Stimulating Punts

The architects of the Australian government’s $41 billion economic stimulus package would have raised a celebratory glass at the weekend. Their carefully-drawn plans have been approved by the Senate, substantially unchanged.

For the eight-million-odd people who qualify for cash-distributions as part of this scheme, the anxious wait for the postman has begun, and their political masters are expecting most of them to dutifully spend the takings.

In the $10.4 billion pre-Christmas package, for example, Treasury predicted that 30% of the cash would be saved, and the rest would be spent over the ensuing half-year or so. Those figures were based on a study of previous stimulus packages in the US , the assumption being that Australians would behave in a similar manner.

Whether we Aussies spend or save our cash in the same ratio as the Yanks remains to be seen, but what is striking is that the use to which these targeted-bonuses are put depends entirely on choices made by individuals.

Once the cheques have been sent, and the electronic transfers done, all control over the money is ceded by government to those eight-million private citizens, each of whom will act in their own personal interest.

Such uncertainty makes this kind of cash-splash resemble a giant gamble. Have benchmarks for success even been set?

If future studies reveal, for example, that 70% of this money was saved, and only 30% spent, will the cash-injection have won its leg of the stimulatory parlay? Or will it be part of just another losing ticket, thrown away in disgust by the leviathan punters of Canberra ?

Tony of South Yarra

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121 Responses

  1. Let’s hope our financial future isn’t a Cadmean victory choreographed by Finance Department Bacchants. It might be best to leave the champagne on ice for the moment. I think Mr Swan’s and Mr Rudd’s financial rescue package also involves a bible and prayer mats for each member of the front bench.

  2. Tony

    “Once the cheques have been sent, and the electronic transfers done, all control over the money is ceded by government to those eight-million private citizens, each of whom will act in their own personal interest.

    Such uncertainty makes this kind of cash-splash resemble a giant gamble. Have benchmarks for success even been set?”

    The aim of this stimulus complies with the three T’s. Timeliness, Targeted, and Temporary. Consider it an attempt by a emergency room doctor a patient whose heart has stopped, he rubs his paddles together and calls ‘clear’ everyone stands back to see if the the heart starts functioning of its own accord.

    A benchmark would be a tolerable job level of job losses, business failures, and personal bankruptcies, I suppose.

    Remember, this crisis is hard to predict with all the knowns let alone the unknowns. Simple because it’s global in scale.

  3. A good read is via our mate Possum at: http://blogs.crikey.com.au/pollytics/

    Interesting is via: http://blogs.crikey.com.au/pollytics/files/2009/02/stim2.png

    That 84% approve of the Rudd government’s billions for schools.

    I think that this has been overlooked in the hysteria re home insulation and handouts.

  4. Stephan

    So much mythology in one comment.

    At least they are doing something to try and help. Would you prefer that the government does nothing?

  5. Stephan

    “I think Mr Swan’s and Mr Rudd’s financial rescue package also involves a bible and prayer mats for each member of the front bench.”

    Indeed it does and with good reason, so are the leaders of most countries who have put together stimulus packages.

    The results of this stimulus are likely to be mixed and will probably lead to further government spending etc all the way up to $200billion.

  6. Min, on February 17th, 2009 at 11:35 am Said:

    A good read is via our mate Possum at: http://blogs.crikey.com.au/pollytics/

    Interesting is via: http://blogs.crikey.com.au/pollytics/files/2009/02/stim2.png

    That 84% approve of the Rudd government’s billions for schools.

    I think that this has been overlooked in the hysteria re home insulation and handouts.”

    I agree Min.

  7. Well apologies for spoiling the party. I’d also agree with spending money on schools… but I disagree with the shocking waste of about 25% of the package – on handouts and home insulation.

    We’re facing serious recession, and 10% of the stimulus is based on home insulation? To me this is bizarre.

    The government should be condemned for such poor targeting of such huge sums of money.

    Every f*&$ing dollar should be used to best effect. Accepting that most of the package is ok isn’t a standard I’m willing to accept. No one should.

  8. Just in from the RBA

    THE Reserve Bank (RBA) is confident large interest rate cuts and the Federal Government’s fiscal stimulus package will flow through to the economy, although the full effect will take some time to be felt.

    The minutes of the RBA’s February 3 board meeting, said the Australian economy had been “more resilient than other industrial economies” in response to the global financial crisis.

    However, the short-term outlook was still weak despite 400 basis points worth of cuts to the cash interest rate since September last year, and the large boost to Government spending.

    “The headwinds from the global economy were very strong and would continue to have a significant negative effect on the domestic economy in the near term,” the minutes, published at 11.30am (AEDT) said.

    “This stimulus would take time to be effective and could be expected to have only a modest effect on the near-term outlook in Australia.

  9. Tom

    “We’re facing serious recession, and 10% of the stimulus is based on home insulation? To me this is bizarre. ”

    I have insulation and it actually helps to reduce my power bills. Not really that bizarre really.

  10. joni, we want the government to be pro-active but why so much inaction in Jan/Feb of 2008 when the storm clouds were gathering? Consider the chagrin of ALP fabulist K Rudd when his rescue package was delayed a whole 5 – 6 days while it was scrutinised and compare it to those balmy days in early 2008 when cricket and canasta trumped concerns about financial turmoil.

  11. Tony,

    Once the cheques have been sent, and the electronic transfers done, all control over the money is ceded by government to those eight-million private citizens, each of whom will act in their own personal interest.

    The point here is to encourage spending in the short to medium term, by spending the cash they prop up the retail and services sectors which are generally the first to suffer when people start tightening their belts. I agree that much of it will be saved or spent on useless things but this has been factored into the payments.

    The alternative is to lower taxes. This, it is argued increases spending power but also encourages people to work harder because the cash returns for doing so are greater than if there was a higher tax rate (of course this latter point relies on there being actual demand for labor which isn’t around at the moment). But the problem of how the is spent still exists – it is entirely up to the person earning the money how they spend it. Perhaps worse is the fact that it may encourage them to go further into debt based on the additional income. You might argue that this money isn’t actually Government money that is being misspent but the reality is that it is because the reduction in tax rates reduces Government revenue. Thus tax cuts and cash rebates are directly comparable in terms of how they are spent and the same criticisms apply to both.

    Based on the above, what exactly are you arguing should have been done to asssist the retail sector in the short term? Infrastructure spending wont help because there will always be at least a 6 mth lag between project money and it flowing through into wages and spending. Thus you are left with tax cuts or cash payments… As I said on the Summer Games thread, the plus of the payments is that if they are saved rather than spent, this might not help the retail sector but it will help reduce the debt burden faced by Australians; this in itself isn’t a bad thing.

  12. There is no doubt John that there is a benefit in insulating homes.

    Do you agree that with about $4bn (!!!) to spend it might not be an idea to allow some pensioners or low income earners to decide whether a priority isn’t to get their leaking roof fixed before insulation?

    Or perhaps repair/replace an energy intensive, leaking old hot water service? Or perhaps have the almost-falling-off veranda fixed? etc.

    The problem with the insulation component of the package is that it is simply an expedient, political decision. It represents poor value for money, it is lazy politics and no one should be congratulating the government for it.

  13. Tom. Insulation = large business, small business, jobs creation. Insulation = environment re reduced stress on power viz cooling and heating. If my 84yr old mum can be 8 degrees cooler in Summer and 10 degrees warmer in Winter, then it’s worth every penny. Not to mention how much she will save on her power bills.

  14. Whoops, I should mention that I used to work for Australian Gypsum before it was taken over by Boral and that I am the culprit for the advert There Aint a Better Batt and That’s That (cringe) with Gus Mercurio. For those old enough to remember.

  15. Tom

    I think Min’s answered your question.

    Min, on February 17th, 2009 at 1:20 pm Said:

    Tom. Insulation = large business, small business, jobs creation. Insulation = environment re reduced stress on power viz cooling and heating. If my 84yr old mum can be 8 degrees cooler in Summer and 10 degrees warmer in Winter, then it’s worth every penny. Not to mention how much she will save on her power bills.

  16. Fine Min, if your mum got the choice through a maintenance voucher, for example, she would probably choose insulation. Good for her.

    Others might be in desperate need of having their roof repaired, but they’ll get insulation. That is generally known as ineffective use of taxpayer funds. That’s the policy you seem to support.

  17. ditto John

  18. TomM

    insulation = BOO!!

    at least you have moved on from unions 🙂

  19. Tom,

    Your argument works for the v.small % of people who have leaky roofs but not for the vast majority of the 40% of houses that don’t have insulation.

  20. Tom

    “Others might be in desperate need of having their roof repaired, but they’ll get insulation. That is generally known as ineffective use of taxpayer funds. That’s the policy you seem to support.”

    I think you’re splitting hairs. This is large scale spend aimed at keeping the economy stimulated not a ‘boy scout’ do a good deed initiative. I can’t see the real value (remembering the aim is the introduction of money quickly into the economy as well as targeted) if it costs more to project manage than it’s worth.

    This is a simple straigh forward large scale initiative aimed not only sustaining jobs, but also reducing energy costs and maintenance requirements in the longer term.

