The $7500 question….

On the weekend, I did some sums. I added up all of the Federal Government’s current and promised commitments to keep the economy going and to relieve the suffering of the un and under employed during the current crisis, and then divided it by the population of Australia.

It comes to about $7500 which is going to be spent on average for every person, adult or child, in this country.

That is a lot of money, and we are in the situation where much more is going to be needed after the crisis passes, as right now, businesses are shutting and the only stable employment is in the medical profession or a supermarket. People are not going to be out there spending their cash in restaurants, or bars, or clothing boutiques, or dog grooming businesses.

They are going to be stocking up on tins, toilet paper, hand sanitisers, and other bunkering down type commodities. The velocity of money is going to really slow down. To speed up it again, after this blasted pandemic has lifted, will require more government spending, probably in the form of a large cash gift to every person to go out there and splash cash around, just like Rudd and Swan did during the GFC.

In the meantime, who is going to pay for all this? We are, eventually. Money spent on trying to keep the country going in this way is going to require either larger debt, which will lead to inflation, or larger taxes, or cuts to government services. This time, it might be worth it. Last time, when Rudd proudly claimed to be a Keynesian, creating lots of jobs for Irish backpackers to install insulation bats and solar panels and to build unnecessary second school halls on school ovals, it was not worth it.

Published by Ernest Zanatta

Narrow minded Italian Catholic Conservative Peasant from Footscray.

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4 Comments

  1. Sometime ago, I looked up the definition of pensioner and was not able to find the word “poor” in it.

    While empathic to those already on Newstart/Job search allowance getting some additional financial support because the allowance is extremely low to start with, I do not understand why the aged pensioners were given a one off payment on 1 April 2020.

    This group of society is lucky in some respects as they already have a guaranteed income from the government. How is giving them a one off payment going to contribute to the economy or assist those in more desperate need – the ten’s of thousands who have been stood down. I can only guess this has something to do with pensioners having the ability to earn a small amount of money outside the pension and as a consequence of CO VOD 19 have now lost their jobs.

    Sadly, like the Rudd handout (which I received at the time but did wonder why it was being paid to people who in the scheme of things were relatively comfortable) has brought out mindless behaviour in some individuals – namely the chap who gloated in the media yesterday that he had used all the money to buy VB which should last him about eight days. A potential alcoholic, it appears the government has fed his habit and potentially put other members of society in harms way as well as himself.

    Of course, some capitalists would suggest buying VB was a good move from a keeping jobs perspective. All good and fine if it wasn’t for the disturbing news that a foreign entity is wanting to buy it. Guess who?

    Liked by 1 person

    1. VB is part of CUB, which used to be part of Fosters Group, which was Australian owned and ASX listed. In late 2011, Fosters was taken over by SAB Miller (I voted against that at the EGM, but I was in a microscopic minority of shareholders). I believe that Carlton United Breweries has since been bought by Asahi, the Japanese beer giant, who are rivals to Kirin, the other Japanese beer giant who owns the beers which used to be part of Lion Nathan (ie Tooheys, James Squire, Little Creatures etc).

      Right now, if you want to drink Australian owned beer, aside from some micro breweries, you need to buy Coopers. Just about everything else is now long since foreign owned, and the micro breweries are gradually being snapped up too.

      Just as well that I am mainly a wine drinker, and that most Australian wineries are still Australian owned.

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      1. I shall point out to Mark that he needs to give the VB the flick and more to Coopers. Not sure how that will be received.

        A good Australian winery that does free home delivery is Gapstead in the King Valley. We regularly order from them when that have their promos.

        Recent one is not much of a good deal, but previous ones have been. One to keep on watch on.

        Liked by 1 person

      2. I like wines from that neck of the woods, but mostly I stick to the Rutherglen reds.

        I no longer drink CUB product very often, mostly because of the foreign ownership but also because there are better beers out there now and who wants VB or Carlton draught anymore? This is 2020 not 1990

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