Still wondering if Tony Abbott and Co are right about the Rudd-Gillard Government stimulus packages?This might assist..........On ABC TV Q&A Opposition last night Leader Tony Abbott said this:Well, again, it's horses for courses and don't expect miracles. Now, if spending was the sure fire answer to any problem like this, why is it that the Americans are in recession? Why is it that the British have been in a recession, because their stimulus packages were roughly the same as ours and it didn't work? What got us through the global financial crisis was not fundamentally the stimulus package. It was fundamentally the strength of our economy and I've got to say that that owes far more to the reforms of previous governments, including the Hawke Keating Government, than it does to the spending spree of the current one. Yesterday John Quiggin also published this:An Open Letter
We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment. Unlike most OECD economies we have come out of the Global Financial Crisis and the subsequent world recession with only one quarter of negative GDP growth and a smaller increase in unemployment.
We note that during a recession automatic stabilizers (increase in total unemployment benefit payments and decreased tax revenues) lead to an increased government budget deficit. In almost all the OECD countries there has been a massive increase in unemployment and in budget deficits. In Australia both have been trivial by comparison.
The Government Fiscal Stimulus package that was introduced was carefully crafted and implemented in a clever sequence. The first stage, the payment of $900 to most households, helped to boost confidence in the retail industry.
The second stage of the stimulus package (the Building Education Revolution, and the First Home Owners Grant) boosted the construction industry and created thousands of new jobs. Besides the employment effect, it also provided a much needed increase in the stock of public capital (better and greener homes, better schools) and prevented a sudden fall in house prices.
The last stage of the fiscal stimulus package (as it takes time to prepare plans etc.) was the infrastructure program that increased employment as well as increasing the stock of public capital and helping to overcome the significant short fall in Australian public infrastructure, and hence would increase future productivity, taxable capacity and the ability to repay public debt.
Just as a major corporation goes into debt to invest in its stock of capital, so does a government. Just as many householders have a debt to a bank or mortgage company, so does a government. A government has a budget deficit and a government debt, but it also has capital assets (roads, ports, better equipped schools, Broadband, etc.).
The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.
We hope that the economic achievements of the Australian Labor Government will be recognized by the population.
Signed by:
P.N. (Raja) Junankar Emeritus Professor UWS, UNSW, and IZA
G. C. Harcourt Emeritus Professor UNSW and Jesus College, Cambridge
Peter Kriesler Associate Professor UNSW
John Nevile Emeritus Professor UNSW
George Argyrous Senior Lecturer University Of New South Wales
Harry Bloch Professor Curtin University
Tony Bryant Associate Professor Macquarie University
John Buchanan Director, Workplace Research Centre University of Sydney
Jerry Courvisanos Associate Professor University of Ballarat
Mamta B Chowdhury Senior Lecturer University of Western Sydney
Barrie Dyster Senior Lecturer University Of New South Wales
Corrado Di Guilmi Post Doctoral Research Fellow University of Technology
Geoff Dow Reader The University of Queensland
Steve Dowrick Professor Australian National University
Chris Evans Professor University Of New South Wales
Peter E. Earl Associate Professor University of Queensland
Craig Freedman Associate Professor Macquarie University
Giuseppe Fontana Professor of Monetary Economics LUBS - University of Leeds
James Farrell Senior Lecturer University of Western Sydney
Roy Green Dean, Faculty of Business University of Technology
Boyd Hunter Associate Professor/Senior Fellow The Australian National University
Joseph Halevi Senior Lecturer University of Sydney
Neil Hart Senior Lecturer University of Western Sydney
Sasha Holley PhD student University of Sydney
Michael Johnson Associate Professor University Of New South Wales
Steve Keen Associate Professor University of Western Sydney
Bill Lucarelli Senior Lecturer University of Western Sydney
Bruce Littleboy Senior Lecturer University of Queensland
Marc Lombard Senior Lecturer Macquarie University
Elisabetta Magnani Associate Professor University Of New South Wales
Fiona Martin Senior Lecturer University Of New South Wales
Girijasankar Mallik Senior Lecturer University of Western Sydney
Robert Marks Visiting Professor University Of New South Wales
Stephane Mahuteau Senior Lecturer Macquarie University
Eddie Oczkowski Professor Charles Sturt University
Brian Pinkstone Associate Professor University of Western Sydney
John Quiggin Australian Research Council Federation Fellow, University of Queensland
B. Bhaskara (Bill) Rao Professor University of Western Sydney
Colin Richardson Visiting Professor of Economics Imperial College, London
Tim Robinson Professor University of Technology
Frank Stilwell Professor of Political Economy University of Sydney
Ingrid Schraner Senior Lecturer University of Western Sydney
Michael Schneider Honorary Fellow. La Trobe University
Ruhul Salim Associate Professor Curtin University
Chris Terry Associate Professor University of Technology
David Throsby Professor of Economics Macquarie University
Tim Thornton Associate Lecturer La Trobe
Phillip Toner Senior Research Fellow University of Western Sydney
Roger Tonkin Lecturer Macquarie University
Sean Turnell Senior Lecturer Macquarie University
Michael White Senior Lecturer Monash university
Other Signatories
James Arvanitakis Lecturer, Centre for Cultural Research University of Western SydneyNixon Apple Industry and Economic Advisor Australian Manufacturing Workers Union
Grant Belchamber Economist ACTU
Ross Buckley Professor of International Finance Law University Of New South Wales
Brad Crofts National Economist Australian Workers' Union
Rajinder Cullinan Client Services Accountant University Of New South Wales
Sandra Egger Associate Professor Faculty of Law, University of New South Wales
Rolf Gerritsen Professor, School for Social Policy and Research Charles Darwin University
Alan Morris Senior Lecturer University Of New South Wales
George McFarlane Retired Consultant, Sanders & Associates Pty Ltd
Gillian Moon Senior Lecturer University Of New South Wales
John Milfull Emeritus Professor University Of New South Wales
J. F. Pixley Senior Research Fellow Macquarie University
Ben Spies-Butcher Lecturer Macquarie University
Peter Sheldon Associate Professor University Of New South Wales