    It’s been thought through.

  21. Dave55, on February 17th, 2009 at 1:31 pm Said:

    Tom,

    Your argument works for the v.small % of people who have leaky roofs but not for the vast majority of the 40% of houses that don’t have insulation

    Lol F$#k why didn’t I just say that. Well said Dave.

  22. I’ve said all along that the easy political decision was a “one size fits all” approach.

    The political mantra is – “don’t make it complicated” or “it needs to be able to be explained in 20 seconds”. These were the factors that contributed to this poorly targeted insulation policy, the idea that it would do something for the econony is a distant second.

    I’ve repeated, probably to the point of excruciating boredom of some, that there is about $12,000,000,000 coughed up for insulation and handouts. That’s actually quite a lot of money, even for executives in failing industries.

    If we consider how to get the best social benefit and the most effective economic stimulus for this HUGE sum, does anyone seriously think that insulation and handouts meets “the best of the best” criteria?

    Pensioners don’t have the disposable income to spend on home maintenance, their houses are usually in need of repair.

    Dave, I think most pensioners have a leaking roof and a broken shower, and a leaking hot water service and…

    John, how many jobs will be created by handing out $8bn? Put the $8bn into home maintenance and the government will directly create 40,000 jobs, which in turn will support all the retail and service jobs that the money is being handed out to support.

    Why is it that Dave, Min and John seem to think that spending $12,000,000,000 on handouts and insulation is better than fixing up the houses of the elderly, the disadvantaged, the sick? Where is the rationale?

    Really, I simply cannot follow the logic of the proponents of this less that optimal government program

  23. Tom

    This is a first phase emergency initiative. Nobody is denying that government money could be spent of more worthwhile things, however, we carrying record levels of personal debt and and initiative such as this has not only the benefit of pumping money into the economy, even if it is via one particular industry but is also aimed and reducing energy and maintenance costs.

    It’s a targeted initiative and frankly the scatter gun approach to distributing these funds is actually more likely to end up being wasted.

  24. …much more costly to manage.

  25. Why is it that Dave, Min and John seem to think that spending $12,000,000,000 on handouts and insulation is better than fixing up the houses of the elderly, the disadvantaged, the sick? Where is the rationale?

    I agree that your suggestion would have a stimulating effect but don’t underestimate how many jobs will be created installing insulation and manufacturing it. The administrative costs of the insulation program are also better than your proposal. Most insulation projects will cost over $1000, but a lot of maintenance jobs would be much less than that. The administrative cost of providing rebates to plumers or pensioners for small maintenance jobs would outweight the gain.

    Also, the insulation has long term benefits for reduced electricity consumption which means reduced demand for emission credits under an ETS (CPRS) meaning reduced cost to the economy. Further, if a pensioner saves $200/ year on electricity, they can put this towards other things (like home maintenance).

    What you are suggesting has private benefits but little public benefit – the insulation proposal does have broader public advantages as well as the private benefit for those receiving the insulation.

  26. Fine John, we are in an economic emergency. This is no excuse for poor policy.

    It is the obligation of the government to respond effectively to the circumstance.

    Take the $4,000,000,000 to be spent on home insulation. This is enough to provide every aged pensioner in Australia with $2,000 for home repairs. Why does insulation create more jobs? Why is it a better stimulus? Why is there a better social benefit?

    Min’s mum could choose insulation if she wanted, other people’s mums might prefer another type of more urgent repair.

    John, usually you are exceptionally thorough in your analysis, you’ve missed the mark with this one.

  27. “John, usually you are exceptionally thorough in your analysis, you’ve missed the mark with this one.”

    Here’s the point Tom, there are a million other things I could think of that this money could be spent on but it gets back to the big picture. I understand where you’re coming from but debate is somewhat pointless

    Ross Gittins makes a strong argument for timely action” Stimulus is Three T’s and sympathy”:

    …like most of the economists, I don’t doubt the recession would be a lot worse without the various stimulus packages.
    In preparing this week’s package, the Government has sought to comply with the Three-Ts rule of fiscal stimulus: measures should be timely, targeted and temporary.
    The timely principle says governments should apply their stimulus as early in the downturn as possible. Because things tend to snowball (economists would say multiply) in a downturn – with my cutback in spending reducing your income and thus prompting you to cut back, so reducing my income – the notion is that the earlier you act, the less things unravel. A stitch in time …
    Similarly, the targeted principle says the stimulus should go to those people or on those purposes most likely to get the money spent quickly. This favours governments spending the money themselves so that, at least in the first round of the money’s flow around our circular economy, all the money is spent on consumption or investment.
    This explains the support for spending the stimulus on capital works (now grandly named “infrastructure”). Trouble is, major capital works programs such as expressways, bridges and railways can take years to plan and get approvals for.
    Almost 70 per cent ($29 billion) of the $42 billion is going on capital works projects. But Swan has tried to ensure the money is spent quickly by targeting it towards lots of quite small building projects.
    Half the money is going on repairing and adding new facilities to every school in the country. The rest is going on fixing black spots on the roads, building boom gates at level crossings and building 20,000 new social housing and Defence Force homes, with about $3 billion going on a small business investment incentive.
    All these projects are worth doing in their own right, they should be easy to get going and they should give a boost to employment in the small businesses that dominate the building industry.
    The remaining 30 per cent ($13 billion) is going on cash bonuses – transfer payments – of up to $950 to most taxpayers, parents of school children, single-income families, some students and farmers. Many households will get multiple dollops of $950.
    The way to think of this is as a once-only, lump-sum tax cut. Whereas ordinary tax cuts are doled out at a few dollars a week, this one comes in an upfront lump.
    Another difference is that low- and middle-income families will get a lot more (and high-income families a lot less) than had the tax cuts already planned for July this year and next merely been brought forward.
    Clearly, Swan’s approach scores well on timeliness and reasonably on targeting, although this time the cash bonuses are going to many middle-income families who’ll be more inclined to save them than would poorer people.
    Malcolm Turnbull’s argument that people would be more inclined to spend a “permanent” tax cut than a once-off bonus – based on the economists’ “permanent income hypothesis” – isn’t a strong one empirically.
    Finally, the temporary principle says everything you do must be a once-off (even if spread over a few years) so that it leaves no impediment to getting the budget back into surplus once the economy is well clear of recession. Swan gets full marks on that bit.

  28. Tom my mum would love to have the back porch restumped but she can’t afford it. However, getting the back porch restumped won’t help with her power bills.

    I have a surprise for her this Christmas, a friend who is a painter is going down to Melbourne and we are going to have the lounge room and kitchen re plastered and painted for her. The house is over 80 years old and so is pre-plasterboard and needs an expert tradesperson.

  29. Dave, go and have a look at the quality of housing of most old age pensioners. They do their best, but many live in fairly dilapidated conditions.

    The way we house our elderly people is an urgent social problem. The administrative systems for this type of program are already in place. Administration of home insulation is no more complicated that getting pensioner’s houses fixed up.

    This is the aspect that I consider bizarre, that the housing conditions of the elderly are considered to be such a distant second to home insulation.

    John, that is a nice summary of a Keynesian stimulus, inter alia – the wise frugality of a household is a poor economic outcome for the economy, or something along those lines.

    I’ve not posed an argument with the rest of other $30bn for schools, infrastructure etc just the $12bn on handouts and insulation.

    And the package I’ve suggested is just as “one off” as home insulation.

    About 25% of the package is poor policy and sensible people don’t excuse this so easily.

  30. Also, Tom there is a difficulty with just general home repairs. For example wealthy retirees putting their little paws out for ‘assistance’ to have the driveway shrubs pruned.

  31. Tom

    Have you thouyght through just how difficult and costly it would be to administer a $2000 payment to pensioners (and presumably carers as well) to be spent only or repairs or maintenance? How about those in retirment homes/ villages, do they get the money?

    I don’t deny that pensioners copuld do with extra money for repairs, but why just pensioners, what makes them so special? You haven’t addressed any of my reasons why insulation is actually quite a good investment. We could all point to other things the money could be put towards but IMO insulation is just as worthy as most of them, just because you’d prefer it spent differently doesn’t make that a better or more worthy use of stimulatory expenditure.
    (at least you’ve dropped the argument that it would only benefit Queenslanders although possibly only in recognition of the excellent insulating properties of clothing from Lowes ;-))

  32. Min – and wealthy people will have their homes insulated at taxpayer expense.

  33. Administration of home insulation is no more complicated that getting pensioner’s houses fixed up.

    What a load of BS. It could be done simply in one of two ways – claim submitted directly from the insulation installers or rebates to the purchasers following a claim. In both cases the applications only relate to insulation and installation costs; it is easy to assess and process.

    In the case of home repairs, this could involve a number of different trades with different costs. Assessing whether each of these claims falls within the things the $2000 can be spent on is administratively burdensome. Further, do the pensioners get the cash and then spend it (openening the real likeihood that it will be spent on other things) or can the spend up to that and then claim it back (meaning they need the cash up front in the first place which many don’t). Add to this call out fees for different service providers (ie $100 for plumer, $100 for roofer $100 for electrician etc + labor + costs) and a fair whack of the $2000 doesn’t actually get used in paying for the actual repairs.

