As Fred Argy reports, the Government is still toying with the disastrous policy of going with the Hollowmen’s fiscal strategy in a recession – which is to obfuscate about whether or not you’ll run a deficit until you can’t obfuscate any more at which time you go (shamefacedly) into deficit and then reassure the public that you’re doing everything you can to fight the slowdown, that you’ve had a ‘stimulus package’ or two to that end, but that they’re not very big and you’re trying to minimise the deficit as well. Those Hollowmen never did like anything that was too unambiguous or consistent.
Yes folks, we’ve been there in the 1930s (most of us not personally) and again in the early 1990s when Paul Keating told us he was changing course and winked to officials at celebratory drinks on the night his ill-titled ‘One Nation’ statement first saw the light of day “What’s a half a percent of GDP amongst friends”. What indeed.
Anyway, we’ll see how things unfold.
Meanwhile it is an interesting thing to ask what might be done to fight the recession that wouldn’t hurt the budget bottom line. I can think of one thing that would help it, and would stimulate the economy.
Allow people early access to their super. They can currently access them early only on showing extreme hardship. One might want to hedge this in with conditions. Such as ‘not too much’ (eg you can elect to only contribute 5% to your super for the next year) or ‘only if you agree to increase payments above 9% in a year or two’s time’. One might want to avoid people accessing any lump sum from their super to go on an overseas holiday – which really wouldn’t do us much good (though I’m not sure how you do it without an attack of the political nasties). But one might allow them to access their super to fund a deposit on their first home – especially if it was newly built.
Any other ideas?