Power supply infrastructure as well would be fantastic. Imagine the revenue brought in with a government owned Geothermal, or solar plant in the outback - these could be assets that could even be sold off in the future. These projects would not only create many construction jobs, but would also provide long term ongoing jobs at the actual facilities.

I agree. There is so much of lasting benefit that this borrowed money could be used for.

 

[shaunQ]

Not sure if its been mentioned, but since your all concerned about the $42B, Just thought I'd mention the actual proposal includes a total provision of $200B.

why blame Howard when it was happening all over the world?

Not blaming him at all, just defending the Costello brainwashed attacks against Labor. The graph I was highlighting was the Net Foreign Debt under Hawke/Keating was $33B and under Howard it was $45B. When Howard won the election in 1996, he doubled Labors national debt from $197B to $363B. In real-terms we became more indebted under Liberal, during a boom.

Schools need money, yes.
But the question is whether expenditure on new assembly halls, libraries, roofing insulation etc, is the best use of the money Rudd is splashing around?
Or could there be better ways to spend it....

Part of the requirements are that they be "shovel ready", not necessarily specific infrastructure. Most schools would have been planning this sort of expenditure in the near term anyway.

... it will provide another quick spike in the quarterly figures so our esteemed leaders may say : "OK, folks, there we are now - see what a great job we're doing - Australia is still not in recession, just look at those retail figures."

If a reasonable amount of money could be spent to enable that statement. (The debate being what is reasonable), surely being able to say that would be a great confidence boost to the Australian economy. The general public would be quite relieved not to go into Recession.

 

[knocker]

There isnt any evidence for most things this Government is trying to do. I dont need a tax break personally either because of investment deductions, but small business certainly does! Instead of throwing money to the masses we need to invest in infrastructure; for SA and Vic that means water supply. Unless you have seen Victoria and SA recently you cannot imagine how bad it is.

I absolutely agree there. head to central Victoria and try to find green..

 

[Judd]

By that logic, how does having enough hospital beds, and air conditioning in the buildings allow people to recover faster?

Just to clarify one small point on this aspect - and totally off the point you are making. You can have have as many hospital beds as you want and even construct new hospitals (last time I researched it about 12 years ago it was $600,000 per acute care bed in construction costs which does not include equipment, land costs, roads, etc, etc) but if you don't have the necessary staff don't bother. And staffing costs are around 70% of a hospital's budget, 15% on consumables (medicines, bandages, etc), 5% fuel, light power, and the remainder on repairs, maintenance and small capital works.

 

[Luthien]

First post - long time lurker.

I hoped the govt would provide greater incentives to install rain water tanks. The water situation is dire in Vic.

 

[Garpal Gumnut]

The package seems to have been invented to get the government out of trouble rather than the economy.

What a waste of money and future generations will have to pay it all back.

gg

 

[justjohn]

But you can cap the amount that goes to a family. Why not just give each family a payment of $5000? No mention of kids at all.

Actually, Rudd would probably be voted in forever in SA and Victoria if he would simply spend $1billion and get us some water. Everything else is luxury for us at the moment.

At this stage, each member of our household will receive $950 - that is almost $4000. We would like it, but really, we dont need it. But I would love $4000 worth of water right now.

how about drinkable water ,i haven't been to Adelaide for 30 years and still have nightmares about there tap water

 

[cashcow]

There isnt any evidence for most things this Government is trying to do. I dont need a tax break personally either because of investment deductions, but small business certainly does! Instead of throwing money to the masses we need to invest in infrastructure; for SA and Vic that means water supply. Unless you have seen Victoria and SA recently you cannot imagine how bad it is.

Here, here.

 

[Julia]

Not sure if its been mentioned, but since your all concerned about the $42B, Just thought I'd mention the actual proposal includes a total provision of $200B.

That's quite correct, essentially a line of credit. But to be fair, about $130B of this is potential deficit induced by diminished tax take as a result of mining slow down and general business lower profits.

 

[cashcow]

That's quite correct, essentially a line of credit. But to be fair, about $130B of this is potential deficit induced by diminished tax take as a result of mining slow down and general business lower profits.

Whoa, I didn't realise the extent of the latter; just inwardly wondered if personal income tax cuts were really a prudent policy in this scenario (rhetorical question, I think).

May I inquire after the source of that figure? Surely it's not a mainstream media outlet?

 

[shaunQ]

May I inquire after the source of that figure? Surely it's not a mainstream media outlet?

Some may expect the government to reduce expenditure by over $100B in order to maintain a surplus. But thats a lot of services cut, or a lot of tax increases. $42B is just a spit in the ocean of what can be lost.

A source below...

THE economic nose dive will rip $115 billion from government revenue as its tax take shrinks by roughly 10 per cent over four years.

And it guarantees the Budget will go into deficit because the shortfall will be too big to be covered by cost-cutting alone... "There's no way a razor gang is going to find $100 billion without wrecking entire programs," said a Government source.

http://www.news.com.au/dailytelegraph/story/0,22049,24999947-5001021,00.html

But actually considering the revenue lost. It makes you wonder what services will need to be cut in the long term

 

[Julia]

Whoa, I didn't realise the extent of the latter; just inwardly wondered if personal income tax cuts were really a prudent policy in this scenario (rhetorical question, I think).

May I inquire after the source of that figure? Surely it's not a mainstream media outlet?

ABC Radio National: one of their current affairs programmes a few days ago.