MOAR DoleHider easy!

Via AFR:

The cost of the JobKeeper wage subsidy will increase by more than $15 billion due to the hammer blow to business caused by the Victorian coronavirus crisis.

The $15.6 billion JobKeeper blowout, which will take the total cost of the scheme to $102.2 billion this financial year, is due to two factors.

First, more businesses, predominantly in Victoria, will have to access the existing scheme between now and the end of September because of the shutdown of the state’s economy. This will cost an extra $4.5 billion and will result in 530,000 more Victorians receiving the subsidy in the September quarter.

Secondly, at a cost of $11.1 billion, the government has softened the eligibility criteria for the new JobKeeper 2.0 scheme, due to begin in late September, because there will be many businesses which recovered in the June quarter but collapsed again because of Victoria’s second wave lockdown and will now need ongoing support.

How hard was that? Print a few more bonds, sell ’em to the RBA.

Deficits are irrelevant. Go for virus elimination.

Monetise the virus!

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

      • …they’ll stop at $130b to match the initial treasury estimate. Only logical 😉

        I think its called supersymmetry?

  1. Sunlord BCNMEMBER

    I remember growing up in Melb, family friends and our family, used to have to pay their loans off, I’m not sure what happened, you can change your mind now or someone just pays your debt off
    Out of all the things I can’t understand this topic, doesn’t make sense to me

    Truly can someone explain this to me in very simple terminology?
    What about all the bad loans in banks and government borrowings, are you saying no one has to pay their debt?

    • I think the idea is to destroy the working and middle class completely. That way we will have a strong elite that can trickle down their wealth to the newly created serf and slave classes.

      • Look, I’m obviously taking the piss here a bit. But MMT is useful. And if used judiciously (like to help eliminate a virus instead of worrying about the budget and letting it spread) then it should be.

        I would also use it on nation building stuff like infrastrcuture.

        The problem is if you do none of it you;er currency goes to the moon and drops a nuclear deflation bomb on you.

        • I agree the problem is not the MMT by itself. The problem is when you combine it with corrupt leaders, organizations, and poor governance. MMT will not fix that, it will only make it much worse.

          • +1
            We need to stop pretending our country is not corrupt. Corruption in this country limits which monetary tools we have for use. MMT does not work in a corrupted political environment. Economists need to apply the real world circumstances such as corruption to their models such as MMT and then see if the right outcomes are achieved. Instead, removing such massive swing factors and just saying “in a perfect world we would use it to build productive stuff like infrastructure” just shows how naive and out of touch they are.
            What is even the point of wasting your breath in saying such silly things?

        • I would also use it on nation building stuff like infrastructure.

          In the Australian context this means new gas projects, new coal mines, and new coal burning power stations. Single digit IQs predominate in this government…

    • Jumping jack flash

      “…or someone just pays your debt off”

      This is the mark of the winner in the New Economy.
      Nobody but the most blithering idiot pays off their debt themselves. Anyone who knows what’s what in the New Economy knows that you get someone else to take on an enormous pile of debt and hand it over to you, and then you use that to pay your debt, and then keep the change as “capital gain”. Wonderful!

      And so it goes, on and on and on…

    • boomengineeringMEMBER

      Sunny,
      Everyone’s gone soft but there’s no such thing as a free lunch. We must be the only Austrians left standing.

    • MMT is a way to deleverage the total debt load i.e. you get rid of a portion of the debt through inflation (instead of each individual paying off their own debts)

      So, who pays? The cost is socialised i.e. we all pay – even those who have no debts and have never had a debt.

      And the best bit is that no one realises what’s going on. Just beware of the people who claim that there is no cost to society from MMT — quacks and idiots the lot of them.

    • Ronin8317MEMBER

      Your family can’t print money, but the Australian Government can.

      Printing money will debase the currency. It’s bad when you do it when everyone else isn’t, but it’s also bad when you DON’T do it when everyone else is. How much has US print? China? Japan? Europe?

  2. Jumping jack flash

    Good, but nowhere near enough to save us.

    Another 300 billion is desperately required just to account for the missing debt growth over the past 10 years. If we want to turn around the deflation we’re “detectably” in since around 2017, then we will need more than that, again.

