THE ONLY THING DESERVING A "STIMULUS" IS EMPLOYMENT

The carrot: Give every employer an EMPLOYMENT TAX CREDIT proportional to the growth of its in-house workforce since a certain reference date. The proportionality constant would be in dollars per year per full-time-equivalent worker.

The stick: Allow the tax "credit" to be negative, so that downsizing the workforce after the reference date incurs a tax penalty.

The anti-rorting provisions: The "reference date" must be BEFORE the policy is announced, so that employers can't get a tax advantage by sacking people before the reference date and re-hiring them after it. Employers that materialize after the reference date must be subject to separate rules; they cannot be treated as if they had a workforce of zero at the reference date, because that would invite old employers to find ways to disappear and reappear.

The concession to hard times: Give employers an unconditional tax cut if you wish, but be sure to apply the above carrot and stick in addition thereto. In those circumstances, an unconditional tax cut is affordable because the carrot and stick would expand the economy and hence the tax base -- not so much the corporate income-tax base, against which the proposed tax credit would be given, but certainly the personal and consumption tax bases.

Note that the employment tax credit by itself is revenue-neutral: if employers keep the same workforce, they pay the same tax.

Would the restoration of full employment by the above method be inflationary? On the contrary, the tax credit would reduce the marginal cost of hiring additional labour, hence the marginal cost of the associated additional production, hence the market price of that production. This anti-inflationary effect means that the tax credit would reduce not only the ACTUAL rate of unemployment, but also the "natural" rate -- that is, the minimum unemployment rate consistent with stable inflation.

As the old saying goes, 'you aint seen nothin yet'.

Just wait and see what happens if the new IR laws are passed in thier present draft state, or similar and come into force.

It will be like a plauge. Only trouble is, the labor government will blame it all on the global ecconomic crisis. They have already started down this path.

The one result of work choices is that full time employment increased, as the risk of hiring full time employees dropped.

When the new IR laws are instituted, the pressure will be to re casualise these jobs.

These laws can wait until we can afford them again.

It is no coincidence that our country boomed around 2000-2003, as it was about the time that the coalision gained the support needed to water-down unfair dismisal laws and reduce union intervention within many workplaces, before then small to medium businesses were hesident to expand or employ.

It is also interesting to note that in less than 18 months of labor, we are now facing the threat of a re-introduced unfair dismisal laws and over the top union intervention that, if implimented, will hurt. In fact it has already sent shivers down the spins of many small and medium businesses.

Having been in small business from 1989, I can tell you first hand that these new IR laws, if not seriously amended, will end your life style as you know it.

And you can put me on the record for saying that.

The main problem associated with unfair dismissal is the the slowest workers is allowed to set the pace as they can not be sacked. The better workers, who can't be paid more simply says, "well, why should I work hard when they get paid the same"

Please don't say you have not been warned!

At the time of Paul Keating’s’ “the recession we had to have”, unemployment was 10.7%, interest rates were 17.5%, 22.3% on credit cards and the national debt was $94Billion. We may well end up with similar statistics by the end of 2009 but we are still a long way from that.

The government has a “get out of gaol free card” on all its policies. I don’t see how we can measure the unemployment effects of ETS, IR or Stimulus policy against the global credit crunch?

The government makes me very nervous; we signed Kyoto before we had an ETS that could define the costs, Doh! We know the projected revenue for government will be $10.4 Billion in year one. That is a cost to industry of $10.4 billion, so how many jobs is that?

We know that the unfair dismissal laws resulted in 150,000 full time jobs being created, therefore, if reinstated we can predict at least the same number of full time job losses. Doh!

The government stimulus package is targeted at cushioning job losses and is modeled on the US and UK packages. Their economic situation is vastly different to that of Australia by any measure. So is the government cushioning the job losses it is about to create or those imposed by the global situation? If it is the latter, how can we measure the effectiveness of government policy? The answer is probably, we can’t, and that makes me nervous