The Treasury's Non-modelling of the Stimulus

Abstract

In late 2008 the global financial crisis (GFC) sparked a boom in Keynesian economic commentary and activist fiscal policies. The Australian government responded with an immediate $10.4 billion 'cash-splash' to households (Commonwealth Treasury 2008), followed by a $42 billion 'Nation Building and Jobs Plan', which was to include $12.7 billion more hand-outs as well as a $28.8 billion increase in government capital investment. In total, the government 'stimulus' was estimated to be about $52 billion. If we included all discretionary government spending that happened after the GFC then the number would be far higher.