Stimulus, Labor and the GFC:
Gavin R. Putland writes: Re. Yesterday’s Editorial. Did the Rudd government’s stimulus package keep Australia out of a major recession? Yes, but only temporarily, because the stimulus itself was temporary, because it had to be, because it was a drain on the budget, because it was all carrot and no stick.
For example, the government spent money to get homes insulated, when it could have given landlords a year to install insulation on pain of losing negative-gearing rights.
And the government increased the First Home Owners’ Grant by $14,000 for new homes and by $7000 for established homes, when it could have given the same preference to new construction by making the base grant available only for new homes, and could have strengthened that preference by disallowing the capital-gains discount for future investments in established homes.
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Had the government implemented part of its stimulus by restricting grants and tax expenditures, it could have spent the savings on other stimulus measures, making the whole package budget-neutral.
But of course that would have been out of the question. While political leaders can openly advocate cutting off the dole to a jobseeker who fails to jump through one procedural hoop, or who fails to move to a location where jobs are more plentiful (and rents consequently higher), applying similar conditions to middle-class and upper-class welfare cannot even be talked about.
Les Heimann writes: It’s totally beyond question that the Labor government’s actions saved Australia’s economy during the global financial meltdown. For those who disagree, whoever they are, the Australian government acted and the country reacted positively, and we didn’t melt down.
The point made by Crikey about “confidence” is in fact the most important point.
Had we allowed market forces to rule, our stockmarket would have plunged to near zero, no houses would have been bought or sold (or built) and there would have been employee layoffs by the truckloads. That’s what happens in a crisis when “market forces” prevail.
Those who remember the 1961 debacle have a perfect example. The so called “crisis” really wasn’t and only lasted less than six months but during that time the Menzies government allowed “market corrections” to fall as they wished and Australia had a massive crisis of confidence with all the attendant tragedies.
This Labor government for all its faults saved your house, your car, your plasma TV, your job and your business.
Joe Boswell writes: Crikey wrote:
“… also in today’s Australian, is Reserve Bank director and ANU economist Professor Warwick McKibbin, who rejects Labor’s claim that its stimulus spending saved 200,000 jobs from being lost. ‘The role of fiscal policy was relatively small; that doesn’t mean it wasn’t important, but it could not have been responsible for creating 200,000 jobs… ‘”
So the professor has noted the stimulus did not do and could not do what it was not intended to do. What a clever chap. Why would The Australian print such garbage?
Gary Jenkin writes: Re. “Diary of a Surgeon: what you need to know about the election and health” (yesterday, item 12). It seems that nothing changes. Set out below is a copy of a letter to the editor of the Melbourne Argus newspaper dated 30 December 1940.
Tony Abbott and the Coalition would be proud of the writer as even then there was too much Government spending and waste it just has to stop!:
In the new Royal Melbourne Hospital there will be accommodation for 506 beds, and, of course, quarters for the nurses and kitchen facilities, also operating room, etc. The cost will be about £823,969.
A portion of this money has been subscribed by the charitable public, but a large sum was “given” by the Government; this, of course, the public will have to pay interest on.
The interest on the above sum, at 3 per cent., is £24,717 per annum. If the 506 beds are all fully occupied during the whole year, each bed would cost £1,628, which, at 3 per cent, interest, would be £48per annum; but as it is safe to say that the beds will not be fully occupied, the interest alone on the cost of each bed would be £1 per week.
Surely there must be something wrong in their ideas of hospital building and accommodation. It is no wonder that the hospitals are always in financial difficulties if they are carried on at the same scale, and in the case of many hospitals — pay interest on extravagantly built buildings.
G. E. ROBERTS
Peter Wotton writes: Re. “The broadband battle: what will they really deliver?” (Wednesday, item 4). Let me get this right! The Liberals want to give away tons of money to a wide range of internet service providers in the hope that the market will cobble together some sort of high speed web access.
The Labor Party wants to invest a lot more money in a system which will provide state of the art access speed. Additionally at some stage this investment is to be recovered.
We appear to have a choice between Father Christmas or a sound investment in upgradable infra-structure.
Andrew Elder writes: Re. “Separated at birth” “Crikey Campaign Leftovers: Abbott’s lunch no-show … NBN speed update … Crikey on the punt …” (yesterday, item 13). Never mind fictional characters, what about the fact that every pronouncement by Tony Smith is an eerie imitation of Peter Costello? I know Smith used to work for Costello, but Smith’s verbal tics and physical mannerisms are uncanny.
All those sons who followed their fathers into politics (e.g. Simon Crean and his father Frank) had more significant differences than Smith does to his old boss.
Some may say the policy laziness is another point of comparison, but I couldn’t possibly comment.
Charles Richardson writes: In answer to John Taylor’s question (yesterday, comments), there is a limit to how far out of alignment the elections for the two houses can get, because a half-Senate election can only be held within the year before the new terms begin.
So the usual practice is for an election to be held somewhere between September and December — this one is a bit early, but the next one will most probably be in October 2013.
After the 1987 double dissolution, three successive elections were held in autumn (1990-93-96), but that’s historically unusual (the previous instance was in 1917) and John Howard put an end to it by having an early election in October 1998.
Denise Marcos writes: Forget “stop the boats!” it’s time to stop the polls. I am suffering a sociological malaise called Poll Overload — incessant surveys are having an increasingly toxic effect on my quality of life. But there’s a solution.
If a small percentage of Australian voters take the vow to mislead pollsters the results will be inaccurate thereby affecting their credibility and rendering them worthless. I have already sworn the vow; it will be a surreal thrill telling a stranger on the telephone my intention to vote for Family First.
Get on board Australia, we can stop the polls.
Wendy Cousins writes: John Penny’s excellent analysis (yesterday, comments) of the News Limited campaign contains one insidious omission. He suggests rightly that “ordinary Australians can counter in only one way” by stopping buying their papers. But what about the free MX weekday newspapers which become the blight of public transport (at least in Sydney and Melbourne).
Each day as I enter the station, I am bombarded with offers of these — I decline them every time and despair at the number of commuters who accept them and then read the papers avidly on the train. Presumably they are lapping up the Murdoch world view.
To add insult to injury the commuters then discard the papers on the train. Not only is Murdoch polluting the minds of these people, he is adding to the vast mess that Cityrail has to clean up every day.
Increasingly in our society, the average reader/viewer is unable to discern what is a good news source that can provide an objective and balanced reporting. I reckon you can’t go past the ABC, BBC, The Guardian, the Sydney Morning Herald and of course the fabulous Crikey.
John Highfield writes: Not one of the senior hacks at the National Press Club debate on Foreign Affairs stood up for the principles of journalism and what the craft is about.
Instead, the media mob sat in mute accord when one of their number opened the questions by asking if an incoming Government would help the United States investigate Wikileaks sources and consider withdrawing Julian Assange’s Australian passport to prevent him doing what journalists should be doing .
Oh dear, the ghost of Wilfred Burchett will be agitated to hear that nothing has progressed for the Australian Fourth Estate in these past 50 years!
Caroline Storm writes: Re. “Last word: the ABC Interpretive Dance Bandicoot” (Campaign Crikey morning edition: Day 27, item 7). Thanks for the first good laugh of the day (and maybe the week). I adore the SBS Trilobite! More, more, more.