Page 4210 - Week 11 - Thursday, 17 Sept 2009
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Saul Eslake, the program director at the Grattan Institute of the University of Melbourne and the former chief economist at the ANZ bank, said last month in a lecture at the University of Western Australia:
While I do not support calls for the magnitude of fiscal stimulus to be scaled back, I think there is room for refocusing what remains of it towards longer-term objectives.
He went on to say:
… in constructing its stimulus packages, the government had made trade-offs between short-term effectiveness in supporting economic activity and jobs and longer-term value for money that seemed entirely appropriate at the time. But it may now be sensible to revisit that trade-off in light of more recent experience.
There have also been questions raised federally with regard to the way in which the stimulus spending has been appropriated. Senator Bob Brown moved a motion calling upon the federal government to have Treasury secretary, Ken Henry, and the Reserve Bank Governor, Glenn Stevens, appear in front of the Senate Economics References Committee to answer questions regarding the validity of the spending measures to date and the anticipated costs and benefits of continuing the stimulus. Specifically, the inquiry will be looking into how well the stimulus spending has worked so far; the costs and benefits of the spending plan for the future; how that future spending could be tweaked; the effect of stimulus spending on interest rates; and the environmental impact of that spending. Senator Brown’s motion passed in the Senate unopposed. He called for this inquiry to examine the stimulus spending as he wanted to ensure that taxpayers are not being saddled with unnecessarily high debt.
These deadlines also raise questions of sustainability. Will the social housing projects deliver quality buildings that will be built to best practice in their sustainability rating and serve us well into the future?
Another concern to the Greens is the amount of economic stimulus funds that is being expended through local businesses and contractors. Articles in the media recently suggest that in some states this is not happening and that, in order to meet the deadlines, overseas products and unqualified contractors are being used in the building projects. The government needs to assure the ACT community that as much of the stimulus funding as possible remains in the ACT and that we have quality dwellings at the end of the exercise.
The government must also assure the people of the ACT that discussions with the commonwealth will result in the ACT getting the best value out of the stimulus funding. We need a continued guarantee from the commonwealth that the funding is spent properly under the guidelines as they exist and that as much of the stimulus funding as possible is spent locally, while producing quality improvements to our social housing stock.
The Greens support the authorisation of funding as proposed but will continue to ask questions. We look forward to the results of a federal inquiry which will be made public. It is to hand down its findings by 2 October 2009.
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