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Second stimulus package discussion

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Interesting interview on ABC Radio Evenings last night with Professor Sinclair Davidson, economist, who disagreed that the Mark II package will be effective. He also disagreed with Mark I.
 
Julia said:
Interesting interview on ABC Radio Evenings last night with Professor Sinclair Davidson, economist, who disagreed that the Mark II package will be effective. He also disagreed with Mark I.
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Package 1 was definitely a waste of money, the hand out component of Package 2 will also fail. The infrastructure spending could produce some benefit but we will have to wait and see.

The problem is however, if both packages are proven to fail that will mean that approx $60bn has been thrown out the window and the government will have no money left to implement further changes and stimulus. The only option would be a larger deficit but given how the public view deficits it could be politic suicide.
 
investorpaul said:
Package 1 was definitely a waste of money, the hand out component of Package 2 will also fail. The infrastructure spending could produce some benefit but we will have to wait and see.

The problem is however, if both packages are proven to fail that will mean that approx $60bn has been thrown out the window and the government will have no money left to implement further changes and stimulus. The only option would be a larger deficit but given how the public view deficits it could be politic suicide.
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Still, the prospect of "political suicide" hasn't prevented some past gummints from doing just that! ;)
 
The other option that got a brief mention by the media would be for Rudd to call an early election, before the full impact of the crisis hits and before his package is proven a waste of money. Although it would be a pretty risky exercise IMO
 
Unfortunately the succession of Hockey to the shadow treasurer's job won't even make a blip on the progress of Rudd and co. in the destruction of our economy. Rudd has the opposition tightly wedged over a barrel. His handout policy is doing a great job in raising his popularity to record levels.

And Turnbull and Co. cannot do a thing about it without appearing to be the villains. You don't get between a dog and it's bone So they have reached the situation where they are afraid to reassert themselves as true conservatives, and they are now muddling along as half-baked socialists.

It is unfortunate that any hope is dependant on the hole in the bucket becoming so big that the bucket will run dry. Costello will then step up to the plate, but I have serious doubts about whether he has the ticker.
 
Wasn't it the same Reserve Bank who just 12 months ago told us we had to save save save so they kept raising interest rates to force us into saving?

We seem to be following each other at the moment C, and Mr B!:cool:
 
Calliope said:
Especially the politicians. And I think their suppers should be reduced considerably, considering it is sedentary work.
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And maybe their beef stroganoff? :)


Pensioners go hungry as MPs squabble over their food
Peter Jean
September 18, 2008 12:00am

PENSIONERS have slammed federal MPs for being out of touch after a complaint about a small serve of beef stroganoff triggered two inquiries into the quality of meals at Parliament House.

The Stroganoff Crisis began to stew when the wife of parliamentary secretary for trade John Murphy complained about the size of her $7.90 beef casserole from the staff dining room.

Speaker Harry Jenkins promised to treat the complaints seriously, ordering the House Committee and the Department of Parliamentary Services to investigate.

"They will be dealt with in a way that ensures there is appropriate and vast consultation," he said.

Nationals chief Whip Kay Hull called for a survey of MPs, senators and staff on the quality, presentation and availability of food.
http://www.news.com.au/heraldsun/story/0,,24362964-661,00.html
 
I reckon this 2nd handout package is a complete waste of money. It's hard to believe that it only takes this Labor government just over a year to throw away all the surplus that took years to build up. Seriously, why does Australia have to live in denial that we're not in a recession by throwing all this money away? Will we win a medal on the world's stage that were better than all the other western countries? Rudd is so immersed in his own popularity right now and the power has well and truly gone to his head.
 
[size=+1]$15bn For Three Funds Wiped Out[/size]

February 18, 2009

ALMOST $15 billion earmarked for funds dedicated to education, health and other projects has been wiped out by the Federal Government's stimulus package.

The three funds ”” which were expected to receive more than $40 billion over two years ”” will miss out on $14.9 billion, which was to be drawn from a forecast 2008-09 budget surplus.

With the Government now projecting a $22.5 billion deficit as a result of the economic slowdown, the funds will not receive any further allocation from the 2008-09 budget.
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http://www.theage.com.au/national/15bn-for-three-funds-wiped-out-20090217-8aah.html

Oops....
 
Aussiejeff,

Oops indeed. Their stimulus packages are just sleight of hand with sweeteners. They are money jugglers. But how many packages can they keep in the air at the same time, before they fall in a heap?

When are they going to tell us what jobs they have created/saved?:rolleyes:
 
Julia said:
Beej? Hello?? Would really like to know about this $100B?
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Beej said:
You know - the Future Fund etc? What do you think they did with all the extra cash once all the Commonwealth debt was paid off a few years ago?

Cheers,

Beej
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A little bit of an exaggeration there Beej. The Future Fund's assets as at 31 December 2008 stood at $59.62 billion (including $7.65 billion in Telstra shares) not $100 billion.

And its legislated purpose is "to assist future Australian governments meet the cost of public sector superannuation liabilities by delivering investment returns on contributions to the Fund."
 
Something I found floating around on the internet, sums it up nicely:

Sometime this year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers..

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. No, they are borrowing it from China. Your children are expected to repay the Chinese.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn’t that stimulating the economy of China?
A. Shut up.
 
juw177 said:
I thought future fund was only for public sector.
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Judd said:
A little bit of an exaggeration there Beej. The Future Fund's assets as at 31 December 2008 stood at $59.62 billion (including $7.65 billion in Telstra shares) not $100 billion.

And its legislated purpose is "to assist future Australian governments meet the cost of public sector superannuation liabilities by delivering investment returns on contributions to the Fund."
Click to expand...

There are other funds that money has been put into announced in previous budgets as well - just can't remember their names. Anyway you can quibble over amounts if you like (even $60B is a lot!) - but I'm pretty sure there is another $20B-$40B floating around in other funds as well. Maybe some of that was forecast surpluses that now won't eventuate? Regardless, the facts are that since the elimination of federal debt a SIGNIFICANT amount of money has been saved in sovereign funds. At least $60B. Probably more.

As for the purpose of the Future Fund, well that's arbitrary - it's for whatever the government of the day decides to use the money for. Currently it is earmarked to cover public service superannuation liabilities yes - but if the fund was not there to cover that then those liabilities as they arise would just be paid out of general tax revenue anyway, including using borrowed money if we were in deficit. So the fact it is there means LESS money has to be spent from general revenue than would be the case if it was not there, so same difference - ie this money represents the "savings" of the commonwealth - capisce?

Cheers,

Beej
 

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