David Hargreaves says the Government's now got a very fine balancing act between supporting and stimulating the economy, including use of novel tools such as 'helicopter money'

David Hargreaves says the Government's now got a very fine balancing act between supporting and stimulating the economy, including use of novel tools such as 'helicopter money'

Okay, I get why the suggestion the Government might deploy the famous 'helicopter money' to help kickstart the economy has fired up the imagination of the public.

It's a sexy idea, given the images of rows of helicopters showering the people below with lucre.

Even beyond such images, the simple thought of the Government handing each New Zealander an amount ($1500 has been talked about) with basically specific instructions to spend it, is an appealing one.

In a way, however, I'm rather sorry that such talk has emerged at this time. 

I actually had some close association with a localised version of the aforementioned helicopter financing way back in the early 2000s. 

This was 'Hutt Helicopter Money'.

A group of like minded individuals got themselves elected on to the Hutt Mana Energy Trust with the basic platform of winding the trust up and distributing the assets to the trust's beneficiaries.

The suggestion was that the trust beneficiaries - anybody paying a power bill in Wellington's Hutt Valley (so, a lot of people) - could end up with a cheque for, as it happens, possibly $1500.

And yes, this did fire the imaginations.

It was a long time coming though. There were a lot of boxes to be ticked and hurdles to climb before such a thing could take place. And the people became restive.

One of the interesting things that emerged was the number of people who started incorporating this putative $1500 into their budgets. While this amount had, yes, come out of mid-air, it was suddenly very real to people and they needed it NOW. Sob stories emerged. And what the heck was happening. And we need this NOW!

On the other side of the fence of course were those who said that they could think of much better civic things this money could be applied to and it shouldn't be left to the great unwashed to just go out and squander it on a widescreen TV.

In the event, the trust did a splendid job of tidying up its assets, the cheques were duly dropped on to a welcoming populace and there was even a tidy sum left over to park with the adjoining charitable trust to use as grants for energy saving projects. It was a win-win.

It's too early

The point of that though is that by having the discussion about generalised cash payouts for the New Zealand public now, we are opening the grounds for disappointment and frustration.

I think it's far to early to even contemplate a measure such as this.

For a start, does the Government actually want New Zealanders, assuming we can progress to a point where retail outlets 'properly' open again, leaping straight out and buying things and congregating in nice crowded stores and, well, passing on you-know-what?

The clear message so far is we all need to stay at home. That's unambiguous. And we should ease ourselves very carefully back into open retail outlets. Offering cash to spend as soon as were are in a position to do so would be a conflicting message.

The other problem in having this discussion now is that people might start to feel 'poorer' than they are. Which would not be a good thing, given the very real stresses out there. 

You might say that in such a situation it's good to give people something to look forward to. Yes true. But my experience with the Hutt helicopter money is you can't keep people waiting too long.

Sector interests

Then the other, other problem is that if people think the Government's of a mind to start spraying some cash to the general population, well, certain sector groups will decide they have much better ways in which the money could be used. It's amazing. Whenever the idea of money being given away is suggested, every Tom, Dick and Harriet decides "I should have that. I'm the worthy cause."

I'm more than a little uncomfortable that New Zealand is being talked up internationally as some kind of great success story in our battle with the virus. 

We've made a terrific start. But if the experiences of Singapore and before that South Korea tell you anything, it's that if you take your eye off this damn thing for a minute it's off like a bushfire.

So, we've made a good start. In what might be a very, very long process.

That's the key difference in this as an economic crisis when compared with something like the GFC. The GFC had specific causes, to which specific remedies were applied. And once the 'fix' was in it was a matter of looking for the recovery.

We really can't talk in terms of an economic recovery until the virus is no longer an issue. And nobody knows how long that will be. But it could be years rather than months.

More to come

So, for all that the Government has done a terrific job so far getting economic stimulus out there - it may need to have a second, third, fourth wave of this stimulus yet, just to prop us up. What we've seen could be just the start of what is needed. Unfortunately. Our Government went into this thing in a good position financially, but there are limits. The worst thing would be to run out of ammo when there's still a war to fight.

In such a backdrop the idea of a cash handout now would likely be a total waste. 

People might just save a cash handout now. To be honest, I would. At the moment very many of us are surely more likely to think that $1500 stuffed in the mattress will be of more comfort than a new TV. 

