Wednesday, October 22, 2008

Trans-Tasman contrasts in response to financial crisis

The Australian government dedicated half its surplus or $10.4 billion dollars to a stimulus package. The money goes out before Christmas to those most likely to spend it; pensioners and their carers, low income families and first home buyers ($14,000 from the State when you buy a house! That's twice the Howard government level.)

This was done without any detailed Treasury modelling because both officials and politicians were of the opinion that immediate action was needed. In particular it appears that Australian and international experts are not very confident of the continued health of the Chinese economy which is the main driver of growth in resource rich Australia.

The economy is still dominating the front pages and Rudd has announced the goal of avoiding recession and developing regulations in response to the crisis that will be a model for international developments. This is consistent with his extraordinary ambition to be seen as a player on the world stage.

I suppose that it is no surprise, given the Election season, that by contrast the front page news on the New Zealand Herald website at the moment is that Lockwood Smith has been known to make a dick of himself. Who knew?

Cullen will be happy to find that fishhooks in the detail of the Government's bank guarantee were big news in Australia this morning. So Australian moves are not without percieved missteps.

Meanwhile the outcome of the NZ election is not a topic of great interest.

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