The Wall Street Journal Asia is upset that the Australian Treasury is upset with an editorial from last week. From that editorial --
Over the last fiscal year, the Rudd government has announced a spree of cash handouts, infrastructure programs and pet projects, which Tuesday's budget funds. The biggest outlay is A$14.1 billion in payments to pensioners, a core Labor constituency. Several more billion are allocated to roads, bridges, ports and a nationwide broadband network. Then there's money for schools, health care, clean energy, parents and first-time homeowners. The only measure that would stimulate the economy -- tax cuts -- is tiny.
Thus: money for old people, roads, schools, parents, homebuyers etc not "stimulative". Tax cuts -- when the tax take is already automatically tanking because of the recession and in the face of weak global demand -- "stimulative". Luckily for Australia, this stuff doesn't seem to travel well.
UPDATE 3 JUNE: Australia managed positive GDP growth for the 1st quarter of 2009, which may be a unique achievement for high-income economies. The aforementioned fiscal stimulus was in action during this period.
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