12.57 pm, Sunday November 08 2009

Govt urges public to spend stimulus cash

15:59 AEST Mon Dec 8 2008
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Pensioners and families have been urged not to save the government's bonus cash payments, despite a slowing economy and rising unemployment.

Federal Finance Minister Lindsay Tanner is encouraging them to spend their share of the government's $10.4 billion economic stimulus package.

While some people would use the money to pay off debt, Labor expects the bulk of the cash to be spent.

"There are obviously some people who have very significant debt, but people can make their own decisions, their own choices," Mr Tanner told ABC Radio.

"We hope those who can will spend the money - whether it's buying a new washing machine, some more presents for the kids or a little trip away."

Doing so would keep the Australian economy ticking over, he said.

The government is handing over a total of $4.8 billion to pensioners and $3.9 billion to eligible families in a bid to ward off an economic downturn.

Mr Tanner said people should remember interest rates dropped significantly in recent months and petrol prices had fallen substantially.

"This money is additional money, people weren't budgeting for it," he said.

"It's money that has been provided deliberately by the government in order to stimulate spending."

"If everybody retreats into their shells then that will make the situation much worse," he added.

Opposition leader Malcolm Turnbull says that tax cuts rather than a "one-off sugar hit" would have a greater impact on the economy.

Mr Turnbull said any impact will be temporary, adding that while a similar program in the United States in the middle of the year saw household incomes spike, expenditure didn't go up by anything like the same amount.

"In a climate like this people are very much inclined to save one-off payments like this," Mr Turnbull told the Fairfax Radio Network.

He said everyone should assess their own circumstances and deal with the funds as wisely and prudently as they can.

"This is an economic equivalent of a one-off sugar hit," he said.

"If you want a more effective fiscal stimulus, tax cuts, across the board tax cuts, particularly targeted at lower and middle-income earners, are going to have a greater impact.

"People will see them as being permanent, they'll seem them as encouraging work, to invest, to hire people and so forth."

The Australian Greens say the government should encourage people to save so they don't find themselves in greater debt.

"Mr Rudd should have counselled people to spend wisely and keep some for a rainy day," Greens leader Bob Brown said.

But Families Minister Jenny Macklin says she's confident the money will be spent, and spent responsibly.

"We'd encourage people as they receive these payments to spend them," Ms Macklin said.

"Most people will do the right thing."

Ms Macklin said the package would help boost jobs in the wake of the global financial crisis.

She called on all critics to "get real" and support the package in full.

"I would say to the Liberal Party 'get real', recognise that the global financial crisis is having an impact in Australia."

Anti-gambling crusaders are urging Australians to spend their government bonus and avoid pouring the one-off handout into poker machines.

Launching their "Presents Not Pokies" campaign, World Vision Australia chief Tim Costello and South Australian Senator Nick Xenophon welcomed the federal government's stimulus package and urged people to spend the money wisely.

Senator Xenophon warned a lot of gamblers would still see an opportunity to waste the handout, adding the only beneficiaries would be poker machine and gambling companies.

"We know when the Howard government's baby bonus started flowing through several years ago there was an 18 per cent jump in pokies losses because a lot of this was gambled away," Senator Xenophon said.

"This (campaign) is about sending a very positive message as to how you spend your money but also a plea to government to do the right thing to tackle the reasons why over 50 per cent pokies losses are lost by problem gamblers.

"A thousand dollars can make a big difference, can bring joy to a family, can make a difference if you donate to overseas aid organisations like World Vision but a thousand dollars can be lost in the pokies in as little as an hour.

"That's why it's important that you either have a gift that makes a big difference, or you can blow it on the pokies.

"I know today that ... some big beneficiaries will be the chief executives of Tatts, Tabcorp and Aristocrat and that's a real worry."

Mr Costello said although the government could have chosen to invest the money more directly in the economy and infrastructure and creating jobs, the stimulus package was properly targeted.

"It's a great economic initiative, but we know that for every million dollars spent on pokies, less than two jobs are created," Mr Costello said.

"A million dollars spent taking people out to dinner, eating at restaurants creates 20 jobs, a million dollars spent on retail creates about 10 jobs.

"It's very clear that spending money on pokies doesn't create jobs ... in this financial meltdown."