And if people simply stashed the money away, that's potentially around $6 billion of Government money that's disappeared with no apparent impact - at a time when every dollar is going to count.

So, we all need to hold our horses, or helicopters, and wait this one out. 

It's going to be very tricky how the Government does go about getting the retail economy up and running again. But at this point I think direct support for the businesses will remain the best ongoing course of action. 

Picking winners

That does risk the possibility that the Government gets into the realm of 'picking winners', which I'm not comfortable with simply because governments around the world don't seem to ever to that very well. 

But ongoing direct support to business is probably the best course of action at the moment. We may have a very long slog ahead.

The point at which you want the people to spend, spend, spend and start pumping the economy is when you are confident that a recovery can be successfully launched - IE that damn thing has been put back in its box. But only then can we be confident that sustainable economic recovery can be attained.

And at that stage, I say get every helicopter in the land, zooming over every main street in the land with this music of course blaring over loud speakers, and let the people be showered!

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A fall is coming regardless, this will just create more debt and buy some time, Its this short term thinking that has got us here in the first place. The sooner the fall happens, the sooner we can get back to building an economy based on reality.


All those who have an issue with helicopter money raise your hands.

Reach for the sky!

Me. 100%.

I'll raise my hands to grab the free money.. does that count?

Millions of Australians (all beneficiaries) are getting 2 lots of $750 as an economic stimulus package.
Bound to cause more spending stimulus than cutting interest rates.

I like Tim Hazeldine's idea of 0% GST for an indefinite period.
That realises a decent financial benefit every week on groceries as well as fuel. It means you only benefit if you spend, as compared to helicopter money which can be saved or easily frittered away.
Our household of 4 spends about $400 pw on groceries. Kill GST and that is a saving of $60.

Guess that would be $15-20 billion of tax take gone for the government? It looks like income tax take is going to fall significantly this year as well. How do we fund new spending again?


Heres some ideas that will blow your brain.
Means testing pensions
Raise pension age - it was 65 in 1898. We've come a long way team.

Dont get me started on CGT, Land Tax, Stamp Duty. All things non Mickey mouse countries have.

Re pensions see Gaynor 2011

Ok - all that stuff is probably insignificant - its just fiddling around the edges. We've probably got to a point now where fiscal and monetary policy are no longer going to be effective at stimulating the economy. We have a vast pile of debt which our shared economies don't have the productive capacity to generate the earnings to pay back that debt. Something big is going to have to give very soon - if it isn't already happening around us presently - with glimpses of it making it to the media (e.g. NAB announcement yesterday). Massive defaults and debt restructuring. You wouldn't want to be holding debt right now is my only suggestion.

Means testing half of pensioners saves 11 billion a year, raising the age of the pension saves 22 billion per year raised. ( back of envelope)

If you dont think that's serious money I'm impressed.
And if you dont think it's something that's getting bigger/worse/ more unaffordable each year then you're not a student of demographics.

Responsible countries address these issues. We just handball them to the next generation.

She'll be right. A virus every now and then will sort it.

And who is going to employ the expansion of the elderly labour force this would entail exactly right now? The increase of the dependency ratio in the future is a real resources problem - will we be productive enough to support the economy with fewer workers, will we have enough retirement villages and hospitals? - not a financial one. The government cannot run out of money or "ammo". What we need is enough demand to return to encourage firms to invest in productivity. Right now demand returning requires huge fiscal support to employment and incomes. Firms invest when they expect an expansion of sales. Talking about austerity in any way shape or form right now is disastrous. Learn from the GFC.

I'm not averse to CGT or land tax, but stamp duty?

That just seems like shameless revenue gathering.

History will prove that not implementing a CGT was the smartest decision made by this government. A lot of Capital Losses are about to be incurred and carried forward against future tax revenues

I'm thinking the problem is, 'we cannot tax people who don't have any money', we can borrow and tell the same people not to worry about it but not forever.
Tax has to fall on those who can afford it and I'm still thinking that will be a simple asset tax based on GV's. In my business that will probably kill land values but they are to high for anyone but the rich and society needs at least to be seen as fair.

The curtain that hides a lot of large corporates, some smaller entities, set up in a way to avoid paying tax ,needs to be dealt with fast, no more Hong Kong based parking companies etc.

