In short, probably not.
The argument, raised on ABC’s Q&A program on Monday night, is that gay marriage will cause a boost to economic growth from all the weddings that will occur. An article in the Fairfax press raised the same argument and even the Small Business Minister, Bruce Billson, appears to have hopped on the bandwagon.
It is wrong. It is basically magic pudding economics; those running this line don’t understand how the economy works.
In short, what they miss is that the money for gay weddings doesn’t come out of thin air: it comes from somewhere else in the economy. In order to spend money on a wedding, the money comes either from reduced spending elsewhere, or from reduced saving.
Obviously, spending on a wedding that is offset by reduced spending elsewhere doesn’t provide an economic stimulus.
The other option is that wedding spending comes from reductions in saving. But again, the money saved by one person is the money borrowed and spent by another person. Pretty much every dollar* saved goes to spending and investment by someone else. And pretty much every dollar* withdrawn from saving to spend on a wedding is a dollar less for consumption or investment by someone else.
A more subtle part of the argument is that spending on an Australian wedding will come from spending that would otherwise go overseas. But again dollars don’t disappear when someone buys from offshore. Every time someone converts an Australian dollar to a US dollar (say), another person converts from a US dollar to an Australian: the total amount of Australian money remains unchanged, and the amount available for saving or spending in Australia remains unchanged.
And all of these arguments work in reverse for the money allegedly lost because Australia won’t permit gay marriage. The spending isn’t ‘lost’ to Australia: it just appears elsewhere in the economy.
Basically, gay weddings do not create money; and their absence does not destroy money. People arguing for gay weddings should be looking elsewhere for their justification. One possibility is that gay weddings improve our overall economic wellbeing, but that is a completely different argument, much harder to empirically support or dismiss.
We may not expect sound economic arguments from the ABC and Fairfax media, but we should expect more of a Federal Minister.
*for pedants, please let’s not get into a debate about banking reserves: this would have a tiny impact on this argument.