How many plasma TVs does one country really need?

Shane From Melbourne says:

07:01am | 23/09/09

Debt in itself is not totally bad as long as the stimulus was applied to physical infrastructure instead of handouts, subsidies and middle class welfare. The major problem is that the price of oil tends to act as a self limiting input into national economies, in times of global recession it acts as a low inflation input, in times of global growth it acts as a high inflationary input. By the way, could Barnaby Joyce cite his reference for his assertion that in the private sector can spend a dollar and get a dollar’s value (let alone debate the dollar value of a “public good” versus a “private good”) The private sector can be as every bit ineffecient as the public sector especially when you’re dealing with monopolies, cartels and arbitrages. The banking and telecommunications sectors come to mind…..

AMJ says:

07:11am | 23/09/09

Great piece Mr Joyce.
I have often wondered why so much money was spent on so little, why we have nothing to show for it except for vague statements that unemployment would have been higher without the stimulus.
Of course how much higher is entirely impossible to accurately say and so the actual cost per job saved will never be known.
We have spent all of this money and the Murray Darling and Lower Lakes are still dying, the gap between indigenous and non-indigenous is widening, our health system is in need of major overhaul and investment in renewable energy is still not where it should be.
I’m no economist but surely these are the problems which we should have spent money on. And now, as you point out, they will have to wait until we have payed off this debt.
Not happy Kev.

John A Neve says:

07:29am | 23/09/09

I don’t often agree with Barnaby, but I do on this issue. I will not believe that we can buy our way out of trouble with more debt !! I makes no sense. Regarding infrastructure, we should never have had tax cuts under Howard.
Infrastructure should have been improved back then. Failing that, we could have had a bigger surplus.
Our real problem, is that both major parties think more about re-election than they do about long term gains for our country.

Taylor Corry says:

07:52am | 23/09/09

Well, this is a nice change from Joyce’s usual habit of wasting time (and taxpayer dollars) scrambling for a media close up. However, he predictably ignores the benefits the stimlus package delivered to his constituents who were struggling to pay bills, make mortgage repayments, pay skyrocketing rental rates…. I consider it a little rash to presume every recipient rushed out to buy a plasma television. Indeed, it is easy to make judgements when sitting from a position which allows you to cover every incidental with taxpayer dollars while allocating your wife a plush position in your electorate office to the tune of $60,000. The hypocrisy is delicious, the consummate fat cat who no doubt flies business class on every leg and spends taxpayer dollars like water criticising the government’s allocation of public money to the public. God help us if the National Party escapes extinction.

Gibbot says:

08:46am | 23/09/09

You’re right, Mr Joyce. We should have followed your plan to stave off the worst effects of the GFC.

Oh. That’s right. You never had one.

Matt H says:

09:29am | 23/09/09

Barnaby ignores the fact that this was a macroeconomic strategy with a microeconomic impact.
By allocating the stimulus to consumers (through the payments) and tradesmen (through the schools package), the Government has ensured that the stimulus has a much broader effect than the so-called “nation-building” efforts that the nostalgic Nationals want.
Sure, we could have built another Sydney Harbour Bridge, or another Snowy scheme, but all that would have happened is that Wal King and the Leightons’ shareholders would have got richer, and all the tradesmen and plasma TV salesmen in Roma and St George (are you listening Barnaby) would still be struggling - or broke.

andrew says:

09:54am | 23/09/09

“While the private sector can spend a dollar and get a dollar’s value”.  Sure, the private sector never wastes a cent.  You’re a joke without an idea, who represents a party of agrarian solialists and rails about government spending - spare us - go back to what you do best and keep on destroying the coalition from within.

Daniel says:

11:08am | 23/09/09

Barnaby why are you worried about plasma TV? It was your former leader John Howard that created the air of rampant individualism and the attitude of “If it doesn’t affect me Im not worried” ideals that Australia is now saddled with. You cant throw stones from glass houses. What is it with these conservative nutters?

Buddha says:

11:43am | 23/09/09

matt H, Barnaby’s point about spending on infrastructure was not about building another Harbour Bridge or another Snowy River scheme. “Infrastructure” isn’t another word for “really big project”, it’s about building something that will either have a future return or reduce the costs of doing business for a sector. For instance, building ports would (a) keep a lot of people in work, from the people supplying raw materials to the people who actually build it, and (b) at the end of it you have increased your capacity to export when the economy is on the upswing again.

But your only concern is “won’t someone think of the plasma TV salesmen!” Glad you’re nowhere near anything that counts, Matt.