    IMO insulation beats your pensioner home repair idea on almost all grounds except the feel good one.

  34. Dave, I know that TB, like most in Queensland, wears shirts (from Lowes) that are made from recycled pink bats. Polyester clothing has a marvellous insulating effect it is rainproof, air can’t enter it, so there is little temperature variation. So Queenslanders really don’t need any home insulation.

    Wiht regard to policy, the government already has systems in place to ensure some in indigenous communities are required to spend their social security payments in a mandated manner. I don’t think a system for redeeming a voucher, submitting a stat dec, with receipts for materials is particularly complicated. A little auditing is all that is required, and that’s going to have to happen with insulation installation.

    The way we expect the elderly to live is a scandal. And when a government is sloshing money around, some ought to be sloshed in this direction.

    I’m quite unwilling to excuse this poor policy.

  35. Tom

    First paragraph above caused an explosion of Coca McCola over my laptop (recycled pink bats).

  36. Tom

    The way we expect the elderly to live is a scandal.

    I thoroughly agree. But that arrangement needs to provide a permanent increase to pensioner entitlements. This may be of interest

    Unfunded Debt: Pensioners ripped off
    Posted on October 20, 2008 by johnmcphilbin
    https://blogocrats.wordpress.com/2008/10/20/unfunded-debt-pensioners-ripped-off/

  37. Tom if i drown tonight its because i thought of your comment again. lmao

  38. Tom..it’s a win, win situation. Even if some so called ‘wealthy’ oldies do choose to take up the offer to have their homes insulated then it’s a win for power bills. If a house is 8 degrees cooler in summer and 10 degrees warmer in winter then you OBVIOUSLY don’t need to turn on the cooler or the heater as often.

  39. John

    Much much better 🙂

  40. John, with all this money sloshing about, some could find its way to improve the homes of pensioners. An extra $3 per week or so won’t do it.

    Min, if a pensioner’s roof is leaking, and the weather boards are falling off, I’m sure they’ll be very grateful for the insulation. That’s certainly a win-win, isn’t it?

    That really makes sense, unless you actually want taxpayer funds spent to the best economic and social effect.

  41. Tom. I agree, a hell of a lot more should be done to help pensioners. My late father was a returned serviceman and so some things were done to the house via Legacy such as a handrail for the bath and a commode. One of my mother’s fears is that some time they will come and take the commode away. I assured her that we will buy her one should they do this.

    I told Mum about the insulation and she said, I’ll believe it when it happens. Pensioners aren’t much used to having anything done for them.

  42. “John, with all this money sloshing about, some could find its way to improve the homes of pensioners. An extra $3 per week or so won’t do it.”

    It should be much more than $3 Tom, now you’re playing with me. Put it this way first phase of the stimulus is $42 billion and there’s a potential to reach $200billion. I’d hope pensioners will be factored well and truly into the equation.

    Outside of the stimulus provisions should be made to cover significant pension increases. Given the changing demographic of an increasing aging population this will be vital.

  43. But, but, but …. aren’t pensioners the very same people as these incredibly well-off baby boomers who made a motza out of the property market and are currently blaming the so called greedy X and Y generation for the financial f**k up that’s eroding their once whopping superannuation income streams??

  44. Reb..wave wave to Mr cutie..plus partner of course.

    I am a baby boomer, born ’51 and hubby born ’48 and we have next to no savings due to having to support you lot! Having to put kids through uni as an example.

    Pensioners are the really, really old people such as my mum. They have no super as there was no such thing in their day.

  45. We need the insulation…will come in real handy. But I can also see Tom’s point. It’s well argued & articulated. But people will get mighty agro now if they don’t get their handouts & bats.

    I reckon we go w/ the existing stimulus…then impliment Dentalcare or whatever it might be called. And then get the SAS to raid a few corporate aristocrats mega-mansions & penthouses…& grab the goodies for the common good.

    N’

  46. But, but, but …. aren’t pensioners the very same people as these incredibly well-off baby boomers who made a motza out of the property market…

    There’s pensioners and there are self funded retirees.

    I hope we’re talking about pensioners who have to exist totally off the pension and those who are even worse off, pensioners who rent.

    Self Funded Retirees, those who have for years been screaming for the rules to change so they can access the pension and don’t have to use their own investment money aren’t as bad off IMO.

  47. kittylitter

    good point about the renters – the type of works that Tom is talking about should be provided by the landlord currently. Giving the pensioner this money won’t help and giving it to the owner of the house creates a windfall for poor management (maintenance is one of the tax offsets associated with negative gearing).

    So we are now down to pensioners who own their own poorly maintained house. How do you distinguish these from the self funded retirees who own their own house.

    I disagree with nasking’s comment that you have argued this well Tom; it has more holes in it than the roofs you purport are over every pensioner’s head.

  48. Nasking. The insulation will not just come in handy but will reduce my mum’s power bills by $200pa. No small bikkies for a pensioner.

    Dentalcare is a VIP issue. Take 3 kids to the dentist for a check up, resulting bill $1,000. And so the result is, you don’t take the kids to the dentist.

    Sounds good N’..will be around over the weekend to collect that corriander aka collect the goodies for the common good.

  49. Kitty..the reason that self funded retirees cannot access the pension is that they have too much income.

    Sad isn’t it..to have too much income.

  50. Kitty..the reason that self funded retirees cannot access the pension is that they have too much income.

    Many of them divest themselves of assets just so their creative accountant can ensure they receive the pension.
    I’m not sure but wasn’t there something over the last few years about rules being changes and relaxed so that SFR can more easily qualify for pensions?

    Sad isn’t it..to have too much income.
    yeah, they have to drink the mid priced wines rather than the exxy ones, can’t travel as much as they’d like 😉

  51. Kitty..eeek. I just re-read. Please accept apologies.

  52. I wondered if you thought I was sticking up for the poor SFR. I’ll leave that to TB!

  53. Kitty. My late dad was a returned service pensioner. And my mum who turns 84 next week is still in the same home..it’s falling down around her ears but she is a very independant woman.

    As dad used to say, I put my sixpence in and then when I retired they gave me me my sixpence back.

  54. The roof insulation is a very good and appropriate idea indeed in this hostile climate. This sort of decision paints a clearer distinction than ever between the government and the miserable opposition, whose unverbalised credo is: “Help the wealthy first and punish the poor.”

  55. Absolutely Caney, the well to do already have their homes insulated and so are screaming blue murder at the thought of the elderly actually receiving something.

  56. John McPhilbin, on February 17th, 2009 at 2:16 pm

    Debate is never pointless when the chattering classes have decided they’d like some coarse finger-painting by Government, in Government’s interests not theirs, unless they’re dipping into a misplaced wellspring of emotive social justice which confuses desire for social goods with ‘stimulus’ of real economy, and which ignores the opportunity costs of substituting creation of public social goods for destruction of private goods in a time of public and private economic collapse, which will see people left and right of them losing private infrastructure, the sunk-costs of constructing businesses, and jobs, to replace the sophisticated stippling of the existing economy as an accretive art.

    I know that Government would like everyone to take a big step back and just look at the aggregate picture, but to my mind the consequences of doing so become inescapable when the big picture is examined inch-by-inch under a microscope for authenticity. The problem with a solely macro-economic perspective which assumes those percentages here and there are contiguous because that’s how they appear when reified, as Elise discovered last year, is that it ignores the diffuse nature of economies and their compositional characteristics at a micro-economic level. Only the micro-economies know what the micro-economies need and where, and the macro-economy is constructed from that, not the other way around. Even Government knows this, which is why it threw money around per capita, initially, and, thence, geographically; but that is still only a pseudo-approximation of what micro-economies do and what the macro-economy is.

    Gittens can say, from a macro-economic perspective, how good Government is for addressing the three-Ts until the cows come home to roost, but from myriad micro-economic perspectives its targeting blows as stimulus of an economy, because its targeting a substitute aggregate not the real economy as it exists in its fine brush-stroke complexity. And even Government knows this as it crosses its fingers, dabs some red paint around, and proffers somethings political and tangible to show for its public expenditures whilst hoping that the private infrastructures necessarily foregone in such close-targeting will be lost in the noise of economic chaos, and the political shadings of dark and light which a public attributes to its ‘short-term’ macro-economic measures and measurements.

    As a dialectic, and somewhat perversely, those who champion the thing as an absolute macro-economic boon have also described and thence sublimated why it isn’t good from a micro perspective.

  57. Legion

    I’m not sure I follow?

  58. I’m just wondering why TomM is having all the attack on the government, and not the greens etal

    I mean, as has been discussed back and forth here ad-nauseam, both ideas have merits. Why then did the greens choose bike paths and not support for the elderly. Or why did Mr X go for the same money for the Murray (just brought forward) instead of handouts to retiries?

    Labors plan is sound, and TomM hasn’t really been able to put a dent in it, and the same goes for his plan. Why then not take it up with the independants over their bartering of inconsequentials (bike lanes, brought forward money and whatever the irrelevant family dude did).