    Lets go for another 700 billion and make the stimulus a cool trillion. That should get the place jumping again just like it was back in 2006 – I mean that is their goal after all, to return to the conditions of 2006, but to get there we’re going to need a lot more debt and a lot higher debt growth rate than what we currently had for the past 10 years.

  3. Awesome, so just like K&S transport (or whatever their name is) the other day. Australian business can expect their profits to be funded by the state for ever.

        • boomengineeringMEMBER

          Ok, 1 quick as possible, computer line down, so on phone.
          You can imagine the amount of weight my hard core natural power lifting etc gym had, 200lb each dumbbell s included. Had to move so stuffed the container full to the brim. Received a flabbergasted call from K&S terminal crying “what the hell have you got in n there, we sent the big forklift to the workshop thinking mechanical failure as it wouldn’t lift it.
          When it arrived at Manly the driver in his wisdom decided to unhitch it from the prime mover.
          Con’t

          • boomengineeringMEMBER

            The trailer was left near middle of road so I proceeded to unload it. Problem with that was that the weight was balanced over the wheels and as it was unloaded the weight see sawed towards the front where the jockey wheels were. Although substantial they sunk into the bitumen so deep that the container trailer leaned forward so much that the beams buckled and collapsed with me inside copping a few here and there. When empty the big guns were called in to salvage the mess.

      • Also their accountant disappeared several $mill.
        Not bad for an ASX listed co. Not one of Allan Scott’s proudest moments.

  4. Arthur Schopenhauer

    Time to roll out the “Pretty Fast Train”? (PFT)
    – nation builder
    – main blockers hobbled (airlines)
    – huge labor soaker, especially if built by hand!
    – put a million under-utilized Hi-Luxes back to work
    – uses a sht tonne of Aussie steel and concrete
    – the time has finally arrived!
    – first train “The Tim Fisher Flyer”
    – first leg, Melbourne to Albury

    https://m.youtube.com/watch?v=3jl9hTIkXXc

    • Gotta have a high speed train! And dig some ditches maybe — great for jobs and GDP!

      Boom times ahead – take it from me.

    • kannigetMEMBER

      We could increase the labour component by paying 3 people to dig the holes and 2 to fill them back in as the first 3 work….

  5. I was very against JK when first came out but IMHO believe that once we went that route it was going to need to run for 12-18 months. any tapering now is not good. if they drop to 1,2k will leade to lots of loss of jobs at the wrong time. we better off incentivising business to help stability and certainty. the revisions last night go some way but are way way short of what needs to happen, including:
    * keeping at 1500
    * extending to broader industry etc
    * extending to black hole such as businesses in unit trusts with discretionary trust unitholders and partnerships of trusts etc
    * not having a 1ce off time for new employees but allowing people employed off JS to be admitted into JK during the extended processs
    and a multitude of others. Richard Koo offers a backdrop. Pity doubt Fraudenberg and co have read albeit i senth them copies.

    to spite the waiter getting more than their wage we will see a massive losss of white collar workers where the diff between the sacled down and their wage is too far a reach for cash strapped businesses. A simpler option would have been to cap at wages. The ATO have the data (or easy to access) to ensure that wages not pumped up to then get max.

    After 18 months could look to reduce (unless another major impact) and business should be told now about the 2 year plan ie until march. then march will need to requilify and reduced then again June etc … Seems any of my submissions falling on deaf ears all politics

    • kannigetMEMBER

      It should be paid directly to the employee, not via the employer. Numerous organisations are using it to avoid paying wages and increasing profits, Nick Scali for example…. received $4.1m in jobkeeper and rent relief but now paying investors a dividend.

      This approach is just taking the piss. its given to companies regardless of their need, Mirvac using their multiple company structures to qualify despite being too large to qualify….

      Give it to the employee directly via ATO credits, you get a declaration from your employer that your hours have been cut as a result of COVID, and the ATO makes direct payments to your bank account. Next tax return for the company, if there is no evidence of a reduced turn over hold the companies responsible for the false declaration.

  6. Aussies Can't Socially Distance

    I know of three businesses on JobKeeper and none of them need it because business has been strong since May and they’re high net worth people. They’ve made out like bandits.

    This must be playing out over and over throughout the country. Tens of billions of dollars going to people that simply don’t need welfare.

    It’s Pink Batts by a factor of 100. It’s an utter disgrace.