Q. Thinking about the future, how long do you think it will take for the following to occur?

Q. To what extent do you support or oppose the following suggested tax reforms to help reduce any debt Australia may have, as a result of the Covid-19 stimulus packages?

• Participants most support preventing companies who are registered in offshore tax havens from accessing Covid-19 government support (64%) and are least supportive of implementing an inheritance tax (18%) to reduce any debt as a result of the Covid-19 stimulus.
• Those aged over 55 are most likely to oppose removal of franking credits (39%), negative gearing (33%) and inheritance tax (63%), however they are most likely to support preventing companies registered in offshore tax havens from accessing Covid-19 government support, (80%).

The “serious people” in the political world, the media and a lot of “think tanks” (where, apparently, people do very serious thinking) keep telling you, day after day, that a very important goal right now — today, immediately — is to have a balanced government budget. Never mind the need for major investments that are needed in a whole host of things like infrastructure and social services. Balance. It. Now. Except they are wrong — and they are leading us down a quite foolish path.

I know this is a bit wonky but it’s actually quite easy to understand. Money for public spending is actually quite cheap right now to get. Nobel-Prize winning economist Paul Krugman points this out, speaking mostly about the US economy but the point is relevant worldwide, that government borrowing costs are lower than they’ve been in recent memory. Why?:

The main answer is that this is what happens when you have a “deleveraging shock,” in which everyone is trying to pay down debt at the same time. Household borrowing has plunged; businesses are sitting on cash because there’s no reason to expand capacity when the sales aren’t there; and the result is that investors are all dressed up with nowhere to go, or rather no place to put their money. So they’re buying government debt, even at very low returns, for lack of alternatives. Moreover, by making money available so cheaply, they are in effect begging governments to issue more debt.

And governments should be granting their wish, not obsessing over short-term deficits.

No one is happy with the conditions that are making money so cheap to borrow — the Global Financial Crisis has brought down a world of hurt on to the heads of tens of millions of workers, while the bankers have skated by.

But, if there is a silver lining here that governments should seize, it’s that the terrible mess opens up a window of time to spend money to make some serious, long-term investments that will make the economy better for real people. Of course, some day, you do pay back debts — just like one does in paying for a child’s education, or a home or another investment that makes sense. But, right now, at a time when money is so cheap it’s almost being handed to governments for free, we should not be wringing our hands over government deficits.

By the way, Australia’s deficit, as a percentage of gross domestic product (which is how you want to look at it — think of it: it’s like your personal income…you always wants to balance how much you borrow with your ability to earn enough to pay the debt back) is 0.7 percent — a tiny amount. By comparison, China’s annual deficit is running at 2.3 percent of GDP, Japan 8.1, Canada 3.3 and on and on. The only two countries with serious big surpluses are Saudi Arabia and Norway — thanks to oil revenues pouring in.

Anyway, spend the money.

— Jonathan Tasini
@jonathantasini

Q. How much of your Christmas spending do you put on your credit cards?

39% say they will put at least half their Christmas spending on credit cards – and a further 22% will put some spending on their credit cards.

Those most likely to use credit cards for at least half their spending were aged 25-34 (49%) and those least likely to use credit cards for Christmas spending were aged 18-24 (22%). Those on higher incomes were much more likely to use their credit cards for Christmas spending – 54% of those on incomes over $1,600pw said they would put at least half on credit cards compared to only 18% of those on incomes under $600pw.

41% of those who say they are very concerned about their level of credit card debt and 54% of those who are somewhat concerned say they will put at least half their Christmas spending on credit cards.

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Q. How concerned are you about the amount you currently owe on your credit cards?

27% say they are very or somewhat concerned about the amount they owe on their credit cards. Those most concerned were aged 35-44 (35%) and full-time workers (35%). There was little difference across income groups.

12% of those who intend to put more than half their Christmas spending on credit cards say they are very concerned about their current credit card debt and 23% are somewhat concerned.

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Q. Between Liberal and Labor, which party do you think would be best at managing each of the following issues?

The only substantial lead for the Labor Party is on improving wages for low income earners (34% to 20%).

 Liberal Party strengths are in managing Government debt (42%/15%), taxation (32%/18%), food prices and inflation (31%/18%) and interest rates (30%/17%).

Although overall opinions are closely related to voting intention, the Liberal Party generally performs better among its voters than the Labor Party does with its voters. On Government debt Labor voters split 35% Labor/14% Liberal/42% no difference and on petrol and energy prices 37%/2%/50%. Comments »

Q. Between Liberal and Labor, which party do you think would be best at managing each of the following issues?

When it comes to which party is best at handling economic issues, Labor leads the Liberal party on managing the improvement of wages for low income earners (+17%), executive salaries (+9%) and the age pension (+9%).

Labor trails the Liberals in terms of managing government debt (-24%), followed by managing interest rates (-9%) and superannuation (-9%).

Perception of which party is best at managing the economic issues listed followed party lines.

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