    Or is that all that is happening here anyway?

  59. “disagree with nasking’s comment that you have argued this well Tom; it has more holes in it than the roofs you purport are over every pensioner’s head.”

    Dave55, trust me when I tell you it’s far more articulate and contains more reasonable points than most Labor critics I’ve debated. I’m still for the stimulus bill as it is…& agree w/ Min. and others on the need for mass insulating of roofs..

    And I truly believe this country is in dire need of a compassionate, well-funded & sensible dental program. The state of the general populace’s teeth is a disgrace…contributing to a variety of sicknesses and damage to organs. We’re quite willing to have an increase in the Medicare tax if that’s what it takes to ensure Australians are not walking around w/ rotting teeth…& dying from preventable causes.

    Dave55, you make many effective points & counterpoints too.

    Personally, i can’t wait for it all to begin rolling out. We just received a worm farm rebate of $50 in our account & I’m happy as Larry.

    It’s been a long time since my wife & I have received any of our tax back. Thanx Anna Bligh & team.

    It’ll help pay for the cat registration that the blasted Logan City Council has decided to impose on us. Sigh. Easy come, easy go.

    N’

  60. “The insulation will not just come in handy but will reduce my mum’s power bills by $200pa. No small bikkies for a pensioner.”

    Absolutely. The government really needs to reform the pension system. This will help.
    N’

  61. “yeah, they have to drink the mid priced wines rather than the exxy ones, can’t travel as much as they’d like”

    :)…

    but I do feel for couples like my wife’s parents. They came from nothing…poor as church mice…and worked mowing, cleaning, assisting the aged and so on most of their lives, in fact are still going at it…and over the years acquired some shrubby, dry farm land (built some small dams) a fairly ancient looking, poxy, no extra amenities place at the coast (but it does as a base to go swimming and such) and paid off their old house.

    Now it’s not their fault they are assessed as owning too much…& don’t wanna get rid of the wee farm & coastal place. They’ve paid heaps & heaps of taxes over many years and also got hit w/ dreadful interest rates in the past…and I reckon it’s so sad they have to either sell the few things they have which mean so much to them (these are people who rarely travel, have no luxury goods, don’t go to expensive restaurants but have saved hard & sacrificed over the years) …or keep working until they drop…’cause their Super is so low…& they can’t get any pension.

    That doesn’t seem right to me.

    N’

  62. Dave – “How do you distinguish these from the self funded retirees who own their own house.”

    Um, one lot get a pension and the others don’t? I suppose that’s one way to distinguish.

    Min – “The insulation will not just come in handy but will reduce my mum’s power bills by $200pa.”

    Fine, then with my suggestion she can exercise this option. You seem to be arguing that others shouldn’t have an option. Yes, to get their roof fixed if that is what they need.

    Min – “the well to do already have their homes insulated and so are screaming blue murder at the thought of the elderly actually receiving something”

    So, it is a political decision.

    Caney – “The roof insulation is a very good and appropriate idea indeed in this hostile climate”…etc

    And repairing dilapidated houses for elderly pensioners is inappropriate?

    Tom R – “I’m just wondering why TomM is having all the attack on the government, and not the greens etal”

    Because the government came up with the policy. It is their responsibility to introdusce economic policy that meets the criteria of a stimulus and provides a better social outcome. Insulation and handouts are a distant second or third.

    Thanks Nasking.

  63. nasking

    Dave55, trust me when I tell you it’s far more articulate and contains more reasonable points than most Labor critics I’ve debated.

    Well, when you put it that way… Tony deserves some credit on that front as well.

    I’m not against increasing payments for pensioners to allow them to carry out necessary repairs etc but I just don’t see it working as a stimulus – like you, I’m generally in favour of the package as passed and actually think the insulation thing is a good move.

    I’m also in favour of the move to introduce a dental care or bring dental under medicare. If people knew they could get a free checkup once or twice a year and not have to pay anything for fillings etc – ever – I’m pretty sure they would wear the increase in medicare levy equivalent to about $3 a week. Interestingly, the breakdown of the latest Essential Report over at Pollytics strongly suggests that people are willing to pay more taxes if it is spent on services that they (or their kids) will use. Pretty sure dental will fall into this category (besides, would the Libs be game enough to deny free dental care to people on the basis that it would need a .7% increase in income tax?)

  64. It almost seems as though Tom, Legion and N’ are pointing out the inequities inherent within capitalist societies. Please guys, correct me if I’m mistaken.

    If that’s the case, this debate aside, given the emphasis is on emergency measures where the three T’s are being employed, I’d agree that capitalism has many flaws.

    In fact, Minsky stated that many leaders of capitalist countries do “not seem to be aware that the normal functions of our economy leads to financial trauma and crisis.” And that poverty within these environments can exist and often does exist in spite of broader affluence.

    You only have to look and the $30 million or so people in the US who live in poverty and the numbers have been gradually increasing for years. A very uneven playing field does exist.

    Discussion centering on the treatment of the less fortunate and how capitalism addresses the inequities are of major importance, in my opinion, especially in the light of how badly the system has now proven to be.

    George Soros takes also examined the flaws he associated with free-market fundamentalism in his book Open Society, Reforming Global Capitalism:

    “The protection of the common interest used to be the task of the nation state. But the powers of the state have shrunk as global markets have expanded. When capital is free to move around, it can be taxed and regulated only at the risk of driving it away. Since capital is essential to the creation of wealth: governments must cater to its demands, often to the detriment of other considerations. Chasing away capitalism can do more harm than taxation and regulations could bring.

    The capacity of the state to perform the functions that the citizens have come to expect of it has been impaired. This would not be a concern if free markets could be counted on to take care of all our needs, but this is manifestly not the case. Some of our collective needs are almost too obvious to need mentioning: peace and security, law and order, health, education, human rights and some elements of social justice. Market values express only what one participant is willing to pay another in free exchange and do not give expression to their common interests. As a result, social values can only be served by social and political arrangements, even if they are less efficient than markets.

    The global capitalist system has produced a very uneven playing field. The gap between rich and poor is getting wider. This is dangerous, because a system that does not offer some hope and benefit to the losers is liable to be disrupted by acts of desperation. By contrast, if we offer economic incentives to countries that are eager to take advantage of them we create a powerful tool for crisis prevention. Incentives foster economic and political development: the fact that they can be withdrawn provides leverage that can be used against recalcitrant governments.

    Unfortunately, the global financial architecture that prevails today offers practically no support to those less fortunate. Current trends go in the opposite direction.

    Since market fundamentalism has become so influential, it today constitutes a greater threat to a global open society than communism and socialism, because those ideologues have been thoroughly discredited.

    Markets are not perfect. They can only cater to individual needs; taking care of social needs is beyond their scope. And even as the allocation of resources they are less than perfect: financial markets are inherently unstable. That does not mean we should abolish capitalism; rather we should endeavor to correct its shortcomings.

    Communism sought to abolish the market mechanism and to impose collective control over all economic activities. Market fundamentalism seeks to abolish collective decision-making and to impose the supremacy of market values over all political and social values. Both extremes are wrong. We need to recognise that all human constructs are flawed. Perfection is beyond our reach. We must content ourselves with the second-best; an imperfect society that opens itself open to improvement. Global capitalism is badly in need of improvement.”

  65. John McPhilbin, on February 17th, 2009 at 6:15 pm

    How economic agents in micro-economies actually ‘think’:

    there are a million other things I could think of that this money could be spent on

    We could all point to other things the money could be put towards but IMO insulation is just as worthy as most of them, just because you’d prefer it spent differently doesn’t make that a better or more worthy use of stimulatory expenditure.

    In the case of home repairs, this could involve a number of different trades with different costs

    And even like this…

    …to have the driveway shrubs pruned.

    And keeping in mind this…

    Because things tend to snowball (economists would say multiply) in a downturn – with my cutback in spending reducing your income and thus prompting you to cut back, so reducing my income – the notion is that the earlier you act, the less things unravel.

    …Government has blithely substituted its consumption and its notion of a portion of aggregate demand for the ‘million other things’ which preceded that drop-off in aggregate demand, an aggregate demand composed of those ‘million other things’, which it is seeking to address, under the assumption that the stimulated “money’s flow around our circular economy” will magically substitute for those “money’s flow around our circular economy” which prior producer-consumer dynamics produced and which were travelling a ‘million other circular pathways’, with different points of micro- and not macro-economic origin, emanations from those point-sources, and different macro-micro imperatives.

    Gittens et. al., like the Government, are politically drawing on the notion that “all these projects are worth doing in their own right” while baldly asserting that “Swan’s approach scores…reasonably on targeting”. I would dispute the reasonableness of that targeting on effectiveness grounds, not in terms of who spends or saves what, but because it ignores the ‘million other things’ and the ‘million other pathways’ and the skews the verities of consumption on what and where and how and why in a real macro-economy composed of inter-locking micro-economies; and beause it still provides no account for the opportunity costs of that substitution vis-a-vis prodigious common wealth previously invested into other productive micro-economic patterns according to those ‘million other things’ and ‘million other pathways’.

