Source of information "The Australian", sorry fail; must try harder !!

AA said ‘Will Australians stick with the managers who took Australia from 12th-ranked to top of the world during the last downturn? Or switch to the Coalition whose proposed policies saw the nations which implemented them fare poorly?
The world will watch with interest’.

Well it looks increasingly likely that Australians will not settle for Labor. It looks increasingly likely that Aust’s do not rely on a set of numbers, which are quite meaningless for many Australians. It looks like that Austs do not approve of poor management of many important programs, divisiveness amongst Labor MPs, and so on.
So I expect the world will look on and say hey, those Austs are a savvy lot; they have an ability to look beyond data and know what really is going on with their pollies

Chris,

Do I recall you representing yourself as not being politically partisan?

Because, it's fairly obvious that you are.

"Austs" are anything but savvy - comfortable and accustomed to being led by the nose by media-driven populist policies election in, election out......

Alan, you wrote on Thursday, 22 August 2013 7:49:00 PM:

<< By the end of 2010 the Government had spent more than 10% of its 2007 GDP – a staggering $79.1 billion all up. $10.4 billion in October 2008 and another $4.7 billion to December 2008’s nation building package. A further $41.5 billion was allocated to infrastructure and jobs in February 2009 and, finally, $22.5 billion in the 2009 budget. >>

There are too many unknowns here. For example; how much would have been spent on infrastructure, jobs and ‘nation building’ just as a matter of normal government expenditure in the absence of the GFC scare?

One could argue that this sort of expenditure is exactly what the government should be doing anyway, within budgetary restraints.

So, how much of this expenditure was due to the GFC scare? How did this sit with the budgetary consequences – debt and foregone expense on other things, for example? And what was the real impact of this expenditure in terms of riding comfortably through the GFC?

I appreciate your comparisons with other countries. But ultimately it doesn’t answer these questions. So we really can’t say whether it was a good thing or not. And consequently we can’t applaud Rudd for his staggeringly enormous expenditure at that time…. if indeed it was staggeringly higher than what would have been spent anyway!

I simply don’t have a feeling either way for this stuff, other than to say that the 900-odd $ cheque sent out to all households seemed like a pretty ratty and highly inefficient way to stimulate the economy.

I will note one more thing – the maintenance of very high immigration in a time of economic uncertainty seemed foolish. An apparently greatly increased effort was put into creating jobs and building infrastructure, while at the same time we continued importing at a great rate people who needed jobs and demanded more infrastructure!

Poirot, I am not a partisan supporter of anyone.

I criticise and support individual policies on their merits.

But one has to make the right choice in 2013. for me, it cannot be Labor. It is not good enough, but who knows in the future

Hi again Ludwig,

Thanks for this further input.

Re: “how much would have been spent on infrastructure, jobs and ‘nation building’ just as a matter of normal government expenditure in the absence of the GFC scare?”

Good point. Some. But much less than 10% of GDP.

Re: “One could argue this sort of expenditure is exactly what the government should be doing anyway, within budgetary restraints.”

Correct. IMF forward estimates show Australia’s net debt reducing steadily from 12.7% of GDP this year to 5.6% in five years. Treasury now estimates unemployment rising to 6.25% next year.

A wiser plan would be borrowing more now while interest rates are low, keeping people employed and building much-needed infrastructure. Australia could increase its debt to six times current levels and still have lower debt than the USA, the UK, France, Belgium and Japan.

Doubling debt now would seem prudent.

This is one area where Australians will suffer as a direct result of self-interested Opposition and media hysteria.

Re: “how much of this expenditure was due to the GFC scare? How did this sit with the budgetary consequences – debt and foregone expense on other things, for example?”

Budgetary and other consequences were virtually all positive: low jobless, strong growth, low debt, increasing productivity, low interest rates, low inflation, strong currency and enhanced credit rating.

There’s scope for further borrowing for “foregone expense on other things”.

Re: “And what was the real impact of this expenditure in terms of riding comfortably through the GFC?”

That is precisely the point of the article, Ludwig. Australia alone spent 10% of its GDP on stimulus, did so swiftly, went first with a helicopter cash drop, then extremely well-targeted infrastructure spending, keeping tax levels steady.

Australia rocketed to the top of the world's economies, and continues moving ahead.

Second most aggressive nation with stimulus was Poland, though with lower spending, more slowly. Poland and Australia were the only OECD nations to avoid recession.

Canada, Mexico and South Korea came next in infrastructure investment. They also emerged from the GFC reasonably soundly.

The case is compelling, Ludwig.

Cheers,

AA