Monday, September 28, 2009

Shock, horror: Some of our stimulus money went overseas

Here's the front page of Sunday's Sydney Sun Herald:

$82m 'wasted' in stimulus splurge

IT WAS designed to stimulate the economy but more than $82 million of the first round of the Federal Government’s stimulus payments went to people living abroad. Centrelink has confirmed 68,812 people living overseas received as much as $1400 each – a total of $82.2 million. The figure is 1.7 per cent of the $4.8 billion the Government handed out to pensioners, self-funded retirees and some single parents in December last year.

Bill Mitchell at the Centre for Full Employment makes some sobering points:

$82 million noted above is about 0.14 of a percentage point of the total package. Headline news material for sure. Not.

Of interest to me was where this international leakage occurred. Apparently:
Italy received the lion’s share of the money with 16,846 people receiving $19.3 million. Greece was the second largest destination for Australian money with 6078 people receiving $7.2 million. New Zealand came third with 5684 people receiving a total of $6.9 million. A further 21 countries had just one person who received a payment, including Cuba, North Korea and Zimbabwe.

Italy and Greece were the first-large Post World War II sources of non-English speaking migrants who were brought here to “build the country”. These early arrivals in the 1950s and 1960s, laboured and constructed a significant amount of the valuable infrastructure that is still providing benefits to our nation. Without these workers the job shortages would have been significant.

The reality is that a lot of those early migrants who took out citizenship went back to their homelands in later life as the gap between the improving standard of living there and the declining standard of living here narrowed. They had done their service to this country however.

I'll make another point.

It was the world that was in trouble not just us. If our stimulus money slopped over the border to stimulate other economies, it wasn't wasted. Just as when other countries stimulus dollars slopped over the border to us, it wasn't wasted.

If every country had adopted a begger-my-neighbour policy and tried to stop any of its stimulus dollars going overseas - as the article implies every country should have - we never would have have got out of this as well as we have.

Just saying.

3 comments:

Rationalist said...

I suppose being a miser w.r.t our own personal stimulus is in some ways like protectionism. In all seriousness, we probably benefited more from foreign stimulus (China) than what we lost from our own.

Peter Martin said...

Boy are you right!

Anonymous said...

We'd be in deep recession without China's stimulus, esp. the flood of easy credit that poured into commodities speculation.

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