  66. How come these people want to help pensioners when their favoured party is not in Government?

  67. Legion, What was it you wanted to say?

  68. Legion

    And even like this…

    …to have the driveway shrubs pruned.

    And keeping in mind this…

    Because things tend to snowball (economists would say multiply) in a downturn – with my cutback in spending reducing your income and thus prompting you to cut back, so reducing my income – the notion is that the earlier you act, the less things unravel.”

    What you say is true, however, priorities in dealing with the crisis are also important. And nobody is expecting to solve all the potential problems we face with a a quick injection of $2billion. We have to be realistic about the costs and benefits and this type of debate could continue until the end of time Legion.

  69. Dave55

    I’m not against increasing payments for pensioners to allow them to carry out necessary repairs etc but I just don’t see it working as a stimulus – like you, I’m generally in favour of the package as passed and actually think the insulation thing is a good move.

    I’m also in favour of the move to introduce a dental care or bring dental under medicare. If people knew they could get a free checkup once or twice a year and not have to pay anything for fillings etc – ever – I’m pretty sure they would wear the increase in medicare levy equivalent to about $3 a week. Interestingly, the breakdown of the latest Essential Report over at Pollytics strongly suggests that people are willing to pay more taxes if it is spent on services that they (or their kids) will use. Pretty sure dental will fall into this category (besides, would the Libs be game enough to deny free dental care to people on the basis that it would need a .7% increase in income tax?)”

    I concur. I think there’s actually more common ground in this debate than there is differences. Since the discussion is based on the ‘stimulus’ it makes sense to carefully select targets that will most likely improve our odd of weathering the immediate threat posed by a potentially severe and prolonged economic downturn.

    In the long run, however, the various inequities that the system ignores or overlooks needs a very serious review.

  70. Muskiemp, on February 17th, 2009 at 7:23 pm

    There is an opportunity cost involved for existing private infrastructures which rely on specific demands by multiplicities of economic agents and extensive micro-economic consumption patterns which is being ignored in focusing on macro-economics and desirable public works; substituting intensive government demand for limited public works in simple interactions by one economic agent for an aggregate demand by pluralities of economic agents engaged in complex interactions will not necessarily safeguard productive aspects of the economy if the circularity supposed does not reach those bits of the economy because politics has trumped economics.

    In short: what is the medium-term compositional opportunity cost for the public and the private components of the real economy in Government’s simply saying AD = AD’ under a prescriptive economic policy?

  71. Legion

    I find it extremely hard to follow you unfortunately. Could you perhaps modify your language to include simple examples of the points your are trying to make?

  72. “Global capitalism is badly in need of improvement.”

    “Amen” to that.

    “How come these people want to help pensioners when their favoured party is not in Government?”

    That’s a good point Muskiemp.

    “but because it ignores the ‘million other things’ and the ‘million other pathways”

    However Legion, I prefer to have a stimulus package that offers up help for schools, to build affordable homes, create safe bike paths, provides workers w/ money to either pay down debt &/or purchase necessary goods, installs bats in order to help save energy costs & reduce the need for energy consumption…than that which many of us witnessed under Howard…

    either sweet dick all OR incentives to get further into debt OR discriminating payments to buy off families & motivate them to have many a child they may not be able to afford in the future OR incentives to go private anything and everything so a few mates and top-end-of-towners could reap the benefits & profits and charge thru the roof. And in turn erode the influence of the worker’s protectors & negotiators…the Unions.

    I’m not saying Unions are perfect…I saw the negative effects of such in the UK way back when…sometimes strikes were crippling & shop stewards and such abused their positions. But in this age of instability & insecurity, partially due to the gambling habits of marketeers & financiers, the idea of having a government that is focused on eroding Union power, and the workers conditions, is simply terrifying.

    I’d rather see one parent in a fairly paid job than both working for peanuts & feeling driven to act like trained monkeys.

    N’

  73. “Legion
    I find it extremely hard to follow you unfortunately. Could you perhaps modify your language to include simple examples of the points your are trying to make?”

    Hee hee good luck with that one! Legion is either some sort of wanker arts student trying to show off his thesaurus skills or a scientologist ( or maybe both). Seriously – what sort of knob writes like this?

  74. “How come these people want to help pensioners when their favoured party is not in Government?”

    Lazy, uninformed partisan commentary.

    John, my basic premise is that there are other, forms of stimulus that have a better employment impact, with a better social outcome.

    The government has chosen the easy way, the one that conforms with a simple message, a 20 second news grab.

    Any rational person would question whether spending $4bn+ on insulation the most effective for public benefit? It isn’t.

    Dave – “I’m not against increasing payments for pensioners to allow them to carry out necessary repairs etc but I just don’t see it working as a stimulus”

    But you don’t advance any genuine rationale as to why insulation is a better economic stimulus.

    That’s why I dislike it. It is as lazy as the comment above by Muskiemp.

  75. kittylitter, on February 17th, 2009 at 5:20 pm

    Don’t need a defence KL, I’m reasonably well off at 61, but my income has dropped dramatically at the moment because of falling interest rates.

    I have paid my due of taxes, spent a couple of years in the army that none of my mates had to, and went to work at 15 as an apprentice. After 46 1/2 years in the workforce, mostly travelling, I figured I wanted to share my grandkids growing up, I’d already studied by distance ed for nearly nine years, worked full time, travelled for work and missed my kids developing.

    I have no regrets – but of all the people that are/will suffer the coming recession SFR will take the brunt…

    …most baby boomers I know (and I repeat) have worked their arses off…

    …as a SFR I experience X and Y gens working – and they don’t work their arses off!

    ========================

    Here’ a typical week just before I retired:

    Wednesday – fly to Townsville arrive at 7pm
    Thursday – 5am at T/vlle airport – 8am land at Cannington mine. 8:30 am Start training course – finish around 8pm
    Friday – 8am to 8pm Training
    Saturday – 8am to 8/9 pm Training
    Sunday – 8am to 8/9 pm Training
    Monday – 8am to 3pm – Admin – 5pm fly to T/ville
    Tuesday – 6am fly to Brisbane – 10am take The Minister to breakfast. 12MD debrief and prep for next trip.
    Wednesday – 6am fly to Curragh mine…

    Motto: The harder you work the luckier you get!

    I married my wife 40 years ago we had $300 in the bank and owed $1600 on a Honda Scamp (2 cyl mini) and a baby on the way. It took us three years to accumulate enough deposit for our first house – we live in our second (for 25 years)…

    Defend no – recognise other people suffering you
    betcha!

    Sorry about any typos got to mash the taties for dinner…

  76. Here comes the flood:

    California to cut 20,000 public sector jobs

    http://www.abc.net.au/news/stories/2009/02/17/2494015.htm?section=justin

    The Terminator acting out his fictional character…

    add the Japanese depression news…

    all part of a global catastrophe…I hope the political & finance-based incompetents, liars & gamblers are happy w/ themselves…plenty of pissed off American & Japanese families are gonna be lookin’ for some payback if they can’t find jobs…& lose their shelter.

    Ain’t rampant capitalism a ball?

    N’

  77. Ain’t rampant capitalism a ball?
    N’

    Maybe you should go and live in China or something ? You sure sound like a bit of a communist

  78. dave55Report over at Pollytics strongly suggests that people are willing to pay more taxes if it is spent on services that they (or their kids) will use. Pretty sure dental will fall into this category (besides, would the Libs be game enough to deny free dental care to people on the basis that it would need a .7% increase in income tax?)

    I’d much rather pay for a decent universal health, dental and education system. Happy for my taxes to go to that, but not happy for too much tax to be taken in the first place and churned back as bribes to others who don’t need it.

    TB…most baby boomers I know (and I repeat) have worked their arses off…
    …as a SFR I experience X and Y gens working – and they don’t work their arses off!

    I know that you are not one of the greedy ones TB, you are there for your family and to be commended.

    I do think that’s an unfair generational generalisation though, The X and Y kids have inherited a completely different system to what you and even I have lived under.

    I’m a decade younger than you TB but when you and I finished school, we knew that we would have a job – X & Y don’t have that comfort. I’ve worked hard ever since I started work (time off for kids though and no maternity leave or part-time work in my day). My own kids are working hard, they put a lot into their jobs and the employers get their money’s worth. X & Y will be living out of their cars while they juggle 1,2 and 3 part time, casual jobs just to make up one full time wage.

    Many baby boomers of retirement age are still sitting in the jobs, refusing to retire and move on so X & Y can take their places in the heirarchy. many baby boomers are getting botoxed, having plastic surgery and becoming gym junkies in an effort to look younger so that they don’t feel pressured to retire. It’s quite selfish really, if they have the money to retire they should do so now.

    Uni was free for our generation, X & Y have huge HECS debts and have to work thru their uni degrees compromising their grades (unless they are fortunate to have wealthy parents).

    We had a relatively stress free, simpler existence compared to this competitive, dog eat dog, lifestyle of today.

    We worked in an era when a job was a job for life, there was loyalty shown to a good worker by the employer and you stayed until you retired. X & Y will never know that kind of job security and loyalty, they will spend one or two years in a job, get experience and move on to the highest bidder for their services.