The Politicians saw the Capital losses coming thats why they backed off. Not rocket science was it

The Politicians saw the Capital losses coming thats why they backed off. Not rocket science was it

Crawl back into what ever hole you came out of with means testing of Pensions. Otherwise no Dpb,Working for families, Rental accommodation,Acc ect

Yes Income tax take will be diving, and revenue from fuel taxes and GST too. Anyone who receives helicopter money had better invest it well (rather than spend it) because the govt will be taking it back somehow, with interest, in the future.

Except there is NO WHERE safe atm, so might as well spend it.
If it must be done it must be spent in NZ.

Cutting GST would be hard to reverse once implemented. Also given the way GST is managed through the supply chain it is hard to adjust temporarily. It should be considered on the basis of whether it is good long term idea or not.
The purpose of helicopter money is to provide a short term monetary stimulus to get money recirculating in the economy. It should be assessed on that short term basis.

That raises the whole question of tax. The TWG blew it's chance by being too ideologically driven. GST was supposed to replace PAYE (but is a flawed premise anyway) but untrustworthy pollies from both sides of the fence railroaded that opportunity. This debate should be on-going and I am yet to find a credible argument against a comprehensive FTT.

Yes, and the other issue is, that if there is a monopoly in the supply chain anywhere that they will incrementally grab that 12.5% as their own.

As prices of certain products increase over time, it will be hard to tell if they are warranted due to genuine input cost increases, or just a greedy grab of the GST difference.

Was farming to a supplier today about ammo costs, his comeback was "but transport costs".
Well they have just gone back 20 years on the back of fuel. All my suppliers are about to get a hard time from me, fast to put prices up on any excuse let's see how they go on the other direct.

GST is 15%

Rubbish. the price of goods will stay the same. Retailers will pocket the GST

Hi Fritz
A penny saved is a penny earned! So basically the same effect isn't it? You will net money both ways, which you can still decide to save or 'fritter away' (whatever that means). Helicopter money is surely easier to implement and doesn't require 'repricing' everything nationwide...

What happens if we don't have the productive capacity to utilise all of this new money?

We haven't experience a war destroying all our factories and farms and commercial premises. We haven't had mass slaughter of people. We have ample and growing idle labour. If there is demand, we can supply.

So not worried about inflation?

No. Right now, worried about deflation. There may be supply issues in some sectors, but overall deflation is more likely. Think about it. With wage cuts and high unemployment there just aren't the discretionary incomes to support high prices.

Exactly. A lot of it would just get wasted on frippery.
I think that the money would be better invested in building houses. It would provide much needed jobs for a more prolonged period and provide much needed houses. Helicopter money would just get frittered away on less important things and a lot of it would go overseas by way of purchasing piles of Chinese rubbish that we don't really need. Helicopter money would quickly pass out of the economy to overseas countries, whereas money spent on housing would round and round in our economy and flow all the way back to our raw material producers. Besides which it would only need to be seed money because a lot if not most or all would come back to the government when the houses are sold. So the many billions of dollars that they would have otherwise spent on helicopter money would go orders of magnitude further spent on housing.

Mine would go on shares in DuPont and ADI.
Gunpowder is what's coming.

BUT that is what the Politicians want every one will feel good in the short term

My opinion - would rather see bail out money in the hands of people then pumped directly into big business, let the markets determine where it ends up .
Deploying the money at level 2 after all the smaller businesses have had a chance to open there doors,would provide a nice boost and perhaps not give people the chance to get the doomy gloomy's and save the money.

I agree. Put it in to peoples hands, not the banks or business's. The low end of the socio-economic spectrum will spend it on needs, the high end on luxuries (cafes etc) with some overlap. It just means it'll get well spread out. I do think it is a little too soon yet for it though.

I agree with all your points. The other benefit of helicopter money of a universal one-off money gift is its simplicity.
If it is done it needs to be at an alert level where people are free to go out and spend and firms are open and ready for business.

