No taxes – No $900 Bonus!

Just to follow up on my blog about the Rudd Stimulus Package: The Age has reported that some people haven’t recieived the $900 amount even though they lodged a tax return of less than $100,000.

The article provides a few examples of people who aren’t receiving them and casts them in a sympathetic light. I don’t quite agree with the side The Age is representing here and this example proves why:

A Melbourne freelance documentary maker, Kerry, said she was shocked to discover she would not receive the bonus, which she has planned to pay towards her mortgage.

“I could claim on the documentary, which meant the small amount I did pay I got completely reimbursed,” she said. “So even though I’m a low income earner and my children both live at home and I was really depending on that $900, they are aged 19 and 20 so it’s just meant that I haven’t fallen into any of the eligibility areas. ”

“The fact that I’ve fallen through the cracks has absolutely destroyed me”

I can see why it may be unfair that they aren’t receiving the stimulus, but when they receive a large amount of tax deductions do they really need a $900 bonus as well? The use of words such as “shocked” and “destroyed” imply that Kerry is really suffering but the fact is she didn’t pay any tax so should she be eligible for the $900 that we have all paid for in our own taxes?

Published in: on May 11, 2009 at 6:56 am  Leave a Comment  

The 900 Dollar Answer


Kevin Rudd Photo: Bloomberg

Kevin Rudd Photo: Bloomberg

The big question on the media lips – has Kevin Rudd’s Stimulus Package been successful?


NSW Treasurer, Michael Costa, said the Rudd Stimulus, worth more than $50 million was a complete disaster  and has failed to create jobs. Costa said the Government had been confused and rushed into the decision in response to the economic crisis.

“The issue comes down to how many jobs did you save from that level of spending, and the cost-benefit of a stimulus becomes an issue,” he told Sky News on Monday. “It also means worthy projects that may well have positioned us for the recovery are not going to be there.

The Sydney Morning Herald reported on Costa’s announcement but did not appear to argue either side. However the article did report on Costa’s criticism against Rudd’s essay in the Monthly Magazine back in February. Rudd gives an analysis of the causes of the global financial crisis in the essay, and by linking Costa’s remarks on this with his criticism of the Stimulus package the SMH could be subtly making a criticism of their own.

I found an article in the Business Spectator quite interesting. The article argues that the increased Government involvement is having a negative affect on the economy and that the Governments “spending spree” is not a sufficient solution to our economic problems.

It is the supply side of the economy that matters most. And yet our current policies actually harm the productive capacity of our economy. The main consequences from current policies will be bigger government, less-efficient government, and more political risk. All of these things are a constraint on the supply-side of the economy.

The article gives evidence to this by reporting that the Commonwealth Government has increased it’s share in the economy from 22% to 28% and has added new layers of Government control. The article goes on to say that this affects our economy because the free market is more efficient than the bureaucracy.

The Heritage Foundation measures economic freedom (small government, free trade, private property, low regulation) and finds that it is correlated with prosperity, democracy, human development, and a clean environment. Countries classified as ‘free’ or ‘mostly free’ have a GDP/capita over $US30,000; while ‘moderately free’ countries have a GDP/capita of around $US15,000; and ‘unfree’ countries are around $US4,000 GDP/capita.

This is a very interesting take and does make one very valid point – economic growth comes from the private sector, not from the politicians and bureaucrats. So is the Stimulus package just another way the Government exerts it’s control on us? By throwing all this money into the economy other projects (such as construction and education) that require funding are likely to receive a lot less. Will this affect the efficiency of these projects?

Before the Stimulus Package went ahead The Age reported on the opposition towards the idea:

Nationals Senate leader Barnaby Joyce accused Prime Minister Kevin Rudd of applying a “pressure salesman trick” on the Australian people. “It’s not his money, it is the Australian people’s money, and there will be the due oversight that is expected of this,” he told reporters in Canberra.

While it has been nice to receive an extra $900 (I’ve actually received two), we cannot deny that it is in fact our own money! It’s good to see the media recognize this and not sensationalize the idea of a “free” payout.

