The point of Jobkeeper and other schemes was to get money out into the community, so giving people more money than the had previously got could have been helpful. However, what really happened was that people could see trouble coming and put it in the bank, or they chose to gamble with it on the stockmarket - record numbers of trading accounts were created in the first few months.
Then we get ideas about building a gas fired power station - a few hundred jobs while it is built, and probably less than a hundred to operate it. But all those jobs in a single area.
And now they are talking about tax cuts. The main beneficiaries are the rich who already buy what they want when they want, so the saved money will be banked. and all of that 12 months own the track when they do their tax return.
This is on top of the early measure of accelerated depreciation for businesses buying assets. This fails for two reasons. Firstly, going into a pandemic, businesses are going to need all the cash they can get to survive, so why would they be spending it on assets. Look how many had to resort to capital raisings. Secondly, the benefit comes after the business submits its tax return, maybe a year away.
What is needed is to spend money NOW in as many areas as possible. Rudd's school halls and insulation schemes did exactly that. None of the things one this time have.
The current government seems unable to understand basic economics and is unable to escape their ideology. They will carry the can for the state of the economy.
RFX Price at posting:
3.1¢ Sentiment: Hold Disclosure: Held
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