Helicopter money should not be considered until NZ reaches alert level one.
We need to get ourselves into a position where the message can safely change from 'stay at home to save lives' to 'go out and spend to kick start the economy'.
At the moment our full attention needs to be on stamping out the virus and tightening up our defences.
Once NZ has achieved alert level one I think there is some merit for a one-off helicopter money stimulus to get money recirculating in the domestic economy.
Psychologically for many it maybe harder to come out of the perceived safety of lockdown than we realise.
There is some evidence from history and overseas that excessive caution that doesn't properly assess risk can spread through the population.
The anology could be heart attack victims. It is vital to act quickly. To get to hospital quickly, to get treatment quickly (alert level four), but once out of ER, Surgery, ICU and the patient is in a safe and stable situation the recovery is about mobilizing quickly, good pain management and the patients own will power to push themselves...

When we are in level 2 makes more sense.

Maybe. If it can done safely.
Also at L2 are we allowed to travel outside of our regions?
It would be good to give the message that helicopter money can be spent on taking a NZ holiday....


While helicopter money is an easy button to push and we should definitely push it... I think we have a far bigger problem called NZ Inc. A relatively backward, reactive and easily intimidated group of employers, in other words. As we have seen post every financial crisis NZ Inc goes missing in action, preferring to hide in its mousehole till international commodity prices improve and when it does eventually emerge...its in far worse worse shape each consecutive time and stays that way more or less till the next crash. We need helicopter money AND better businesses!


Great points. In our isolated little insecure island bubble that is NZ we often like to self-congratulate ourselves, and that includes self-congratulating ourselves on our innovative businesses. That's deluded. We have innovation, sure, like ANY country. But a lot of our businesses ARE backward and reactive.


Sure we do have innovation just not enough of it and in many instances its literally stiffled to death by the entrenched businesses on NZInc who oppose the emergence of any threat to their cake walk. I see NZ Inc is now so out of fresh ideas thay are banging the empty cake tins again to allow wealthy foreigners to gain citizenship under the guise of investing in NZ businesses...sounds like more of the same direct foreign investment that has so many liquor stores and rental houses under foreign ownership...and hows that worked out for all involved?

Are those employers like that because it is too hard to get support from the banks? Just wondering. The Government is throwing money around, and despite their words, a very superficial scratch through the surface shows that this money is more about propping up the banks and the property markets. there are a number of commenters in these streams who identify themselves as business owners and employers, and who also identify how it continues to be difficult and very expensive to get support from the banks. I rather think that this is a significant problem in NZ?

It is a thing, from my international years I was astounded at how the rest of the world does venture capital and here we don't unless you own a farm and unfortunately the decision making that flows from farm derived capital is more often than not highly conservative...hence our best and brightest leave never to return. Fix that issue, we'll be a step closer to a decent economy. And it needn't be we resort to selling residency visas to wealthy foreigners, or becoming a tax haven like JK and the Panama Papers....capital is borderless...we just need to bring it to our shores in ethical and sustainable ways. Give me a thumbs up if you agree and perhaps Interest.co.nz will pick up on the topic.

Yes, bank policy in NZ goes something like:

Want to borrow for a house? Great, here's an obscene multiple of your salary.
Want to borrow for productive enterprise? Got property to use as collateral? No? Get f-d then.

Consequences predictable.

Too late looks like they have already dished out a lot of helicopter $ in wage subsidy.

AND Dont forget that it was borrowed money and will have to be paid back

Spending money we didn’t have got us into this predicament. How they think continuing to do will solve it beggars belief.

replied wrong place ....

Looks like the end of the long debt cycle as Dalio puts it. No further debt creation can be used productively - it can't generate sufficient income via goods and services creation to pay down that debt associated to it. Its a road to nowhere. Lowering rates doesn't help either as the same problem exists - economy can't create any further productivity from the cheaper debt...system could now collapse within itself.

Fiscal and monetary policy probably won't be able to have any further stimulating effect. The horse is well watered but can't run any further. Time to take it to the vet and get a new horse.

You do all know that this is a stupid idea right ? If they give you $1500 now your just going to be taxed $3000 or more in the future to claw it back. They were pitching this in the USA for a $1200 handout and it was estimated it would cost $6000 in the long run. Time to quit all the government financial meddling and run a true free market economy. The reason why we are in this mess in the first place is intervention with things like low interest rates to keep digging the hole deeper and deeper.

The current situation highlights that "free market" could never exists where money is controlled by the political power. We are trying to balance so many conflicting issues simultaneously and even if we manage to create a sort of balance despite all odds, the said balance will be so delicate that the slightest force in any direction is likely to shatter it. We want to have equality and we also want to have good competitive society, We want to have personal freedom and choice but we also want security and peace of mind. The list goes on.

