Not impressed with Morrison's business lunch speech today

Not impressed with the LNP response to the Covid19 issue - they must be sighing in relief that the pandemic has given them an "out" for the recession that was coming.

While I agree the stimulus should not be simply "money handed out", and I like the idea of vouchers or preferably increasing the pension/student allowances ... his comments about business having to pull their weight and keep employees on at all cost is not so easy to achieve if they've got no income.

Even big business is struggling, with Qantas cutting its routes by 25% and putting people on paid holiday/long service leave effective immediately - with the potential for unpaid leave in 4 months if things don't come good - senior execs are taking a 30% paycut straight away and Joyce (CEO) is not taking any pay for the next 3.5 months.

Personally, this time last year I was clearing $1,000/mth net from my small and very part time one person home based business - last month I didn't issue a single invoice, ergo, sold nothing - which means my distributors and outlets aren't selling anything. There will be a lot of larger 2-10 employee places that are in a similar situation on a larger scale.

Small business cannot do the heavy lifting ... we need leadership and direction ... not buck passing

 

I agree. A bigger question needs to be asked, which is should we be buying our way out of recession? It looked like it worked last time but the economy has effectively languished for 10 years (isolated property booms aside). If we buy our way out of recession this time, what impact will it have on the economy in the longer term?

People pillory Keating for the recession we had to have, and I agree that it was painful, but it did set up the economy for a run of unprecedented growth. It seems like shorter term pain for long time gain to me. Something we have been reluctant to do since the GFC and I believe we are paying the price.

 

Scomo did ask the banks to pass the cut in full last week and they did comply

 

Whoopie Do ... the price of a cup of coffee in my pocket

 

It's a hard one there, generally I agree the government should stay out of the way and let the private sector run its course free from intervention, but a rapidly evolving crisis leading to recession may not be the best way to weed out poor quality companies. Qantas is a good example, if this goes on for a while they could have some serious financial issues, but I can see a good case for short term government intervention to help keep them operational.

Creative destruction is not always a good thing, quote from link below:

"Unprofitability doesn’t mean the firm always should close down. Market forces may lead to many firms closing down because of lack of profitability. However, this closure may not be an efficient outcome. A firm may become unprofitable from short-term factors, such as

• • High tariffs hitting exports
  • Short-term recession hits output
  • Short-term labour market problems, such as strikes
  • A temporary glut in supply from overseas

In these cases, the lack of profitability is not a sign the firm is terminally inefficient. In these cases, there may be a strong case for temporary government help to enable the firm to come through the short-term difficulties. It may also be possible for a firm to restructure and diversify – this can be less damaging than wholesale closure."

Creative destruction - Economics Help

 

I csn understand this point. However, is it talking about buying the whole economy out of recession or protecting certain businesses?

there may be a strong case for temporary government help to enable the firm to come through the short-term difficulties

For instance, I wouldn't argue it's in the national interest for qantas or a big4 or bhp to close. On the other hand, we spent billions keeping Ford and Holden afloat and they closed anyway.

The problem with stopping recessions is that the economy misses out on the other benefits

Economic hardship can create a change in the mindset of consumers. As consumers stop trying to live above their means, they are forced to live within the income they have.

Maybe Recessions and Depressions Aren't So Bad

I really noticed the difference in people's attitudes after the last recession. To me, it feels like the economy has gone stale and so have people's attitudes.

But I absolutely take your point about the government protecting certain businesses. I would support that as long as it's not the car manufacturing industry. Oh, wait.

 

What’s going on at the moment is a joke that I think politicians should step in!

What’s happening today!

Perth IGA - 4 long length roll toilet rolls $8

Maleny IGA - 8 long length roll toilet rolls $9

Country town cheaper than a main city.

Bump up all grocery prices as they are in demand?

Inflation rising while wages and business income are dropping.

I hope there is a good plan soon.

 

Some more news on stimulus package

Australian government stimulus package promises financial support 'as fast as possible'

 

CEO Qantas taking a pay cut of sorts, base salary over $2M, I think 30% cut

 

Even less impressed by Health Minister Hunt on radio this morning declaring that the 100 "pop up" testing clinics will be in place by - wait for it - May!

That's right - 6 weeks away. Only have to see what has happened in a 6 week period in countries like Italy to know that this is pathetic. They should have been planning these steps 3-4 weeks ago in pro-activity, not reactivity now.

A young lass was also on the radio, stating that she'd presented at a clinic in Sydney after coming down with a serious cold, 10 days after two close work colleagues were tested positive - only to be told there was a 3 hour wait and she probably wouldn't get tested anyhow because she hadn't travelled or living with someone who was positive.

How are we supposed to know if you're living with someone positive if they won't test you. How stoopid

 

Morrison presented the outline of a stimulus concept at a business lunch a few days back, with minor updates since - including demanding that small/medium businesses do what they are financially incapable of doing - which was woeful. Then add on the delayed action on dealing with a fast moving virus ... they should have been making plans and poised for action 3-4 weeks ago, when it was obvious how fast and destructively this virus would spread.

I don't care who is in government - if either side presented what the LNP have so far, they'd be getting a tongue lashing - please stop trying to make it about party politics. I am NOT a die hard Labor voter either - or a Greens - or anyone else. I'm one of those glorious swingers who vote on the policy presented.

They are knee jerk reacting rather than taking fore-planning action

Experts on how coronavirus will wallop Australia's economy – and what the government must do

Who will keep the lights on if coronavirus continues to spread?

 

As Geoff linked - a $500 payment to those on Newstart and Pension would be good as they won't simply pay it onto their mortgage or credit cards. Hope it's spent wisely and not on updating their big screen TV.

 

Economic hardship can create a change in the mindset of consumers. As consumers stop trying to live above their means, they are forced to live within the income they have.

Maybe Recessions and Depressions Aren't So Bad

I really noticed the difference in people's attitudes after the last recession. To me, it feels like the economy has gone stale and so have people's attitudes. ... Perthguy

** agree with this ... it's not healthy to have continuous growth with the odd check to realign attitudes with changed reality

 

... that is exactly what the LNP are proposing

 

I'd put $500 on the" not"

 

Oh no not pink batts again or was that another stimulus package

 

*** play what's happening now, not 10 years ago ... but yes to cash hand outs, so some of the need ground policy must've been palatable