Every time a politician does something stupid I’m reminded of the Yes Minister episode in which Sir Humphrey advises Jim Hacker the proposed course of action would be courageous.
Translated from bureaucratic language that means political death.
It’s very hard to fathom why Malcolm Turnbull wants to delay millions of Australians receiving a timely handout from the government through its economic stimulus package.
I concede a personal interest in this; my family stands to receive about $5000.
Putting that interest aside, I actually think the package has some merit. I was less convinced about the December handout, because of the timing and the lack of an overall strategy.
This time there are more beneficiaries and a greater emphasis on infrastructure.
The GST is a consumption tax, which means the Federal and State Governments rely on people spending money to rake in tax revenue.
To put it bluntly, the states are stuffed if people aren’t spending. That has implications for schools, hospitals, police and other services.
Even if only two thirds of the $42 billion package gets spent, that promises to return $2.8 billion to governments in the form of tax.
Company tax revenue should also climb if the spending helps to maintain profit levels.
The Opposition has a legitimate role to scrutinise and criticise the package. I don’t think there’s enough emphasis on health, for example.
However, Turnbull’s ploy to block legislation in the Senate appears to be reckless and politically dumb.
The cartoon by Peter Broelman says it all.
×0
I think we are stuffed anyway.
Mr Turnbull is talking like he has experience living an uncomfortable life.
He is stuck so high up his backside he only smells the roses, when everyone else can smell crap.
It’s not only the GST payments back to government it’s the flow of cash through the whole economy. If we all slash our spending then we will hurt our neighbours and ultimately ourselves as it will hurt small businesses who are the largest employer in Australia. Of course we need to step away from the days of debt-driven excess but sensible spending must be maintained.
This is the famous paradox of thrift. If everybody clams up, demand for goods and services falls and businesses begin layoffs and unemployment rises. If the government still owned government business enterprises on the scale of the 1970′s it could expand employment through its own agencies and give people productive work. It also wouldn’t be so reliant on the GST for its revenues.
It’s now left with employment-stimulation by proxy through employer-subsidies and local government works projects. That will no doubt produce plenty of scams and many fine pine-log fences around parks, white-painted rocks and so forth…until the money runs out.