Comments (2)

By Les Scammell, October 15, 2009 2:19 pm

The world economy is a strange animal sometimes. We have just experienced one of the worst – yet on of the quickest – recessions in many decades. I wonder if former treasurer Paul Keating would label this the recession we had to have. He would probably be right too.

Just over 12 months ago the Aussie dollar was trading in the 75-80 US cents range. Nine months ago it was trading in the 65-70 cents range. In fact, it managed to get down to 63 cents at one stage.

During that period, US$630-US$700 would equate to A$1000. Today the exchange rate is over 90 US cents. This means I now have to earn over US$900 to receive that A$1000. So, to all intents and purposes, I am losing money as the economy recovers.

What makes it a little harder to swallow is that as I work a little harder and increase my earnings, my actual take home in Australian dollars is going down. It is an interesting phenomenon and you have to take the good with the bad – ride the hard times and enjoy the good – and work harder and harder.

Has anyone else found that their income is actually dropping because of the economic recovery – even though they are earning more?

photo credit: Unhindered by Talent

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By Les Scammell, January 30, 2009 2:15 pm

I am having a difficult time understanding some sectors of the Australian community at present, particularly the opposition leader and the Business Council.

They want to bring forward tax cuts to Australian workers – who doesn’t. At he same time they want to increase welfare payment to the elderly by $30 a week, and that sounds reasonable as well – actually the latest call from some sectors is to also increase welfare payments to the unemployed by $30 a week.

It all sounds great. More money for those on welfare – and they do need it. More money for workers and small business – and they need it too. However, there is one little tiny flaw to everyone’s thinking and that is employment. Unemployment is set to rise steeply in 2009.

Can you tell me any budget that can handle a reduced tax on a reduced workforce whilst paying out extra in welfare payments to more individuals receiving those payments.

I’ve heard of a double whammy before – is this an economic quad whammy? Really, can we afford to go down this track or is there an alternative. Employement needs to be the Governments primary concern. Employment reduces two of those four budget drains, fewer on welfare and more paying tax. Perhaps then you can look at tax cuts and welfare increases. They are needed – we just cannot afford them at present.