    I just think that it isn’t right to compare two vastly different lifestyles and say that X & Y don’t work hard enough, or that you had it so much harder – it’s too different.

    Min“the well to do already have their homes insulated and so are screaming blue murder at the thought of the elderly actually receiving something”

    Add …screaming blue murder at the thought of the elderly actually receiving something…for nothing.

    I wonder if that is the crux of tom’s argument, he wants a voucher or something to be given to all, so that those who have already got insulated houses can get something out of it too – everyone has to get something!

    Reminds me of the parental leave vs baby bonus argument. Howard gives a baby bonus as a de-facto maternity leave payment because he refuses to let working mothers have something that stay at home mothers don’t get (even though they don’t work). So we’re all paying for the wealthy stay at home mothers when we should be supporting working women to gain equity and equality in the workforce.

    It’s ideology pure and simple.

  79. Kittylitter

    Probably wasn’t clear enough with that post. I agree – I’d rather taxes go to healthcare etc but my point was that the support for the school payments was up above 80% meaning that people are more than happy for their money to go to things like health and education.

    As for the cash payments, I think we’ll find out how successful they are soon enough. In an ideal world (ie, no GFC), I doubt that this government would even consider such a thing the last Government on the other hand had no such qualms.

  80. But you don’t advance any genuine rationale as to why insulation is a better economic stimulus.

    If both were done well, both have a positive stimulus effect but I think I have pointed out why the insulation is better and that is that it is all spent on one thing rather than many small things provided by different tradespeople. Call out costs make up a large % of the cost of small jobs for tradespeople. The consequence of this would be that of your $2000, perhaps 50 or 60% of it actually goes to the jobs and the other 40-50% goes to padding. By the Government investing all of the money in one trade, they are guaranteed jobs and the % lost to this call out is reduced because they have more certainty of work. The % of Government money that goes to the end product is much larger from the insulation payments. Additionally, the batts and other insulation products (wool etc) are made here in aus. So the stimulus goes to both manufacturing as well as supply – this isn’t guaranteed from your proposal. Thirdly insulation has significant ongoing financial advantages for those benefiting from it in the form of reduced energy costs. This in turn flows through to reduced energy demand which will result in lower demand for credits when the CPRS is introduced – this reduces the cost of the CPRS of the community as a whole (including pensioners) which is a benefit.

    I am not saying that insulation is the best bang for buck that the Government could get, but it certainly isn’t the worst and the improvements in insulation are needed.

  81. “I wonder if that is the crux of tom’s argument, he wants a voucher or something to be given to all, so that those who have already got insulated houses can get something out of it too – everyone has to get something!”

    No Kittylitter, I’m not suggesting that everyone get something. Quite the contrary, I’m only arguing that those that number among the most needy (ie pensioners) get something.

    Others prefer to have a non means tested home improvement package (insulation) available for the many lazy well off people that don’t worry about the cost of heating and air-conditioning.

    Is the home insulation package means tested? No.

    Dave, my point is to demonstrate the lack of depth in the government package regarding handouts and insulation, but to clarify –

    This isn’t a call out, it involves planned work. It isn’t an emergency. So I can discount your 50%-60% production and the balance to padding.

    I’ve allowed a built up labour cost of $50/hr to include $25/hr paid directly to the person doing the work, another $25/hr for supervision, administration and overheads. I’ve also allowed another $50/hr for materials. Generous I think. For the cost of the handout, the government could directly create 40,000 jobs. Throw in the insulation cost and there is enough to directly create 60,000.

    I’ve not seen anything here that suggests that the government package has a target, or any measure against which we can assess whether they have spent our money well.

    Bats made in Australia? Fine, but where is the consistency about the handout, when how many new TVs will be purchased?? Roofing materials are usually made here, as is a lot of paint, weather boards aren’t imported as far as I know.

    With regard to CPRS, how much is added by the desal plants we’re building. Because I also think that investing in domestic water tanks is a more environmentally friendly program than insulation, at least here in Victoria.

  82. kittylitter, on February 17th, 2009 at 9:26 pm
    We had a relatively stress free, simpler existence compared to this competitive, dog eat dog, lifestyle of today.

    Not sure my life was exactly stress free! Like anyone else I guess – good times, bad times – and the “dogs” have always been there…

    Agree, I shouldn’t have generalised, I’ve got four (two kids and spouses) workijng their arses off and most of my friends’ kids…and my g/kids have excellent school reports – life’s good…in that department.

    Each generation has its own issues – I was born a couple of years after WWII and I can remember ration cards as a kid and playing in bombed houses and walls where the iron railings had been cut off for the “war effort”. Both my parents served during WWII – mum in anti aircraft batteries in London and dad in the Royal Navy on Atlantic convoys. Not something I would want to have experienced – playing soldiers was enough for me.

    My dad worked night shift at David Brown Tractors and then worked during the day as a painter (his trade).

    When we came to Oz he rode around looking for work on my pushbike with fourpence (cost of a phone call) in his pocket and an apple for lunch.

    I could ramble some more but my point is that each generation has its “cross(es) to bear”. The “dog eat dog” you mention is manifested in the “baby boomer” bashing – something we never did to our parents.

    As for hanging on to jobs – some of them have no choice – its called survival, I’m afraid…

    Gotta go – off to Centrelink to apply for a job – can’t survive on these RBA cash rates… 😦

    No handouts for SFR…(not much sympathy either…)

  83. I could ramble some more but my point is that each generation has its “cross(es) to bear”.

    Actually, that was my point TB, after you accused Gen X & Y of ‘not working their arses off,’ unlike your generation. Now you concede that there are vastly different circumstances these days for X & Y, but you don’t like them to ‘bash the boomers.’

    Even when it’s deserved?

  84. Well said KL.

    That was my point also.

  85. KL, I said I shouldn’t have generalised.

    Why is it OK to bash baby boomers? That’s generalising too. You can’t isolate one group for generalising and not others…

    Bit like saying that, as soon as the ALP is voted in the economy crashes and it won’t get better till the Liberals return. Life events are life events.

    …and life and people don’t change much over the centuries just the technology…

    I don’t believe there are “vastly” different circumstances – “each generation has different circumstances…” just different – its how we deal with them that counts…

    Remember I live in the same “circumstances” today as gen Y – I’ve also lived gen X and baby boomer circumstances. Its the approach to life that changes – watch some of the protest marches in the sixties – then watch some from this century…

    …watch the manners of gen Y and watch the manners of baby boomers (in general of course)

    Whatever the circumstances each gen. has to do the best they can – some do better than others – I believe that I and my family have (but then we don’t aspire to be multi millionaires – just “comfortable”) – but I also believe that there are many people less fortunate than we are – they need help…

    …and there are people in all living generations who just sit on their arses and whinge…

    This discussion started over SFR – of all society they are the most neglected in times of trouble – its a “they chose it they can wear it” attitude, that I suspect borders on jealousy…65 is the “target”, if you choose to retire from the workforce before that, then you wear the consequences (that’s why I always tell people I worked for 461/2 years – ’cause most don’t! Lotta taxes too).

    Many SRF’s do volunteer work or help with family and friends issues with no thought of payment – but they too need to survive. They too are part of our society and should not be ostracised…

    Political parties should be aware that the baby boomer retirees and pensioners will form a large voting bloc within the next few years – and one thing baby boomers have, is long memories…

  86. “…and life and people don’t change much over the centuries just the technology…”

    I’m not so sure about that TB. When I worked in a senior management position in Sydney, I was more or less expected to be “on call” 24 hours a day.

    It wasn’t unusual for me to receive work related phone calls from the CEO on weekends or to be oblidged to attend dinners etc after work and on weekends where primarily work and business strategy were discussed.

    Today, with email and portable communications devices like Mac Air Books, Blackberries and Wifi, professional people are expected to be contactable anywhere at anytime.

    Also, if you work in an office environment in a main capital city (public servants excepted of course) you’re pretty much expected to be there until about 6 or 7pm even if the “official” working hours are until 5pm.

    It’s no wonder there is so much road rage, increasing domestic violence and child abuse when people living and working are struggling with work pressures as well as huge mortgages, downward pressure on wages, school fees and so on.

    Today, people are expected to be highly qualified and able to cope with extreme pressure and stress. If you can’t, you’re simply ousted and replaced.

    I’m not saying that older generations (including boomers) didn’t do it it tough, but to suggest that today’s generation have it easy would be incorrect.

  87. “This discussion started over SFR – of all society they are the most neglected in times of trouble – its a “they chose it they can wear it” attitude, that I suspect borders on jealousy…”

    I suspect that the “borders on jealsouy” is an example of projection.

  88. More sound, intelligent and friendly input from our trio of interchangeable accountants – Huh, Rigles and Pollytickedoff.

  89. You bash Gen X & Y because you don’t like their manners?

    Why do you think SFR are ostracised by society? Aren’t they retired, doing whatever it is that they wish to do?

  90. Was just thinking yesterday Tom that you are like a dog ith a bone – you get an idea and no matter what you just won’t let it go – no matter how stupid you look.

