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
Filed under: Australian Economy |