Keynesian Blunder Down Under

A slow day in DC, our man in Washington has been reduced to recycling Australian news on the failure of Rudd’s spending spree.

I actually gave my assessment of the plan back in 2010, and I even provided my highly sophisticated analysis at no charge.

The Treasury-commissioned report, by contrast, presumably wasn’t free. The taxpayers of Australia probably coughed up tens of thousands of dollars for the study.

But this is a rare case where they may benefit, at least if policy makers read the findings and draw the appropriate conclusions.

From his Australian source.

The former Labor government’s $100 billion stimulus package during the GFC has been slammed in a scathing new Treasury-commissioned report, which argues the cash splash actually weakened the economy and damaged local industry by overvaluing the exchange rate.
The report, authored by economist Tony Makin from Griffith University, says the Rudd government’s fiscal stimulus was “unnecessarily large” and “misconceived because it emphasised transfers, unproductive expenditure such as school halls and pink batts rather than tax relief and/or supply side reform”.

The latter occurred in New Zealand, where “marginal income tax rates were reduced, infrastructure was improved and the regulatory burden on business was lowered”.

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11 Responses to Keynesian Blunder Down Under

  1. closeapproximation

    It is scary that most Libs agreed with this, quibbling perhaps only around the margins on the magnitude of cash splash.

  2. RobK

    And we’re paying for it still.

  3. Oh come on

    Those BER school halls are everywhere – and so often they’re redundant. They’ll have a canteen section, even though there was another canteen area – but the canteen’s closed anyway so both areas are used for storage or some other wasteful purpose. I’ve seen a fair few schools that have *two* indoor/outdoor school halls – in these cases, one is a Howard-era structure (built around the time when they first became popular) and the other is a BER building. It’s pretty obvious that lots of schools, when presented with the limited timeframes and range of structures that could be funded with a BER grant, rationalised that they may as well get something out of this boondoggle – they might already have a perfectly good school hall built a few years prior but where’s the harm in having another?

    Of course, if you were a wealthy private school that could afford to put forward a really incredible proposal for something awesome, that could have got BER funding too. A private school I taught at built a colossal indoor mixed use sports hall big enough to fit a whole-of-school assembly, so ~1500pax capacity –
    all thanks to BER.

    Annual fee per student, between $15-25k, depending on year group. This school really needed the money. Thanks, Julia! And of course, construction commenced long after the crisis phase of the GFC ended. Thanks, Kevni!

  4. Roger

    It is scary that most Libs agreed with this, quibbling perhaps only around the margins on the magnitude of cash splash.


  5. Y

    Let’s not forget what BER stood for: “Building the Education Revolution”.

    Even by the standards of leftist spin, that is pretty incredible.

  6. Beachside

    Apologies in advance if this snippet has been posted earlier.

    From a poster over at Bolt
    1 hour ago

    Michael Photios’ wife Kristina is back with a new business with her husband and coal denier AGL is one of their first customers, how cosy they all are.

    From Margin Call in the Oz –

    Once again she’s a party member in Prime Minister Malcolm Turnbull’s seat of Wentworth.

    And demonstrating she wants to be a builder not a wrecker, Kristina — a former Macquarie Bank analyst and KPMG adviser — has also created a new group called “Conservatives for Conservation” to champion environmental causes within the Coalition.

    Kristina chairs the group, which we understand has secured the patronage of former Howard-era environment minister Robert Hill, former father-of-the-house Philip Ruddock, the Liberals’ first federal female president Chris McDiven and, perhaps most significantly, former NSW premier Nick Greiner, the party’s all-but-official president-elect who will replace the outgoing Richard Alston in a fortnight at the Liberals’ federal council.

    Almost-president-elect Greiner has long been a supporter of strong action on climate policy, saying just before the Abbott era began in 2009 that it was “nonsense” to behave as if it was a “left-wing con­spiracy”.

    Greiner has also been one of the most articulate supporters of the Turnbull government’s David Gonski-blessed school funding reforms, which he has called “a model of fairness and common sense”.

    Not only are Kristina and Michael Photios united in marriage and as Liberals.

    They are now both officially lobbyists, acting on behalf of a range of energy clients diverse enough to span most of the Alan Finkel-sketched future.

    Kristina is now working for Clean Energy Strategies, a new business founded in recent months by her husband and his business partners Nick Campbell and David Begg.

    The renewables-focused Clean Energy Strategies joins their portfolio of advisory and lobbying businesses PremierState and CapitalHill, and litigation communications firm Informatus.

    Andy Vesey’s energy shop AGL is Kristina’s first client.


    And now it all makes sense. Turnbull’s greatness ™ is Machiavellian

  7. Beachside

    Oops, wrong thread.

  8. Rafe Champion

    OK its important enough to post twice!

  9. val majkus

    … but, but, but … he said he was an economic conservative … and I seem to recall one newspaper nominating him for Australian of the Year … or am I misremembering?

  10. Beachside

    @ Rafe

    OK its important enough to post twice!

    Done! 😉

  11. cui bono

    Beachside – thus it’s very important the Phaction run the party.

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