Right Pulse

The latest in the $85 billion Krudd spend-a-bloody-heap-of-other-people’s-money-to-fund-an-early-election. Unemployment rose to 4.8 per cent, a bad outcome but no where near as bad as in other developed economies and certainly not enough to justify a stimulus package in the order of 7 to 8 per cent of GDP.

…the ABS figures also showed total employment rose by 1200 in January, a much better result than market expectations for a fall of 18,000.

Former ALP NSW Treasurer Michael Costa has questioned the ability of State governments to spend too plan for Rudd.

…while the federal Government is counting on the states to deliver this extraordinary capital expenditure program, the state governments are undertaking record infrastructure spending of their own. NSW is budgeted to spend nearly $14 billion, Queensland $17 billion, Victoria nearly $4billion and Western Australia nearly $8 billion.

Speaking from bitter experience, if the states are able to complete even their own ambitious capital works programs on time and within budget, it will represent a dramatic departure from past practice.

From Michael Stutchbury writing in The Australian:

Most people have swallowed the line that Australia’s budget is in such great shape that it can readily afford to recycle $42 billion of taxpayers’ money into handouts and pet government projects — all towards the worthy goal of cushioning the recession and limiting the jobless toll.

The risk of higher taxes was raised by ANZ Bank chief economist Saul Eslake at the Senate committee inquiry into the Government’s $42billion stimulus package announced last week.

“It may well ultimately be true that servicing or repaying the debt incurred now will ultimately require higher taxes down the track,” warned Eslake who, incidentally, broadly supports the fiscal stimulus.