A seniors' group says the prime minister should not rely on pensioners using their one-off Christmas windfall to splash out in the stores.

National Seniors Australia chairman Everald Compton says some pensioners will use the money to buy Christmas presents, but others will remain very conservative, keeping an eye on what looms as a tough year ahead.

"They are worried about what is going to happen to them in 2009 and they may well be very careful with the way they spend the bonus payments and think of their future," Mr Compton told AAP.

He said self-funded retirees were among the worst-hit Australians in the financial crisis and about 15 per cent of them would not receive anything in the Christmas handout.

"They are feeling it pretty hard - their portfolios are now worth half of what they were 12 months ago, dividends in 2009 will not be what they were in 2008, and they are very concerned about how they're going to make it," Mr Compton said.

"I think we'll find that Centrelink is going to be besieged by a lot of self-funded retirees saying they now cannot live on what they thought was going to be their retirement income."

 
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User comments
i work but still claim a part pension, and i have no play money left over from the handout. ' Ill be paying the remainder of my car insurance for the year which i had been payig mothly, saving me $65a month, pay off another direct debit, saving me $58 a month, im desexing my dog, buying a much needed pre-paid mobile for $100, and going to the wholesale butcher... I think my money will be well spent in my eyes, but spending wisely isnt the idea the government had in mind now was it?
with the economy the way it is right now, i think we should all just give the money back! put it back in the savings it came from! we're gunna need those millions in the next 10 yrs! the $1000 i'll recieve will not even cover a months rent let alone bills... yep this PM is really about helping young families..???
well i dont think its fair that dead beats get the money while the hard working ppl get nothing, why cant the goverment put the money were it is most needed. i have friends that are getting this money and all it will be going on is drugs and alco. i know some ppl will spend it on there kids and pay bills that will help them out. i also have a friend thats ripping off the gov he gets just under $1000 a fortnight all he did was lie to get that and now he gets this extra money as well, there are some ppl out there working that dont make $1000 a fortnight. kevin 747 needs to stay in aus for a few months to help us out take a hard good look to help out the hard working aussies. please kevin 747 stay in aus and dont go flying all over the world spening the tax payers money, stay and help the hard working aussies out not just the dead beats please.
They should have given to all, like England. They cut the VAT (IE our GST) in half Everyone wins not just those that cant look after themselves
yes pensioners should get yes parents who WORK should get it. but what about us low income earners who need it too? i take home less then people on the dole (because i'm paying for their dole) and cannot afford an extravagent christmas this year little own to travel or buy everyone a gift....its unfair we should benefit too seeing as tho its our hard earned tax that created the surplus!
thanks Rudd for nothing i work full time have no kids and what do i get nothing, i pay my taxes each week.how about giving some back to the single workers.... all the single mothers with kids and people on the dole should go get a job and stop taking from the working family's,single workers
i can understand why so many people are up set at the fact that they earn 2 much and want a better future for there children, the money is like a god sent to those people like me. i am a mother of 1 with 1 on the way i could not afford to stop work untill now 1 week befor im due 2 have my baby even then i still can not afford the time off, this money is set up 2 help the people who need it granted that some people will get more than the share you think they need, if the goverment says they are entitled to it who are we to complaine
What handout?? We get nothing at all from the govt. Half of our earnings go towards funding the handouts. Will our hard-earned taxes be spent on necessities and not end up in the pokies or being spent on alcohol and plasmas (which we cannot afford!)? Perhaps we should take the "least stress" option and choose to earn less. We have one child, but hear so many parents who have 3 or more children complaining about not having enough money. How about people think about the effect of the loss of earnings before they go ahead and keep having children?! Perhaps we should be spending some of the money on educating people about not borrowing to buy the McMansion and all the accessories, but living within their means and being responsible for the choices that they make.
I would really like a handout at the moment, but unfortunately we have to continue working paying our taxes for people who get to sleep in all day. We are a family of six and I have never received a handout from nobody so looks like we have to continue to tight our belts for this christmas and years to come. Thanks Mr Rudd for nothing.
My husband and I are both contractors who work very long hours and try to give our children a good education. We are a family who are fairly average but again do not qualify. I pray anyone who receives this bonus and has outstanding credit card debt PAY IT OFF FIRST.Do yourselves a favour and stop paying companies like Amex 25% interest !

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