S says:

11:45am | 23/09/09

Sen. Joyce, I am honestly interested as to whether you really, truly hand-on-your-heart believe what you’ve written here, or whether this is political posturing. If the latter, then I understand entirely - the cut and thrust of politics demands that we occasionally forsake robust policy for political pointscoring, otherwise no-one would ever win government and thereby be able to implement all their other, no doubt well reasoned, strategies. The public is not so naive as to be horrified by a poltician writing something for the sake of political expediency.

If the former, however, we are in real trouble. The ‘plasma and pokies’ mantra has been a stalwart of the coalition since the idea of a stimulus pacakage was first mooted. (Let’s not dwell for too long on the not-so-subtle implication of this arguement; that the Coalition thinks all voters are mouth-breathing poltroons who, given any spare cash, will piss it up the wall immediately…) But, once again, it is completely devoid of any basis in reality. Senator, can you tell us, your constituents, what percentage of people who recieved their stimus package spent that money on a plasma TV? If you can’t, then can you explain why you think it’s appropriate to set government policy based on whimsical anecdotal vaugaries rather than evidence?

Pressing this point, Senator, you strike me as an intelligent man, capable of sophisticated non-partisan debate. Why then are you peddling an arguement relating to the stimulus package that you know to be false? The arguement that nothing can be recouped from the $900 stimulus payments is patently and absurdly false. Anyone with a passable understanding of high-school economics can explain that stimulus packages such as this increase consumer confidence, stimulate spending (which is then recouped as taxation) and keep people employed (thereby paying income tax, rather than receiving welfare benefits). For your arguement to have merit, Senator, you would need to demonstrate that the outlay of stimulus cost the country significantly more than its non-outlay would have, in terms of lost jobs, decreased consumer confidence, etc. The figures are all readily accessible from treasury, especially for one in your position, Senator, so why has this analysis not been conducted? Again, why are you willing to base policy on untested, unsourced assumptions rather than analysis of the objective, verifiable facts?

The Australian public pays - by its taxes - for you to have all the time and resources you could possibly need to access this information, and to use it in formulating sensible policy. Your apparent refusal to do so is a dereliction of your duty to your constituents, plain and simple.

Again, if this is political posturing, then the Australian people are politically savvy enough to ignore it, along with the turgid recitals of banal political guff we get from all sides of politics with depressing constancy. If it is a serious attempt at engaging in a policy debate, then it is woefully inadequate and we demand better. We know that you are capable of delivering better, Senator. In future, please do so.

MarK says:

12:01pm | 23/09/09

Pull your finger out Barney
So paying australian companies who employ australian workers, to build buildings in australia, out of mainly australian materials, Does nothing for the economy? Boom gates arent made in taiwan, pretty sure we’d have to fit them with local workers, and who knows wouldnt it be crazy if these boom gates reduced accidents at train intersections… obviously no benefit there either, Ceiling insulation well that obsiously installs itself, and its not like it reduces heating/cooling energy needs So no Benefit there.
Sure there is plenty of Waste, but theres no need to be a Drongo

Jeff Mueller says:

01:05pm | 23/09/09

Perhaps we should have built Cubbie Station another dam.

D says:

01:12pm | 23/09/09

S says: Well said and beautifully laid out. Now Mr Joyce you have something to build a policy from. My son and daughter work in retail and know that many of their staff were kept on because of that stimulus package. I, for one, was able to buy Christmas gifts and put some away to partly cover the rent increase, that almost brought me to my knees, until the pension increase arrives. I do not know anyone who bought a plasma TV or played the pokies, nor spent it on booze, so your coalition mantra is dead in the water to most voters. No wonder the nationals need to tie themselves to the Lieberals to feel they have a place in politics if this is the best you can do nine months after the first stimulus proved its worth to Australia.

Robin says:

01:12pm | 23/09/09

The majority of the stimulus was probably spent on wood chipping our forests and these products were sent to Asia so they could pack all these shiny gizmo’s in into cardboard cartons, which were then returned to us so we now have to have another stimulus package to dispose of them correctly

Adam says:

01:21pm | 23/09/09

S, that was awesome.

Susan says:

01:35pm | 23/09/09

Senator Joyce, I resent your party’s continued assertions that we all spent our money on tvs and imported goods. I for one spent my stimulus money on a long weekend trip to the Hunter Valley that I could not have otherwise afforded, supporting the Australian tourism industry and Australian winemakers. I know other people who used them for concert tickets to see Australian bands, to make minor upgrades to their homes, and some who used it to retire some credit card debt that was becoming prohibitively large.

