Let the bail outs begin

Discussion in 'Property Market Economics' started by paulF, 19th Mar, 2020.

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  1. paulF

    paulF Well-Known Member

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  2. Chabs

    Chabs Well-Known Member

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    "Trickle down" benefits don't happen, much to the surprise of anyone who saw it not work the last few bailouts...

    These same airline companies used most of their cashflow to buy out stock during the good times, inflating the value of those stocks and then having nothing for the bad times. Now the the airlines get bailed out, and not the working persons who need it while the industry is affected instead.

    Why not give a monetary benefit to the people who need it, in exchange for higher taxes for anyone who claims this benefit, spread out over a few years (this re-captures the aid money at a time they can afford to pay it back). That's how you do a proper bailout, direct to the people who need it.

    Companies come and go, competition is good. Its not right to effectively encourage these companies to not be punished for business decisions that would be considered unthinkable to private companies because, well, there is no punishment for these bad decisions.

    I guess the problem is the concept of the financial system being so reliant on what happens in the next quarter, rather than in the long term.

    The other problem is the ties between government decision makers and decision makers in these companies. The government is made of individuals who care for their own benefits and the benefits of the businesspeople they network with, not the benefits of their constituents. There is incentive to just "appease" constituents and allow "acquaintances" to get the profits.
     
  3. paulF

    paulF Well-Known Member

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    Absolutely. Corporate buybacks should be banned
     
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  4. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    I'm a free market guy and I don't like bailouts. But to be fair to the airlines, the government did tell them to ground flights.
     
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  5. Chabs

    Chabs Well-Known Member

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    "Bailout" in the sense of removing any airport taxes/costs or any overheads related to operating that are controlled by the government is logical and fair. Anything more is the wrong kind of intervention.
     
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  6. shorty

    shorty Well-Known Member

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    I disagree. Bailouts should come with strict conditions, but you need viable airlines from a national security perspective.
     
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  7. Illusivedreams

    Illusivedreams Well-Known Member

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    How about we dont bailout the welfare recipients?

    4.8 Billion dollars?

    More than 6 million welfare recipients, including pensioners, carers, veterans, families, young people and jobseekers will get a one-off cash payment of $750 from March 31.

    "The biggest beneficiaries of that will be pensioners," Mr Morrison said.

    "They comprise around half of those who will receive those payments, but they also will be extended to those in family tax benefits, which obviously goes to those in earning households."

    Coronavirus update: Follow all the latest news in our daily wrap


    The one-off payments will cost the Government $4.8 billion,
     
  8. Chabs

    Chabs Well-Known Member

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    I can see validity. However if airlines are so important, then shouldn't they be regulated with how they can use their money in a responsible manner.

    Giving money to these people has significantly more economic benefit, some 101 on economics.
    • Money given to people who are likely to spend it will circulate in the economy better and the benefits will be more substantial
    • Money given to people who are less likely to "consume" with it, causes asset inflation (giving to rich) and benefits are less substantial
    • You want the people who need $$ most to be getting food/shelter if possible for stable economic conditions that we can become moguls in. ;) We all saw what happened after hurricane Katrina in the US, lol.
    When massive tax breaks, benefits, brown paper bag deals, regulatory preference, etc is given to people that government decision makers are chummy with, this provides a significant net disbenefit to the taxpayer. You just don't directly "see it" like you see Bruce the dole bludger from across the road's $750 new coffee machine.

    Its linked to the "privatise profits", and "socialise costs".
     
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  9. paulF

    paulF Well-Known Member

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    I would assume that most of these recipients have been paying taxes all their lives and do deserve a bailout , unlike most corporates who make billions of profits, dodge taxes, buy back shares and gauge customers.
     
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  10. willair

    willair Well-Known Member Premium Member

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  11. shorty

    shorty Well-Known Member

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    How about we do, because they will put it straight back into the economy where it's needed.
     
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  12. 2FAST4U

    2FAST4U Well-Known Member

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    “After Qantas announced a $2.8 billion loss in 2014, staff were all called on to freeze their wage levels for 18 months, a call that my union was first to heed in order to help the struggling airline. Assuming the alternative possibility of CPI-based wage increases, employees now forgo $60 million each year as a result of the ongoing wage freeze. At the same time executive and senior management remuneration packages have increased by – you guessed it – $60 million each year. Not one cent forgone by employees to help the airline has gone into reinvestment or new aircraft”.

    https://www.smh.com.au/business/com...-his-record-suggests-not-20191016-p5319d.html
     
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  13. wylie

    wylie Moderator Staff Member

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    That is so wrong. Why do they get away with it? Who can stop this?
     
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  14. Someguy

    Someguy Well-Known Member

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    If they managed to cut wages or slow wage growth they are entitled to that money right?

    Not sure it’s great for the economy and society in general that we are creating a greater divide between working class and senior management but it is definitely not discouraged by our government so we have to accept it.
     
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  15. frankjeager

    frankjeager Well-Known Member

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    its insane that it doesnt really get noticed right.

    i have no problem with gov bailing out qantas, but it should be in the form of nationalising a portion of the company.
     
  16. Chabs

    Chabs Well-Known Member

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    this, bailouts shouldn’t be free. The taxpayer should own a portion of the company and receive preferred dividends.
     
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  17. KJA182

    KJA182 Well-Known Member

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    Yes Joyce, amongst other CEOS have saved nothing for a rainy day. a problem created by corporate incentives and the RBAs low interest rates

    The bailouts that are going to take place are disgusting. Welfare for the each end of the income spectrum, whilst the middle class get the bill.