You're too much of a hard core capitalist Believer. The free market must be scrapped becasue too many capitalists manipulate it. the markets need to be regulated.

Let me clarify. My assumptions are 1) we need to exchange goods and services 2) (1) requires determining a price. What I am talking about is about the price. I am not against regulating what goods and services are produced, their production standards, employer-employee relationships, etc. But I believe that a free market (where prices are determined by supply and demand) is the best mechanism for determining a fair price. I do not see how regulators do a better job in pricing. Sometimes you cannot have a free market (most common case is there is only one supplier or one buyer). Then other alternatives may be better in specific situations. But overall, a free market is the best mechanism to settle prices.
My belief in market determined prices does not mean that I do not believe that there are other things that are very important.

I also ask you to ponder about this: the industry most hotly hated in here, banking, is heavily regulated in NZ. Its activity is subject to license from the RBNZ. Their lending criteria, capital level and so many other things subject to their supervisor. And yet here we are. Blame the greedy bankers, but also remember this: this is a regulation failure as much as anything. When we talk about regulation, we automatically assume that it will be a "good regulation" that is at least better than what we currently have. But this is actually just hope. There is no guarantee for better regulation.

I partly disagree and agree. For a start banking in barely regulated at all. the government is afraid to regulate them. what regulation there is, is at the high end and doesn't stop them fleecing their customer base.

Price setting; to a degree i agree that the Government cannot, in isolation, set prices for products without reference to the industries involved and knowing where the prices are built from. Clear example often mentioned here is building products - significantly more expensive in NZ than Aussie but no real reason why other than gouging. But price setting can still be done

I am not that knowledgeable about construction industry. But the little I know, a lot of price gouging in NZ is due to its very small market that is spread out which make the country susceptible to monopolies (as I understand is the case for construction) or duopolies (as is the case for supermarkets, fuel and communication) , regulated industries that will prevent new players entering the market (e.g BRANZ for construction setting standards that only Fletcher can readily meet) etc. These characteristics will make any "price setting" very difficult. Most of what we use in NZ, we get from overseas. Even if we manufacture everything in NZ (a totally impossible task, and not only due to "economics"), we still need to import "raw materials" as NZ does not have anything really. This includes farming and primary industries.
I always think that monopolies in NZ where they make easy money due to lack of competition (banking, airlines, construction material, supermarkets etc) should pay a higher company tax than other businesses with competition (pretty much all of the SMEs). But I am afraid that they may increase their prices even more and there is very little we can do about it.

Why on earth would we be taxed double the handout? Given the current rate the govt is paying for bonds is below 1%? You're being absurd.

I know this isn't the gist of your article, and your dealings with the trust were maybe up to a decade after the original sell-off was made. But use of the term "win, win" stuck in my craw. The current electricity lines company 'Wellington Electricity Ltd', a subsidiary of Chinese company Cheung Kong Infrastructure Holdings Ltd.

If I recall correctly, interest.co.nz wrote an article on this company about how they were a leveraged asset vehicle paying zero NZ tax on huge NZ revenues. IIRC, was written not long after the Wellington storms of 2013.

Here comes the capital tax, I reckon

Probably no point - I don't see capital gains this decade. Do you?

Even for your share portfolio, I cant believe that

Haha we can have a general capital gains tax if you want one Houseworks as long as it includes all investment property (not the family home). How does that sound?

But I don't think we have the productive capacity to generate earnings to pay back the debt we have. And that is going to be problematic for us going forward. Its going to be like playing hot potato with debt and you don't want to be the one holding it while you can't generate the earnings to pay for it. Could get very messy.

So on shares - I don't expect great returns this decade. Robert Shillers CAPE modeling is one way of looking at it from a data driven perspective. Given the highs in P/E ratios, historically we should expect a decade or so of poor returns.

Question becomes - where do you put your money? Leave it in the bank and get negative real returns with the risk of a bank default? Put it in the share market and potentially lose another 50% of it the next few years? Buy a house and have a leveraged loss of potentially 50%? Buy bonds in the bubble with the risk they become worth less (worthless) as companies have no capacity to pay back the $$?