For the record, I do not in fact know a single person who spent their stimulus money on a television of any variety, nor any sound systems, iPods or mobile phone. The Australian people are not as vapid and consumeristic as your side of politics would have us believe, and your failure to give us any credit is lowering our opinion of you.

Stephen says:

02:22pm | 23/09/09

S, that’s the best post I’ve ever read on here.  Beautifully communicated.  Wouldn’t it be great if the good Senator actually addressed some of your points and responded?  Not in the usual avoid the question, trot out my rehearsed reply to any question way, but by actually responing to what was asked.  My favourite part…..... “Senator, can you tell us, your constituents, what percentage of people who recieved their stimus package spent that money on a plasma TV? If you can’t, then can you explain why you think it’s appropriate to set government policy based on whimsical anecdotal vaugaries rather than evidence?”

If he was forced to answer those 2 questions directly (and honestly), what on earth could he say?  Apart from “No”, and “No”

Godzilla says:

02:28pm | 23/09/09

I don’t understand why people who live beyond their means should expect the government to tax successfuly individiuals more and hand money to them.

Jim says:

02:40pm | 23/09/09

Keep up the good work Barnaby, based on a number of these comments, documented increases in sales at Harvey Normans and short term overseas holidays were obviously financed by long term savings.

pete m says:

02:57pm | 23/09/09

The problem for S and his/her cheersquad is that economists who have stuidied the impact of the stimulus show it has had no net effect on spending / sales.  While you think you spent “extra”, the figures show all it really had an impact on was a slight reduction in the dent people were carrying.

Of far greater impact was the 4% reduction in interest rates and the halving of the oil price.  None of this a credit to Rudd.

Check the submissions to the Senate Inquiry into the stimulus.

We did not avoid a recession, and now have hundreds of billions of debt to repay without the increase to GDP to afford it.  Your children thank you, not!

iansand says:

03:07pm | 23/09/09

I refuse to vote for anyone who tries to scare me into voting for them.

andrew says:

03:24pm | 23/09/09

Pete M,  of course we avoided a recession.  You reckon un-named economists deny the stimulus was relevant - how about telling us who they actually were?  Alternatively, you could read the budget papers and the OECD report and try to imagine how the economy would have looked with an extra 200,000 people without the jobs the stimulus maintained.

Grumbles says:

03:50pm | 23/09/09

Seems a lot of commenters here missed the entire point of the article to take offence at the suggestion that they spent their free stimulus money frivolously. The point really is not how you spent the money, but that it wasn’t free, it now needs to be payed back. The Senator rightly points out that regardless of how you spent your handout, Australia has not really benefited in a way that will make it easier for us to repay our debt. We have nothing to show for it but a big red number and the real pain from the downturn will be felt as we try pay it back.

Don’t take offence that Sen. Joyce refers to Plasma TV’s if you retiled your roof instead or used the money to slowly cover rent increases or splurge on your Grandkids for Christmas, other than possibly keeping a really small % of the Australian Public in a job for a relatively small period of time, we have not made Australia a richer or more productive place.

There’s no such thing as a free lunch…

Gibbot says:

04:06pm | 23/09/09

Grumbles: “Australia has not really benefited in a way that will make it easier for us to repay our debt.”

I can understand your point, but I don’t think that’s the case. Possum of Crikey recently posted a very informative article on uneployment that sheds a great deal of light on how the stimulus has aided our recovery.

It is much better to be in debt and gainfully employed (hence in a position to repay the debt) than bankrupt. I have no doubt that had the stimulus not happened we would be in a far less comfortable situation today.

Pete says:

04:16pm | 23/09/09

Having worked in infrastructure in private enterprise and in government - it’s government that tends to be the more efficient . Government projects are generally well managed and don’t seem to leak money the way private entreprise ones do. Overall costs for government project are often cheaper because there’s no back-handers.

As for spending - Senator Joyce is only upset it didn’t go on the never ending subsidies to the rural sector.

David C says:

04:45pm | 23/09/09

The stimulus seems to have had a brief effect on retail sales although those numbers have been negative the last 2 months. If you believe the stimulus saved 200,000 jobs then Im sorry I dont believe they were worth $125,000 each (based on a stimulus spend of 25 bio).

Grumbles says:

05:25pm | 23/09/09

Gibbot, I just read that post by Possum and while it is well written and thought out it is purely predictive. I would like to think that “best case senario” is what is going to happen but reality is that it will probably fall somewhere inbetween.

Don’t see my post as being a stab at the Government, the libs were not offering any better alternatives, rather see it from this perspective… We needed a stimulus, and spending money both creates and protects jobs, so we “needed a stimulus that would create and protect unemployment”.

