Tuesday, October 14, 2008

Australia unveils A$10.4b stimulus plan

Australia unveils A$10.4b stimulus plan
http://www.businessday.co.nz/world/australia/4726977

The housing sector is a major beneficiary. The Government will triple to $21,000 the current $7,000 first-home buyers grant for people buying a newly constructed home. Those first-home buyers moving into existing properties will receive a doubling of the allowance to $14,000.
Why pick such an old-fashioned industry to subsidise. Back in the 90s I read an article about protectionism and the Australian motor industry. Apparently, the protectionism causes a dead-weight loss to the economy of $250,000 per job in the industry. That’s why Australians drive dinosaurs like Falcon & Commodore…

How about every Australian be given a transferable voucher worth $500, to be spent on computers, software or broadband sign-up costs? And another worth $300 to spend on Australian software?
Transferable so those who already have a computer, or don’t want one, can sell it (at a discount maybe) in order to buy other stuff. And the voucher should have a short expiry, like maybe 3 months, to encourage it to be used quickly. Or, or, or.

Or why not just cut taxes to a flat 23%...

Nah, too fucking simple.

(Why is the Aussie gummint trying to stimulate the "real" Australian economy when the effects of the financial crisis on the "real" economy are uncertain, if any?)

1 comment:

Mark Wadsworth said...

Cool.

I'm doing running updates on my blog about the crazy measures the UK gummint is taking to prop up house prices. They aren't quite as blatant as a straight cash payment to people to persuade them to buy into a falling market, though!