Debate will no doubt rage for years to come whether the “Kev 07” stimulus package worked for Australia. I must admit that I queried the benefit of it when it was announced on 3 February. I struggle to find the benefit of giving someone $900 if they are at risk of losing their $50,000 job.
The same arguments about the baby bonus and plasma TVs are also being raised about the stimulus payment. Foreigners and the dead got the cash. Yet those that needed the government handout the most seemed to have been the ones that didn’t earn enough as they weren’t technically a “taxpayer”.
There have been complaints, quite justifiable, for some accounting firms charging $60 handling fees for the stimulus payments. National credit card debt continues to rise with it now around $45 billion. And we had announced in the Federal Budget in May that we have a record budget deficit.
Yes Australia avoided a technical recession when the March GDP figures were released but really what impact did the stimulus payment make to the bottom line? And is it inevitable that we will fall into recession anyway in 6 months time?
National unemployment continues to rise with 1 million expected to be without a job in the next few years.
Business confidence has risen in recent months and I can personally tell you that virtually every one of my clients were very happy to be getting $900 on 4 February.
So I ask again has the stimulus payment worked? I don’t think we really know the answer to that one.
But what I do know is that the nation’s tax compliance has improved for individuals anyway. About 4 weeks ago, the ATO had estimated that there were approximately 800,000 people (almost 10 percent of taxpayers) that were eligible for the tax bonus but had yet to lodge their 2008 tax return. 2 weeks ago that figure was 500,000. Last week it dropped to 280,000 (or $252M in payments!). My office had its busiest June ever as people came out of the woodworks to get their $900. As I told them, if you saw it on the ground you would pick it up … so why not bend your back.
Since 3 February, there have been over 2.2 million tax returns lodged. This is a 20 percent increase for the same period in prior years. Over 318,000 returns for prior years have been lodged as well. And there have been a lot of real slackos as well. More than 2,000 people have since come clean and lodged 9 or more years of tax returns.
Happy New Financial Year everyone! May the new year bring prosperity to your business and the economy.
Do you think the stimulus payment has worked? Has your business noticed a pick up in activity since 3 February?
