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Unemployment to double?

By johnboy - 19 January 2009 53

Idiot media are busy talking us all into a serious economic downturn. The local ABC is joining in warning that unemployment in the ACT is set to “Double” (Terrifying!).

Coming off a base so low that job creation has become a negative when developments are assessed this actually means a rise to a still very low 5.4% sometime next year.

But seeing has how Chris Richardson and Access Economics might as well be throwing darts at a board to make their predictions I wouldn’t worry too much about that either.

What’s Your opinion?


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53 Responses to
Unemployment to double?
Ian 1:33 pm 19 Jan 09

You watch, as unemployment rises all the politicians blame it on the global economic crisis, but when it falls again, it will all be due to their personal efforts.

VYBerlinaV8_the_one_ 1:22 pm 19 Jan 09

My idea of tax is:
1) Flat tax rate for all humans and legal entities (eg companies).
2) Humans get a tax free threshold, legal entities don’t. Adjust the tax free threshold to suit.
3) Adopt the US model of allowing capital gains taxes to be deferred if the proceeds of sale of an asset are used for further investment.

neanderthalsis 1:06 pm 19 Jan 09

I’m a big fan of tax simplification.
my dream world:
Tax free theshold: $15 000
2 bands, 15% & 30%
Apply the same for corporate tax.

Cut Capital Gains tax as it is a major constraint on investment

chrispy 1:06 pm 19 Jan 09

5 Stages of Grief
Denial:
It’s different in Australia, we are isolated from the world because of [insert reason].
Anger:
Stop talking about a recession you bloody idiot. It’s all [insert polies name] fault.
Bargaining:
We should cut taxes and give handouts of wads of cash. That will fix everything.
Depression:
why bother with anything. The economy is stuffed.
Acceptance:
I can’t fight it, I may as well prepare for it.

Which stage are you in?

harvyk1 1:06 pm 19 Jan 09

This recession is more driven by the media than anything else. The scary thing is that there are enough people who blindly follow what the media says that it can affect the markets.

Canberra is a pretty safe place to work. We only have one major industry, and short of the rest of Australia deciding to no longer pay taxes, that industry has a future.

I’d be a little more worried in Sydney or Melbourne, but not in Canberra.

PM 1:01 pm 19 Jan 09

I like your thoughts jakez.

I’d suggest slashing the corporate tax rate to have it equal to the top income tax bracket. I’d also remove tax deductability and abolish tax returns. Then I’d abolish the ATO and provide a scheme to re-train accountants as they adapt to a world with no tax returns. After that, I’d have a look at how we’re going financially and we’d take it from there.

My view is that the Howard Govt’s biggest mistake was the first home builder/owner scheme. It didn’t want a recession, no matter how technical, so it propped up the building industry which was going through a correction post Olympics-boom. The small recession didn’t occur, but home prices and rentals went up, fueling inflation and ensuring much of the big rises in a person’s economic worth was on paper only.

tylersmayhem 12:58 pm 19 Jan 09

The answer:

Work harder, dress better, be consistent and deliver on what your job required. Be better than the guy next you you – ALL the time. When it comes to cuts, this will hopefully be to your benefit, and hey – you’re actually earning your dollars.

I know this is a off-the-cuff response and in many ways La La Land, but coming from a cut-throat contracting background, it’s this that had my contracts extended through the full timers redundancies and other contractors getting the boot.

jakez 12:48 pm 19 Jan 09

Giving $1000 to the unemployed and pensioners economically achieved bugger all except maybe a boom in pokies revenue.

A boom for drug dealers as well if someone I know is anything to go by.

I wouldn’t even know HOW to spend $1600 on drugs.

Re tax cuts: I love tax cuts more than anyone here most likely. My pet issue is taxation (god knows how that happened). The problem as mentioned above is that its hard to get tax cuts out into the economy quickly. For the purposes of attempting to shock stimulate the economy in a very short term timeframe, they don’t trickle through fast enough.

I think the Federal Government’s choices were politically motivated rather than economically motivated however I can see the general idea.

If you wanted to use tax cuts as a short term boost you could try what the US tried a few months before it all fell apart. They had a stimulus plan where every worker was cut a cheque of some amount (I forget what it was), which was basically an advance on a tax refund. What most people in the US didn’t realise was that it was more of a loan than an actual tax cut, however you could easily modify it so that it was a tax cut. There are administrative issues and costs I’m sure though.

In the medium and long term, a strong decrease in tax revenue coupled with the Government not wasting money on dubious programs. Public choice theory and politics being what they are though, it’s extremely difficult to get rid of programs once they have been initiated (the Howard Government’s big failing was it’s post 2000 profligacy in this regard).

Thumper 12:34 pm 19 Jan 09

Giving $1000 to the unemployed and pensioners economically achieved bugger all except maybe a boom in pokies revenue.

I recall recently reading something that poker machine revenue in QLD had gone up some $15M over December.

Your tax dollars at work.

verbalkint 12:32 pm 19 Jan 09

Families were the ones who got the cash! The pensioners got $2600 (which, given I know some people living on the single pension, went on things like chrissie presents and bills) and families got $1000 for having kids (though the rich parents didnt get anything as it was means tested).

So really, given the timing, most of the money would have gone into presents, plasmas or plastic (credit card payments) all of which either directly stimulate the economy or make future sitmulation possible (bigger gap between balance and credit card limit).

Tax cuts on the other hand only give you an extra $10 a week, so they take a fair bit longer to result in extra growth in the economy.

neanderthalsis 12:25 pm 19 Jan 09

johnboy said :

Wayne Swan needs stringing up for the way he’s mis-managed the messages on this one.

He doesn’t do much for confidence.

Living in total denial does little for economic confidence. He can’t seem to fathom that in order to steer the ship past the iceberg you need to acknowledge that the iceberg is actually there.

Giving $1000 to the unemployed and pensioners economically achieved bugger all except maybe a boom in pokies revenue. Broad tax cuts for businesses and the working population (or “working families” if you’re that way inclined) would do far more to encourage spending and stimulate growth.

VYBerlinaV8_the_one_ 12:15 pm 19 Jan 09

Media makes more money by selling fear than news. Look at the tone of our headlines these days. Of course it’s the end of the world! I would suggest that the ACT has the most stable employers in the country, given that it’s a govt town. Work hard and be sensible and you should be fine.

johnboy 12:08 pm 19 Jan 09

Wayne Swan needs stringing up for the way he’s mis-managed the messages on this one.

He doesn’t do much for confidence.

ant 12:06 pm 19 Jan 09

I have never seen a recession flagged so early in the process. Looking back to previous recessions, we were well and truly in them before the pundits sounded the alarm.

This one has had such a big lead-in, and with the commentators talking up the end of teh world while the numbers stil aren’t showing any sign of it is a new one. Wayne Swan was making sombre comments over the weekend, reported in The Australian.

p1 11:22 am 19 Jan 09
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