The Australian Prime Minister Kevin Rudd announced a very broad and very expensive economic stimulus package yesterday, one which seems to be hailed as ideal in some quarters and yet in others labeled as economic vandalism. For the ordinary Australian, it is hard to know who is right and who is wrong. It seems though the politicians are playing politics while the economy stinks sinks.
If the truth be told, even the experts don’t know. That is probably the biggest problem with the world’s economic problems at present. No one really has any idea how to get things moving again – of course with that comes the guess work as to how long the world’s economic woes will continue for.
I am no expert and I take a rather simplistic view on the whole situation. It starts from the basic premise that we did elect Kevin Rudd and his Labor colleagues to run this country – part of that job is trying to run the economy. A closer look at the package makes it very attractive.
We are trying to avoid falling into a recession which is defined as being two consecutive quarters of negative growth. The stimulus package is divided into a now and later. The now involves cash hand outs in the hope people will spend. That will prevent these next two quarters from going into the negative.
The second component involves infrastructure spending. This is where it gets interesting because every dollar allocated is going into areas where the funds really are needed.
Our schools have been desperate for this type of funding for a long time. Public housing has needed a boost in funds for about ten years – it has a real boost now. Even the rebate for insulation is welcome addition.
The opposition proposes simply bringing forward tax cuts. For a ‘liberal’ party, they are very conservative. From my perspective, tax cuts mean nothing. Petrol price rises along with the increase in price of basic foods, particularly fresh food and meat, means the tax cuts are already spent.
Malcolm Turnbull, the opposition leader says 72 hours is not longer enough to consider the package – yet 12 hours is long enough to consider it and so no, we will vote against it!
The minor parties of course are looking at how they can capitalize on the package for their special interest groups. The Labor party was elected to run this country. It should be left to do the job. In our current economic environment, we cannot afford political grandstanding. Economic experts have all come out in support of the package. That is good enough for me.
Turnball says the pre Christmas hand out did little for the economy. At the same time statistics reveal that pre Christmas spending had the biggest growth in over 20 years.
My fear is that this country’s economic future will be held to ransom by a politician who was once a banker – and who started this whole mess – bankers!
Are you sure you live in Australia and not the U.S.?
A lot of really bright and otherwise well-informed people enthusiastically believe that Obama is a radical, left-wing progressive. And he didn’t really say or do much to give them that impression during his campaign. Quite the contrary, actually. But after 8 years of Bush, I think the people of the U.S. would have been similarly exuberant if they had managed to elect a mallard duck to the presidency, as long as it wasn’t a nominally Republican mallard duck.
Love your blog! Quite informative. And I enjoy rants, as you will see if you take a moment to peruse my blog.
Peace.
Incidentally, if you enjoy rants, check out http://www.gaysagainstobama.org and watch my video (which was included among a number of other commentaries I’ve made on the air at CNN via iReport): http://www.youtube.com/watch?v=Dz_Eb9SlvgI
I think you hit the nail on the head the problem is that nobody knows how to bring the economy back on track because there are just too many unknown factors involved. The people at the top can only work on a calculated guess that if it works the economy will prosper and if it doest it means more debt for the country. We are already in a recession in the UK and our Government is trying to buy its way out of the recession, which at the moment doesn’t seem to be working. Time will tell though.
At least your government is seeminly doing something. Here in Canada our stimulus consists of giving us extra cash to rebuild and remodel our homes while we lose our jobs. I supported our government up until this last budget. One of the ways that is being suggested to move forward is to let everything go it’s pace and let the recession run dry.
Thanks for your comments.
Elian – Although I am in Australia I sometimes have to wonder if we are not on the verge of becoming the next US State.
Khaled – buying is not the key – the way out of a recession is consumer spending. It just has to be in the right areas.
David – any form of domestic spending is going to help keep an economy out of a recession. We have to spend on local goods and services to keep local businesses and jobs in work. As soon as our own businesses shut their doors – its doom. Jobs are one of the most important recession busters – more jobs=more money=more jobs=more growth
cheers and thanks to you all
les
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It is terrible that Australia is having problems too. The US is in such a mess…I’m not sure that stimulus packages are the answer either. I think you are right that many of us, not even the experts, know really what’s going on and a true solution to the problem.
thank you for the nice psot , its very interesting
Thanks, that must have taken a loads of work to put that together. i don’t like seeing my house value drop though. ha!!
Isn’t it frustrating?
I find it terrible that both Labor and Liberal politicians can sit in Canberra arguing over pointless things while real people are losing their homes, their jobs, their livlihood.
Arrgghhh!!
Get on with it!
Hey so I just found your blog on accident and I must admit that Ive been reading for the last half hour. Great site.