COMMENT:
$12.1 billion is a lot of money. It is four percent of GDP.
But that's the problem, if all you see is the number. And I am sad to say that is part of the political game that is being played. It is $12.1 billion because the Prime Minister made the error of saying it would be the biggest package she will ever produce. It's $12.1 billion to beat the $12 billion she borrowed for infrastructure, not because $12.1 billion is actually the number needed.
Of the money, a fantastically, obviously, fantastically, and alarmingly small amount is for health. Test, test, test is what the W.H.O said yesterday. We aren't, haven't been, and most likely never will. And we haven't because we don't have the kits, don't have the capacity, and the money from the package won't solve it.
The Winter Energy Payment is not a means tested, closely monitored piece of financial assistance. It's a cash splash, it's classic Labour economics, no efficiency with other people's money. It's wasted. It's not virus related, it's not job related, it's not recession related, it's simply money in your letterbox whether you need it or not.
The benefit increase is the worst of the lot. It is blatant politics of the worst sort. Beneficiaries are not affected economically by the virus. Their wages are safe, their job outlook and financial circumstances are untouched. For every dollar this costs, it's money not going to a wage subsidy, or an employer who needs help.
All it does does is make life easier for the person who loses their job. It's not efficient spending, it's unproductive, and a monumentally large, missed opportunity.
The rest of it, and the good news is there is more if and when needed. And one assumes the Budget will be as big as it needs to be, if it becomes rescue 2.0.
But in what we have, we can only guess right now whether it's enough. The wage subsidies, the tax treatments, they'll all merge in with the help from the banks, the stimulus from the Reserve Bank, and the announcements that are yet to come.
If you want a crude measure it's six out of ten. There is simply too much politics, and pork barrelling.
And the long term danger is around debt. This is clearly a government not afraid to borrow, and potentially to dangerous levels.
We're starting off in good shape, and even that's partially debatable. But it very quickly unravels if your penchant is to boost benefits and non means tested handouts. We aren't rich enough or big enough to do that.
The money had to be for the productive end of the economy, and too much of it isn't. It's an ideological fail.
On a day when much was anticipated, and even more was needed, too much went the wrong way.
