If you have a memory that is better than the media and Coalition Government hope you do, you would probably remember when the Rudd ALP Government, challenged by what are arguably similar economic conditions to those today, primed the economy with a three-pronged approach. The theory was that there was some immediate stimulus to the economy — effectively giving most Australian families and welfare recipients a $900 cheque, another injection once everyone had spent their ‘windfall’ in the form of subsidies for home energy efficiency measures such as insulation (with an added dividend of reducing the demand for energy into the future) and finally an injection of significant cash into infrastructure, best remembered as the school hall building program.
It is impossible to state with certainty that the Rudd Government stimulus measures were the sole reason Australia apparently did not suffer as greatly as a number of other ‘developed’ economies as a result of the Global Financial Crisis, because we don’t have the alternate lived experience to compare with. However, the UK and USA, both with conservative governments who sailed a different course, were affected to a far greater extent by the economic circumstances of the time. Even if there was absolutely no economic benefit, which is a doubtful premise as people were easily convinced to spend ‘free’ money, those that insulated their houses are generally still enjoying the benefits through reduced energy bills, as are students and staff at the numerous schools across the country that received a school hall, which have a multitude of different uses depending on the creativity of the school community.
Different people spent the cheques in different ways. Some paid it off the mortgage, did some work around the house, fixed the car and so on. Kogan released the ‘Kevin37’ — a $900 37 inch high definition television, and shock horror some chose to spend their money at the pokies. Regardless of how people spent it, it did give a lot of people some money to put back into the economy at the time. The cheque printers and Australia Post delivered additional items, shops had more people buying and even the additional spend at the pokies meant additional shifts were required by the hospitality staff who work in the ‘pokies palaces’.
However, the media were not so friendly. A number of conservative politicians and media commentators including Andrew Bolt (yes, he has been around that long) were critical
The first lot of Rudd’s cheques went out to many people who hadn’t actually earned that cash, or qualified for the handout because they already were too careless with money.
In fact, they were sent to precisely the people the Government guessed were most likely to spend them, not save.
Not surprisingly, millions promptly went on the pokies.
Frydenberg’s first budget also contained some stimulus in the form of cash handouts. Rather than mailing cheques around the country, Morrison’s LNP Government chose to retrospectively introduce some tax cuts that will give those who complete a tax return up to $1,080 per annum (depending on the individual’s tax position and income) once they have lodged their tax return for 2018/9 and the next two years. So far there is no mention of further measures to prime the economy such as Rudd’s environmental measures and infrastructure spending. Probably unsurprisingly, the Tax Office was reporting record early lodgements.
The delivery method is different (cheques are so 2008!) but the concept is similar. Up to 10 million Australians are getting a government handout for the next three years to go out and spend with no strings attached. Clearly, the ‘better economic managers’ are as they claim because they’ve shown capacity to update the value and process behind something done by the other side of politics 10 years ago.
It’s a pretty safe bet that some of the $1,080 ‘rebate’ payments will again end up being swallowed by the machines at the local pokies palace or otherwise spent in ways conservative commentators have considered unwise in the past. How people spend their ‘low- and middle-income rebate’ is really their business and none of us have the right to impose our own beliefs on others. Again, even extra demand at the pokies palaces will require additional hospitality staff to work and who knows Kogan might reinvent the ‘Kevin 37’. However, in 2019, where is the confected moral outrage by the likes of conservative politicians or commentators such as Andrew Bolt and their fellow travellers claiming that the ‘free’ money is horrible policy because some of it will be wasted by people who don’t deserve it?
If you can only hear crickets, it’s probably because the ‘better economic managers’ are handing out the cash this time.
What do you think?
This article was originally published on The Political Sword
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