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HomeJune 2015 Issue 105

GOVERNMENTS NEED TO SPEND UP BIG TIME

Tim Benson

Governments don’t go broke (not even Greece …). Governments are not businesses (they are supposed to be democratic). They are more than about the bottom line and profitability. Governments do things that no business would ever consider doing … for example giving billions of dollars away and expecting nothing in return. So why do we get hung up about governments running deficits in lean economic times. Spend up I say, spend up big time. Pump money into the economy – grow the public sector, build infrastructure – grease the invisible hand – keep the engine room (small business) of the economy running and growing. I read somewhere recently that the best thing you can do for someone living in poverty is to give them money and lots of it. For example if we gave everyone living in abject poverty a lump sum of say $250,000 and said ‘off you go, do whatever you want with this’, many people would do constructive things like move away from poor areas, build a house, pay off debt, open a business, go to school, buy a flat screen TV, go on a holiday, go out to dinner – spend, spend, spend – and yes some would piss it up against the wall … but even this money makes its way into the economy and washes its way around the system. This would be better that consigning people to generations of poverty and building up industries to support them.

This brings me to the recent ACT Budget and the announcement of a $408 million budget deficit in a nearly $6 billion dollar economy. Not nearly enough in my book. The Australian Capital has been hit hard with nearly 10,000 job cuts to the Commonwealth Public Service and a $1 billion Mr Fluffy liability. Business needs a shot in the arm – so next year think big and invest even more.

Tim Benson, Publisher
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