    Unions BOO, Insulation BOO and it seems even Huh is a BOO for you.

    How sad your obsessions appear.

  91. No, just stupidity BOO

  92. Then how on earth to you explain so many of your posts.

  93. Many contributors here are willing to simply accept the word of the government for the effectiveness this program. They’d prefer to not bother to discuss possibly more socially advantageous alternatives.

    I’m not inclined to this position, whereas you probably are.

  94. TB..hubby and I were just talking about it last night, how proud my late Dad was at how his grandchildren had got along in life. Two with uni degrees and son in the Navy.

    My dad was a factory hand. Jeff’s father had the baker’s round and drove the baker’s horse. Jeff’s parents had a war service home, very tiny especially with 4 children but it was theirs.

    I’ll never forget my Dad a week before he passed away. He had forgotten lots of things but he could still read. Youngest brought a draft copy of her thesis with her to Melbourne and my father sat up in bed at the hospice and read it cover to cover. Staff asked, What is your father doing? Oh I said, He’s just reading his grand-daughter’s thesis. Could have knocked’em over with a feather.

  95. Tom of Melb

    This isn’t a call out, it involves planned work. It isn’t an emergency. So I can discount your 50%-60% production and the balance to padding.

    I now have absolutely no idea what you are now proposing Tom because the above quote makes no sense nor does it reflect reality unless you propose to have a team of labourers who are permanently retained to go around to all these pensioners (who own their houses because the rest should be provided by renters) places and fix whatever is necessary up to $2000 in value.

    If you give it to a pensioner to work it out, they will need to identify what is needed and then call in the relevant plumber. Whether it is an emergency or not, the costs charged by tradespeople incorporate a call out component – for bigger jobs this represents a much smaller compnent of the cost but for little jobs (like fixing a leaking hot water system (your example) the % is a significant part of the cost. Admitedly a complete re roofing job would be similar to the insulation component but you are suggesting that they could use this for any and all repairs.

    You also overlook the fact that the money to schools can (and will) be spent on repairs and maintenance. Do you want to result in delays to these projects as these tradies compete with your pensioner’s jobs? The money for schools does exactly what you are suggesting but without helping the pensioners (think about the children!)

    Also, unemployed and low payed people can access the insulation money and reduce their energty costs – are these people any less worthy than pensioners (who can also access the insulation and save).

    I’m sorry Tom, what you have suggested is admirable and socially progressive but it doesn’t beat the imsulation program in terms of bang for buck as a stimulus.

  96. As an aside, thanks for eing so persistant on this Tom, it has made me think more about the insulation proposal and I have come to think it is better than I had originally thought. And the fact that I agree with the proposal does not mean that I have not looked at it critically or am not willing to criticise the Government – I jsut pragmatic enough to recognise that they can’t do everthing for everyone right at the moment.

  97. Dave – you said –

    *” I now have absolutely no idea what you are now proposing Tom because the above quote makes no sense nor does it reflect reality”

    But you had earlier said –

    *“Call out costs make up a large % of the cost of small jobs for tradespeople. The consequence of this would be that of your $2000, perhaps 50 or 60% of it actually goes to the jobs and the other 40-50% goes to padding.”

    I was replying to a point you made. It seems you incorrectly used the term “call out” and used “padding in place of “under utilisation”.

    Don’t blame me if you don’t understand. I’m referring to a program of job creation, that is more effective than handouts and insulation installation, and it is more advantageous socially (in my opinion). When I say jobs are planned, I mean they can be planned just as Skilled and Jims franchises (eg) plan them at the moment.

    *“unless you propose to have a team of labourers who are permanently retained to go around to all these pensioners”

    No, not necessarily labourers. All you need do is look at some relevant models of organisations that employ this type of workforce. Skilled already have an office in just about every region and town in the country. They already do a lot of work funded by the federal government.

    Jims franchise has a model for effective utilisation. No doubt there are plenty of other examples.

    *“If you give it to a pensioner to work it out, they will need to identify what is needed and then call in the relevant plumber.”

    You seem to have a low opinion of the capability of pensioners. Most arrange various services at present, but they don’t have enough disposable income to maintain their home in good condition. They know whether they need a plumber, a painter or an electrician. Many companies employ all trades, and will provide a one stop shop if this type of program was implemented.

    *“Also, unemployed and low payed people can access the insulation money and reduce their energty costs”

    Fine, so can people on high incomes, who have been too lazy to get it installed themselves.

    *“You also overlook the fact that the money to schools can (and will) be spent on repairs and maintenance. Do you want to result in delays to these projects as these tradies compete with your pensioner’s jobs?”

    No, I haven’t overlooked this. Entire mines are closing. Manufacturing plants have shut. Construction is in steep decline. The fact is that the program of school maintenance won’t mop up the severe levels of unemployment. And I’ve already said that I’m in favour of this part of the package.

    There will be so much unemployment in these sectors, there won’t be any competition for a skilled workforce. Far from it.

  98. By the way Dave, you enjoy picking holes in my proposal, particularly about practicality and administration. Here’s one for you, in the spirit of picking holes -.

    My home is insulated, but I don’t imagine the government knows this. What is to stop someone like me from engaging an insulation provider with a deal where he does nothing other than have me sign the bill for work completed. He then splits the couple of thousand with me.

    How is a maintenance voucher for pensioners anymore open to abuse than this?

  99. blockquote>How is a maintenance voucher for pensioners anymore open to abuse than this?

    It’s not – and there is your answer.

    As for your scenario, that is Fraud and there is a significant criminal penalty for defrauding the Government.

    And even if you did get extra insulation instead of just a side deal with the installer, it does improve your overall insulation so, putting aside the fraud issue, it still helps acheive the Government’s end goals of a) stimulating expenditure in the economy and b) reducing demand for electricty.

    BTW, I wasn’t suggesting that your pensioner scheme was open to abuse any more than the insulation scheme – both would be abused – that’s inevitable. My point was simply to point out that multiple maintenance jobs on one house will result in less of the money going to the actual job and materials when comparred to a single job of the same amount. I’m not suggesting that these tradespeople would be roting the system, I’m just pointing out what happens in practice already.

  100. reb, on February 18th, 2009 at 11:14 am

    sreb, you are just reinforcing my points…so the technology has changed?

    Many of my jobs meant I was on 24 hour call. Before computers or mobile phones! 😉

    Obviously inconsiderate managers and silly corporate cultures still (and always will) exist.

    Good thing about technology is that you can turn it off and take messages and reply at will…

    I too have worked “expected” hoursover and above the “negotiated hours” (James Hardie was a classic for that!) .

    Early in my career, when I was in overalls, after the first 8 hours we were paid “… time and a half for the first three hours and double time thereafter…” but our base rate was a lot lower than today and out taxes were higher…at 22 I went onto salary – virtual open slather, just like today. (The army was good too on call 24/7 – fixed income)

    We all have to make our own choices in whatever situation we are in – I chose to work for myself because of most of the bosses I had worked for were pretty bad at it and I could earn the same money as a consultant for me rather than someone elses company.

    I’m not saying that older generations (including boomers) didn’t do it it tough, but to suggest that today’s generation have it easy would be incorrect.

    Did I suggest that?

    I think that’s putting words into my post…

    Agism is equally as wrong as any other politically incorrect “ism”

    ===================================
    Tom of Melbourne, on February 18th, 2009 at 11:55 am

    Actually I think I’m getting better at ignoring the trolls and the snipers, Tom…makes life a bit easier.

    ====================================

    Min, on February 18th, 2009 at 1:42 pm

    Important things in life, Min…

    You do need an income to live but not to enjoy life…

    Some people don’t get it…

    The Minister and I were only talking ‘tother night about the days when I brewed my beer ’cause I couldn’t afford the “real stuff” (Ah!) and how we used to have wonderful parties on next to nothing…mainly just good company…those were the days…

  101. TB – “You do need an income to live but not to enjoy life…”

    That’s easy for you to say from the sheer luxury of a polyester safari suit.

  102. TB:

    “Did I suggest that?”

    Well kind of…….

    “…most baby boomers I know (and I repeat) have worked their arses off…”

    “…as a SFR I experience X and Y gens working – and they don’t work their arses off!”

  103. Tom of Melbourne…

    LOL!!! 🙂

  104. Tom of Melbourne, on February 18th, 2009 at 3:54 pm Said: My home is insulated, but I don’t imagine the government knows this. What is to stop someone like me from engaging an insulation provider with a deal where he does nothing other than have me sign the bill for work completed. He then splits the couple of thousand with me.

    I guess that this would make you a lying a*hole.

  105. sreb, I did correct my statement later – this covers BB, X and Y Gen…

    TB Queensland, on February 18th, 2009 at 9:41 am
    Agree, I shouldn’t have generalised, I’ve got four (two kids and spouses) workijng their arses off and most of my friends’ kids…and my g/kids have excellent school reports – life’s good…in that department.
    Each generation has its own issues

    Its not a gen thing its a “time” thing – service, standards and quality of products has nosedived in the last decade but that’s all gen workers…not just an era…

    …these days some people believe they are “entitled” to things, must be the influence of Tip Custard…just wait and it will come to you…

  106. But Min, you were critical of my suggestion on much the same basis.

    You said – “For example wealthy retirees putting their little paws out for ‘assistance’ to have the driveway shrubs pruned.”