The Australian has also reported on the failure of the Stimulus package saying that one of the reasons behind the payout was to increase Rudd’s popularity with the public in hope to be reelected next semester.

In recent weeks, as it has become clear that the impact of the fiscal stimulus was overstated, the Government has resorted to the feeble claim that things would have been worse without it. Its constant revision of its economic forecast makes it clear that whatever the impact of the fiscal stimulus, at the very least its structure was based on nothing more than guesswork.

The Australian also argues that the Australian public have seen right through the package and are critical of the Government vision as not one piece of national infrastructure has been produced. I tried to put my money back into the economy through retail and such, although there was no massive change in my expenditure and I know a lot of people who either saved the money, or being university students, spent it on alcohol!

So far all of these articles have critiqued the Stimulus package and haven’t looked the any positive arguments towards the issue. Although I do agree with their views I didn’t see any statistics on the unemployment rate and whether or not it has actually fallen, risen or remained stable. I did look at the March-April unemployment rate on a Government website and I could see that it has increased to 5.5% – one piece of evidence that the  Stimulus Package so far hasn’t been beneficial in that area. 

Published in: on May 11, 2009 at 6:39 am  Leave a Comment  

New power station provides 300 jobs in Wellington

The local economy is stoked as ERM Power has been given the approval to construct a $700 million gas-fired power station in Wellington. The announcement last week has given residents a well needed boost as the plant will provide over 300 jobs during construction and at least 10 permanent jobs once it has been completed.

ERM Power NSW director Andy Pittlik said the joint announcement between the company and the NSW Department of Planning could not have come at a better time.

“It is major projects like this that will help give the local economy a much-needed boost,” he said, ” We anticipate that the Wellington Power Station will contribute $100 million to the local economy during its construction.”

The Dubbo Daily Liberal reported that gas station would provide 5 percent of NSW’s power supply during peak periods, and would provide extra capacity for business development and growth. The news of the massive power plant has locals looking forward to new job opportunities; a sigh of relief in the tough economic times.

Published in: on March 23, 2009 at 10:20 am  Leave a Comment  

Job cutbacks at the Dubbo Council

The Dubbo city council has deicded to go ahead with plans to conduct a financial sustainability study of departments and projects within the local council. Dubbo newspaper, the Daily Liberal, reported that the study, which will begin in the new financial year, could result in job losses and project cutbacks within the council

The study – which a council spokeswoman said would “document the condition of council’s infrastructure and finances” – will examine the core business in each department, Councilor Richard Mutton said.

The report will list information on around 70 projects (namely parks and ovals) that were cancelled last year when the council’s request for a 4 per cent rate rise was knocked back by the State Government.

The council has confirmed that there won’t be another rate rise in 2009 which suggests the risk of more project cuttings this year is quite high. Consequently this could mean that a lot of council employees might find themselves without work this year.

Cr Richard Mutton said the study could result in job losses, or could see council simply not increase staff.

“I emphasise could, it could see cutbacks in some services and cutback in jobs,” he said. “It could also mean we don’t increase staff or use natural attrition to cut numbers.

I think many employees at the council would be worried by this news, which could be a bit premeditated at this stage but the media coverage will insure that the employees take extra effort to sustain their jobs. 

While Dubbo appears to be downsizing projects, Orange is boasting a giant surge in unit and duplex development. The Central Western Daily reported that:

In the past five years more than 200 duplex and unit developments have been built in the city, with newer areas the focus of builders and investors snapping up corner blocks as soon as they go on sale.

Real estate agent Libby Seamean suggested in an interview with the Central Western Daily that the reason for the increase in unit development was the demand for smaller apartment-style homes that suited first-home buyers and young professionals. With the economic recession underway this type of development would be more appealing and affordable for many.


Perhaps the Dubbo Council should follow Orange’s lead and focus on this type of residential development as opposed to expansion of parks and ovals. The media coverage would be a boost for Orange’s ego.


Published in: on March 17, 2009 at 12:48 pm  Leave a Comment