It’s a long way from Costello Land to Wayne’s World of Shopping where a “timely, targeted and temporary” December fiscal stimulus package produced a supposed “socks and jocks” spending spree. Woolworths and Wayne assured us that this was the case. But most of that stimulus was saved.

Now the cheques are in the mail for Fiscal Stimulus Two, the Tax Office tells us they’ll be despatched by this weekend. The Permanent Income Hypothesis (one-off windfalls are saved not spent) will now be tested again. Recipients of this week’s cheques will confirm or deny the hypothesis. Wayne has punted billions so far. It’s an expensive gamble in deficit spending.

Now the post-budget battle begins. The resources boom and John Howard are long gone. “It’s not our fault” will no longer cut it coming from Government ranks.

Wayne’s second Budget spruiked Treasury modelling telling us how it will all pan out. Oh Please! The maths elites of Wall Street produced models that gave us “collateralised debt obligations”. And our own Treasury boffins produced models for Treasurer Costello that showed the “China resources boom” would power ahead well into the second decade of the 21st century.

Economic models are as vacuous as fashion models: they look good but that can’t tell you anything that matters. Wayne has two model-based mantras. “It would have been worse if we hadn’t spent mega billions”. And, “the day after the day after tomorrow happy days are here again”.

Early reactions: “Never Never Land” (O’Brien), “Not credible” (Kohler), “Fiscal Fairytale” (Akerman).

But is that a Cheshire cat we see off stage purring, “Where you better off when I was Treasurer?” Peter “Budget Surplus” Costello can afford to be patient before rolling Turnbull and confronting Kevin, “Are you feeling lucky punk?” St. Kevin the Kind would flay around looking for his hair dryer. It would be a non- contest.

Chatterers are anti-Costello at the moment. Nota Bene: 75% or more of the people you chatter with vote like you. But 50% of the Australian electorate don’t vote like you.

In twelve months time Costello Land will look mighty fine.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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