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Archive for September, 2009

Dr Richard Denniss a voice of reason

Posted by cegan on September 22, 2009

Oh, I suggest all my international friends will suggest how pathetic Australia is when I explain the situation developing within Australia. Are you for stimulus or against stimulus? Should we be in 42 billion dollars debt or allow the markets to decide? Should we wind back stimulus? Will the stimulus raise interest rates and mean higher taxes in years to come?

The senate standing commitee on Monday has had economists outline the problems with the stimulus package which next week will interogate the Reserve Bank . The Liberals are obcessed with interest rates. Labor continue to suggest the stimulus is the best thing a government could have done.

I agree, so does Nicholas Sarkozy, Anke Merkel and Barrack Obama. Yet the Australian Liberal party in the doctrine of conservatism are worried about interest rates and higher taxes. There is hope, Dr Richard Denniss an economist from the independent think tank Australian Institute looked at unemployment being the key indicator that is far more important than interest rates. This was ignored by the Liberals, callous and conservative approach that doesn’t look at the human cost of a recession. More so the costs for middle class Australians – the political powerbase of this country.

Dr Richard Denniss examined the stimulus package and suggested that the real issue that he had was the lack of unemployment benefits. He declared that the best way to stimulate the economy was to improve unemployment benefits and to have delivered the $900 cash payment to the unemployed. This was music to my ears and was a view I sprouted to many when I was discussing the stimulus payment. When people disagreed with it, i said I thought it could have been targeted more. As economists will tell you those on lower incomes spend all of their money. Those on $100 o00 do not. More money is thus pumped into the economy and as Denniss said in the areas of highest unemployment.

Denniss continued, despite the Liberal Party focusing on interest rates. Denniss was there to implement and suggest policy that matters. There is no underlying rate of high inflation at present and that the bigger social cost was the unemployed. When pressed on what he would advise in regards to more stimulus, he suggested that he would mirror the disability pension and unemployment benefits on an equal level.

Whether or not this happen is debatable. But Denniss suggested the debt was sustainable that the human cost was much more important than higher inflation. But in the world of a thirty second bite his voice was lost. His angle taken away and the australian public not informed. The failure of democracy and the Australian media.

Indeed the stimulus payment has been used by our politicans to look at interest rates and taxes. Yep, middle class issues. What about the 4 Corners report and homelessness? Where is the voice of Denniss?

It takes one journalist to spend a day watching A-Pac and reporting on stances made by economists. A statement on the bottom of the screen on sky news suggested “Labor senators accuse economists at Standing committee of bias”. Denniss’s view was not mentioned on Sky News and he was not featured on any of the mainstream TV. He was however reported on SBS News…those who read it would not have got the whole story as I explained above.

As Senator Cameron who was agitated by the economists throughout the day said. ” I have been absolutely dumbfounded about the lack of social and human costs that have been looked at by economists today…you are the first person today to look at the social impact”.

Indeed that was my reaction to the statements delivered by economists. But Denniss was failed by an Australian media, with unemployed being unimportant and middle class society the dominating voice. The Australian Media failed the public, failed it badly for not being reactive to new ideas and new thought process. The continued obcession with interest rates and taxes is a failure of both the media and Australian democracy.

The last comment should be left to Denniss on my blog, Your voice  is too important to ignore

“I know as a person that I would prefer a 1% tax rise and higher interest rates if it meant more jobs and the huge social and financial costs to Australia of the unemployed were allieviated”

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