    When I had never suggested that this type of home maintenance ought to be provided to wealthy retirees. Only pensioners.

  107. One thing that always fascinates me about Australia is the obsession w/ proving how much one works. It’s like some overseer has a whip at each gathering & the participants are aware of the lash holder’s intolerance of anyone who doesn’t fart on continually about how HARD they HAVE & ARE working. It’s quite boring to be honest.

    EFFORT:
    [noun] earnest and conscientious activity intended to do or accomplish something; “made an effort to cover all the reading material”; “wished him luck in his endeavor”; “she gave it a good try”
    Synonyms: attempt, endeavor, endeavour, try

    [noun] use of physical or mental energy; hard work; “he got an A for effort”; “they managed only with great exertion”
    Synonyms: elbow grease, exertion, travail, sweat

    [noun] a series of actions advancing a principle or tending toward a particular end; “he supported populist campaigns”; “they worked in the cause of world peace”; “the team was ready for a drive toward the pennant”; “the movement to end slavery”; “contributed to the war effort”
    Synonyms: campaign, cause, crusade, drive, movement

    [noun] a notable achievement; “he performed a great deed”; “the book was her finest effort”
    Synonyms: deed, feat, exploit
    (eLOOK. org)
    —–

    Many have paid work…do paid labour…but how much effort is exerted? In the case of GW Bush it seems very little.

    Furthermore, who is to say which forms of effort benefit society as a whole?…or produce necessary transformations?

    It’s quite possible that someone might be working to undermine social cohesion (how many benefit from pitting migrants against the citizenry?…some obviously)…

    Or their job/career might inadvertently be contributing to environmental degradation and consequently putting the lives of future generations at risk. Or our own.

    It seems some financiers, war profiteers & shelter sellers WORKED extremely hard at ripping off the general public and small shareholders. Maximum EFFORT has been applied by some conglomerates & monopolies to ensure there is no FAIR TRADE or VIABLE COMPETITION on their patch.

    As the economy collapses in some areas/sectors…these hard working con-artists & salesmen will be working hard to ensure they can pillage…& pick up bargains from the market basement…including the labour power of others.

    Whilst the masses argue about which generation exerts more effort…works harder.

    N’

  108. Reb: giving due regard yes indeed the oldies did work their arses off. Example, when have you ever had to grow vegies in your garden in order to feed the family rather than just a yuppy environmental thingy.

    When did you have to resole your children’s shoes.

    When did you have to turn the collars of your shirts. In case you don’t know what this means. You slice the collar from your shirt and then sew it around the other way so that the worn bit doesn’t show.

    Ah well..if the recession kicks in then I expect that the young’uns will soon learn what it is to have to tighten the belt.

    As I mentioned, my father was a factory hand and Jeff’s father drove the baker’s horse. Click in..horse. This is only t’other generation.

  109. Talking about difficult times, how are your hands Min?

  110. Thank you Huh for asking. Not too bad at all.

    Just for those who don’t know, I lost all the skin from both of my hands a couple of years ago due to severe ectopic dermatitis. I also have ulnar tunnel syndrome which is a bugger as it’s my left hand and I’m left-handed.

    But what they heck hey..I just count my blessings re family and friends.

  111. “Just for those who don’t know, I lost all the skin from both of my hands a couple of years ago due to severe ectopic dermatitis”

    Very sad Min. I think we cross-posted. I hope you get the gist of my post.
    N’

  112. N’..it’s not sad, it’s a challenge.

    Hubby has arrived home with ‘hungry eyes’.. aka I need feeding.

    Will be back in the morning as I have promised myself a day off to catch up with friends such as yourself.

    Tom..hugs. I think that we agree. Pensioners are hard done by.

    With apologies, have only had a chance to scan read, will be back in the early morning, wave wave to Aqua.

  113. Its not a gen thing its a “time” thing – service, standards and quality of products has nosedived in the last decade but that’s all gen workers…not just an era…

    Just back from work and reading over the thread. BTW TB I’d like to offer my sympathies for your ongoing medical/hospital problems of late. I know it’s not easy.

    Again, I view it differently TB, I see that service and standards have slipped because employers don’t put enough staff on for them to do their job properly, they expect one person to do the job of two people. It’s quite stressful to work like that.
    Product quality is reduced because business is always looking to cut costs.

    It’s not the fault of the workers that profits are placed before service delivery and customer satisfaction.

  114. “It’s not the fault of the workers that profits are placed before service delivery and customer satisfaction.”

    Unfortunately kittylitter it’s one of the side effects of companies offering shares…and top execs from said companies getting share-related bonuses.

    Tho I guess many would argue that the dividends help support SFR & others…and are linked importantly to Superannuation accounts…but I’m still wondering if it’s a great idea hooking those more essential companies (transport, energy, other utilities) into what is essentially a gambler’s paradise…tho more like paradise lost these days unless you have the moolah & bottom net dragging capabilities of a Soros or Buffet.

    N’

  115. Tho I guess many would argue that the dividends help support SFR & others…and are linked importantly to Superannuation accounts…

    So SFR’s shouldn’t be complaining about poor service and quality, because they reap the rewards?

  116. Some.

    I’m totally in support of increasing pensions & unemployment benefit kittylitter, pretty selfless methinks considering I have received no health care card or welfare or handouts…nor would I take it, as I feel my wife earns a fairly decent income as a teacher and plenty of others require help in these troubled times.

    But I also think that some so called SFRs who are similar to my parents-in-law (see comment above) are getting a raw deal.

    Considering the tax they’ve paid & how they skimped & saved. Certainly they were lucky not to have been hit by an illness that destroyed their income earning abilities…but others disadvantage shouldn’t mean they should have to miss out.

    This is not some top-end-of-town dynasty we’re talking about. It’s too easy to stereotype them. And Labor is in danger of a huge BACKLASH if it pisses their type off too much.

    IMO, If we force every low wage family who worked for yonks to accumulate some basic assets to sell off their homes and farms to live out the rest of their days we are ensuring that the middle class is weakened & the rich elite can own us outright…& our politicians.

    I’d love to see an egalitarian world…but my travels & experiences have shown me that is a “pipe dream”.

    But we can try.

    Tho we’ll get nowhere if the so called LEFT lose government.

    N’

  117. John McPhilbin, on February 17th, 2009 at 7:45 pm

    No, I don’t believe that I can give a simple example of complexity itself, and that was the point I was making: nor can Government(s) acting as buyer-seller agents operating in artificial marketplaces, because there’s a knowledge deficit at microeconomic levels that’s obscured by the ‘simplicity’ of big pictures.

  118. Legion, on February 19th, 2009 at 3:10 am Said:

    John McPhilbin, on February 17th, 2009 at 7:45 pm

    No, I don’t believe that I can give a simple example of complexity itself, and that was the point I was making: nor can Government(s) acting as buyer-seller agents operating in artificial marketplaces, because there’s a knowledge deficit at microeconomic levels that’s obscured by the ’simplicity’ of big pictures.”

    Now I get you Legion. I have to agree as well. Rarely is any initiative without consequences good and/or bad.

  119. Legion

    There is a system’s term for the phenomenon you refer to without having to go into perplexing explanations. It referred to as ‘dynamic complexity’ . I think the point you’ve been trying to make illustrates the ‘law of unintended consequences’ of what appears to be a linear process. It helps explain the often non-linearity of systems behaviour

    Modeling & Simulation
    http://www.systems-thinking.org/modsim/modsim.htm

  120. Yes, I was running comparative versions of the machine forward in time, both in terms of the complex componentry and their complex dynamic interactions, and suggesting that what is outside the reach of the new drip-lines and how those infusions flow around the circuitry, is what’s at risk; and represents the initial opportunity cost of one course of action over another, and when iterated and multiplied over time, the opportunities costs. I was going to leave it alone, because most seem happy with a one- or two-ply game analysis at best, but the specific mechanisms I described because I could, not to be intentionally perplexing.

    I am further suggesting that such a narrowly targeted stimulus will necessarily fail to stimulate much existing productive componentry in the ways needful for those components and circuits (where circuits are relationships of creditability of exchange, not the reified thing of nominal and illusory money some keep referring to as credit) to survive, and will travel paths which are nothing like the stochastics of many-agent decisions in the real economy emanating from diffuse sources of pre-aggregated demand.

    No doubt the stimulus package will succeed admirably for the artificial marketplace which it seeks to create, and seems politically popular, but running the machine forward it does very little for stimulating the real economy as it exists, imho, and might cost more in terms of lost componentry and future production in the medium-term.

    I don’t believe the calculations underpinning that choice and the assessment of risk to have been explained at all in official narratives, or there being even any indication that such a calculus was undertaken at all once the political imperative arose to show a paying public a bang for buck to hang their political narratives upon, as opposed to any less visible maintenance to circuitry in private hands.

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