The Depressionberg Unstimulus has already triggered an employment catastrophe in the largest segment of the economy, small and medium enterprise:
Things have been going better for the big end of town because it is enjoying major advantages over smaller competitors in its dominant online position, access to capital markets and more capital intensive growth models.
So, what’s the Depressionberg answer to his failing Unstimulus? More of it! At the AFR:
Treasurer Josh Frydenberg will move to expand the government’s business expense tax break, allowing companies with more than $5 billion in turnover to instantly deduct the cost of new capital investments.
Companies that make more than $5 billion in revenue, but less than that amount in Australia, will be eligible. That means employers including Dulux, Boral, Boeing, Brambles, Visy, Lion, Coca-Cola Amatil and GE will be allowed into the scheme, but businesses including BHP, Rio Tinto, Telstra, Wesfarmers, oil companies such as Caltex, energy companies such as AGL, and Insurance Australia Group are excluded.
Business groups had told the Coalition a wider version of the $27 billion policy could add more spark to Australia’s post-COVID-19 economic recovery.
Well! If they said it it must be true. Lost of the good Mr Depressionberg is that if these businesses are recovering better then they will invest anyway. Though I doubt it will do much for them, either.
The problem is simply too much slack in the economy. Unprecedented slack, in fact:
With the output gap at levels last seen in the early 1990s recession, we don’t need more supply, we need more government support for demand in the form of productivity-enhancing infrastrcuture, public housing, and income supports for the vulnerable such as a permanently boosted JobSeeker.
But if at first you don’t succeed then bash your head into that brick wall twice as hard.