If we had undertaken a large capital works program (or even a whole bunch of smaller ones) we would have created jobs in the same way, but at the end of the day had something, if need be, that we could sell to repay the debt. Even if we didn’t sell, the goal of capital works is to increase productivity, which would have left us in a better position to make repayments. I agree with Sen. Joyce when he says none of the spending increases our value, because better spending could have, but anyone can be right in hindsight.

MK says:

06:56pm | 23/09/09

The Government Vs Private Sector thing,  I dont know why some people think private sector is always more efficient, especially at project managemnt as its a big steaming pile of something you should be well aquainted with Barnaby,
You dont have to go far or examples of great private enterprised managment,
Un unamed mine in WA,which was doomed from the start) theres a good 3.4 Billion write off, Another Mine started off as a 500 million project, has blwon out to 3 Billion and its not going yet, although to be fair the inital estimate was a load of…... i know somone working on the construction of much publisized project, and said how great it was, was just like a goverment department, only with money to burn

Gibbot says:

07:13pm | 23/09/09

@Grumbles - I certainly get where you’re coming from. Believe it or not, before the cash splash my opinion was pretty much identical to yours - especially considering I work in infrastructure.

The reality is that an enormous amount has already been allocated to capital works, and there has been no shortage of work on offer. Times are a little tighter, as cowboys from the general construction sector are now throwing their hats in the ring for specialised projects that my company once had our pick of, but that has only served to force us to shrug off some complacency and become leaner and more efficient. Our share price is now over 20% higher than where it peaked before the collapse, so I can’t say we have cause for complaint. As an aside, while many talk of the ‘myth’ of green jobs, many new works are geared toward cleaner, more renewable processes. Some of the biggest ‘greenies’ I know are in our engineering department - smart people that see this as an exciting and challenging time to be an engineer of any discipline (except maybe audio).

In hindsight I now believe that the cash splash had the immediate effect of slowing unemployment and allaying panic - especially in the small business sector. Industry responded sensibly on the whole by reducing hours where necessary as opposed to slashing jobs. Had this gone unchecked it would have had a snowball effect and greatly protracted the recovery process.

I agree with you that Possum’s article was purely predictive, and that it is unlikely we’ll see the ‘best case’ scenario. What struck me is that had we done nothing we would have almost undoubtedly seen the ‘worst case’ scenario. It also puts paid to the ridiculous notion that X dollars to save Y jobs = X/Y per job. That kind of argument is either incredibly simplistic or inexcusably dishonest.

Krisso says:

07:26pm | 23/09/09

Can I have just one please. Apparently we are the only family on our street who doesn’t have even one plasma. So my 6 year old tells me.

Geri says:

10:21am | 24/09/09

FOUR.  One for the Lounge room, bedroom, games room and on the varendah with the BBQ

observa says:

11:02am | 24/09/09

“The economy factors in a premium when dealing with the Government because they believe the Government is not as aware and adroit in its capacity to negotiate tight deals in the commercial market place.”
No. You factor in a premium dealing with Govt because you know you’ll get stuffed around something shocking whenever you enter the tendering process with them. Try it some day with a simple carport or verandah with the committee of the local sporting club, kindy, or the like. So many eggsperts, so few decision-makers.

D says:

11:47am | 24/09/09

If the building was all done in one place the jobs would be all in one place. The way the stimulus was done meant it spread keeping jobs is out across the country, is the money those still in employment spend. A huge project in NSW might be good for NSW workers, and a few suppliers but does nothing for the resat of Australia. This is a time when we must forget state boundaries and think of Australia as a whole.

Lee Mazengarb says:

12:44pm | 24/09/09

Hmm, need another $900 stimulus package to pensioners again please. Oh and for the sake of fairness to low and middle income earners as well.
I still dont have a plasma or LCD…:(
But on a side note, all those retail overseas made products have to be restocked by the manufacturer right…and we are a resourse exporter supplying these overseas companies…ok its not even 10% efficient…
but for anything that had labour input in Australia it works a treat..
Maybe government could do more grants to business’s wanting to startup manufacturing things in Aus??? Not for big business but small??
I’m very sure we can manufacture some things easily within competative prices. Only some things though seem feasable.

Vicki PS says:

08:32pm | 24/09/09

“While the private sector can spend a dollar and get a dollar’s value, the Government spends a dollar and will lose 20 per cent because of bureaucracy”.  Perhaps I am economically naive, but how much of that private sector dollar goes to obscenely inflated executive salaries and bloated multi-million $ bonuses?  Scratch the surface of pretty nearly any private sector organisation and you’ll find a bureaucracy, contrary to the ill-informed belief of people like Joyce.