Rudd's $42 billion 'nation building' plan (2 Viewers)

[Gerald10]

The stimulus package is aimed at stimulating what? Construction and retail???

Construction, well infrastructure would stimualte this sector...

But retail, who the hell stimulates retail consumption... This is idiotic, most of our products are produce internationally, and yet the economists sight the multiplier in confidence...

Okay so my perspective, direct spending into Australian economy will boost activity at the first instance, but as the money circulates the economy more will be lost in leakages...
Solution: Invest in R&D (targetted around universities and tafes (reskilling or extra skilling)) and investment in infrastructure. It won't stimualte the retail industry, but the retail industry won't stimuatle the economy.

Secondly whilst our banks are in good shape we still need to redesign our laws on private debt. We need to reduce debt-spending, i.e. money borrowed for consumption rather than investment as this will only damage our economy.

The multiplier works. Although many of the profits for products in retail go overseas heaps of money is still kept in. Most products in retail have a mark-up of 50% or greater - meaning a large portion of profits stay in Australia even if the products aren't made in Australia. That means people in retail stay in jobs which means they will continue to circulate money around the economy. Some will inevitably be lost in leakages but not before the economy is stimulated by about 250% of the injection.

Perhaps the money could be better directed but stimulating retail keeps millions and millions of people directly and indirectly in jobs.

 

[SashatheMan]

The stimulus package is aimed at stimulating what? Construction and retail???

Construction, well infrastructure would stimualte this sector...

But retail, who the hell stimulates retail consumption... This is idiotic, most of our products are produce internationally, and yet the economists sight the multiplier in confidence...

Okay so my perspective, direct spending into Australian economy will boost activity at the first instance, but as the money circulates the economy more will be lost in leakages...
Solution: Invest in R&D (targetted around universities and tafes (reskilling or extra skilling)) and investment in infrastructure. It won't stimualte the retail industry, but the retail industry won't stimuatle the economy.

Secondly whilst our banks are in good shape we still need to redesign our laws on private debt. We need to reduce debt-spending, i.e. money borrowed for consumption rather than investment as this will only damage our economy.

As you have stated though, the stimulus is already aimed at stimulating construction. If all the money went into one part of the economy wouldn't the other stagger? Wouldn't it be better to spread the money across different industies?
I still think they should extend the first home owners grant. I read recently that a lot of first buyers are flooding in to buy existing homes and build new ones.

 

[Lex152]

As you have stated though, the stimulus is already aimed at stimulating construction. If all the money went into one part of the economy wouldn't the other stagger? Wouldn't it be better to spread the money across different industies?
I still think they should extend the first home owners grant. I read recently that a lot of first buyers are flooding in to buy existing homes and build new ones.

Housing is a part of the most expsensive in the world...
We need to decouple the words investment and property, because the too rarely correlate and all we have is an inflated housing market... (a bubble in my opinion).

Other than resources what industry are we efficient in? We don't need to further stimualte primary production...
So I think we need to develop infrastructure (construction) and encourage diversification (through education).
Otherwise we are just backrolling consumerism, and consumption with government debt...

 

[krishanrodrigo]

This is unfair. There are so many international student here, and they dont get any money?