The Australian's online comments editor eventually published the clarification of my letter. I reproduce it in full below. It is similar in substance to the previous post.
I should clarify my position for the benefit of my critics. My biggest criticism of the Rudd plan is the First Home Owners Grant (FHOG). It is a flawed policy that does not increase the accessibility of housing and largely goes to the middle class. My other issue with the FHOG, as with other cash handouts, is that once they are in place it is very difficult to take them away.
As to the cash handouts for pensioners and carers, I have no problem with these groups being given additional assistance. However, I am deeply uncomfortable with that being in the form of cash. Why not increase their fortnightly allowances significantly over the next year? This increase will quickly flow into the economy as they begin to spend on the basis of their anticipated income. However, I do concede that cash to pensioners and carers is a relatively effective way to provide a big boost to consumption in the lead up to Christmas/New Year which will boost consumer confidence.
Also, I would note that the largest investment component of the package was the $157 million for skills development. In the context of a $10 billion package, surely a larger component could have been directed towards such strategic investments?
As I say, my letter was largely targeted at the increased FHOG. I would also stress that I am uncomfortable about Australians paying tax that is then given out as cash lump sums to other Australians rather than being delivered through ongoing Government transfer payments and investments in hard and soft infrastructure.
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