A new Melbourne Institute study asks this question and finds an intriguing answer:
In December 2008 and March-April 2009 the Australian Government used fiscal stimulus as a short-run economic stabilization tool for the first time since the 1990s. In May-June 2012, households received lump sum cheques as compensation for the introduction of the Carbon Tax scheduled for 1 July 2012. This paper examines the relationship between these financial windfalls and spending at electronic gaming machines (EGMs) using data from 62 local government areas in Victoria, Australia. The results show large increases in spending at EGMs during the periods when Australian households received economic stimulus cheques. Increased spending at EGMs in December 2008 amounted to 1% of the total stimulus for that period. We conclude that the 2008-2009 stimulus packages substantially increased gambling at EGMs in Victoria. We find no unexpected increase in spending at EGMs in the months when Carbon Tax compensation cheques were paid.
So, it seems that the nature of the cheque may also play a role. A clearly delineated stimulus cheque is spent in the way it is intended. A different kind of cheque may be valued differently. I have long suspected that despite the whinging Australians are the most conformist people on earth.
That is not to say that the carbon rebate cheque wasn’t spent. It was. Check out the retail sales bounce:
Perhaps we all bought more efficient appliances?
Full report below.