Then the debt value must be deflated. Keep interest rate low, print money, over the next couple of decades debt will significantly reduce. This off course reduces the value of everything, specially the assets. But we will pay those "debts".

But if we don't have the productive capacity to turn the increased money supply into goods and services we will end up with severe inflation. What to do? Raise interest rates...oh dear we can no longer service the debt.

Yes it's not the 1970s/80s, the luxury of inflating our debts away is no longer a viable option.

It was not a luxury back then either, most people when they criticize what happened since 1984, have forgotten the state of NZ economy in 70s and 80s. I did not mean that what i said is a good thing to happen, simply that by the way things are going this is what is likely to happen. And it will not be a good inflation from increased productivity etc. but a stagflation that is more like a malady than a cure.

Up to you... no point rehashing all the arguments for and against imo. I was responding to your comment there wont be any capital gains this decade. Obvs you dont really believe that.

Nice troll enjoy level 3!

When are people going to realise that there is no such thing as free money? Someone always pays, in the case of helicopter money, current and future tax-payers.

And if the central bank "pays" by keystroke and parks the government bonds in its balance sheet indefinitely. And there is no inflation? I suppose the energy used to keystroke the payments into the spreadsheet would be the cost. There are "free lunches" when you have spare capacity.

No, then the people who 'paid' are those didn't benefit from the deflation that would've otherwise occurred. Prices going down can be a good thing for those with (hard earned) cash.

Deflation - the cost of which is mass unemployment, human misery and ultimately pitchforks that confiscate the real wealth of those who profit from deflation. The wealthy, if they are serious about coming out of this unscathed and maintaining their ownership of the means of production had best heed the call for fiscal stimulus.

Gosh, you've obviously read the central bank text book lol. I can only guess that you're sitting on an unsustainable level of debt?

Funnily enough personally no I'm not My concern is about the effect on human lives of an unnecessary depression and mass unemployment. But a cursory understanding of sectoral balances show that the corollary of the ridiculous government surpluses in NZ in recent times (given a current account deficit) is a unsustainable build up of private debt to keep the show on the road. Our government needs to run large deficits to allow households to repair balance sheets. The alternative is mass default. Which will be ugly.

Ugly, but necessary to retain any faith in the concept of money / fairness in society. Sadly, people only seem learn lessons the hard way.

Exactly. The trick of the last forty odd years as practiced by the neolib supporters is to make damn sure it's someone else doing the paying while at the same time controlling the narrative that they are the only ones doing anything productive.

Helicopter money does seem to have had a positive effect in Australia post GFC. An increase in income for those likely to spend - low and middle income families - is IMHO likely to have a positive effect on demand. And if it is saved by some, it will at least help to repair household balance sheets allowing future consumption. The money does not have to be taxed back. It can be funded by the central bank buying government bonds and parking them in their balance sheet indefinitely. Helicopter money in a prudent form is highly unlikely to be inflationary right now.

Didn't just flow into housing speculation?

Check out Bill Mitchell. He has analysed the positive effect of the Australian cash payment in 2008.
"The effectiveness and primacy of fiscal policy – Part 1"

"Monthly growth in [retail sales] in December 2008 was 4.1 per cent while the average monthly growth over the period April 1982 to January 2019 (the current available data) has been 0.4 per cent.

Only once before was the monthly growth higher than 4.1 per cent (June 2000) and that was also associated with a fiscal intervention – the month before the GST (consumption tax) was introduced in July 2000. In that case, consumers brought forward consumption purchases before the tax would hike overall prices.

If I was looking for a single piece of evidence that the fiscal intervention increased retail sales I couldn’t find a better graph to demonstrate that."

Australia did do some other housing stuff if I recall - grants to FHBs etc - that probably boosted housing.

That's why you wouldn't reduce GST as consumers would defer expenditure until the cut was implemented, unless it was only on food

Yes, the issue is that if you increase demand for example housing (if that is what the money and grants were for) but not the supply at an equal timely rate, then all you do is give that away, and some. So if the amount is eg $10,000 then house prices will go up at least that much as soon as you get two purchasers wanting the one property and can go up even further as $10,000 on an LVR of 80% would allow you to borrow up to another $40,000 more.

I remember a comment back in 2001 after 9/11, the US Federal government gave everyone a helicopter drop of USD $500. A young 20 year-old single mother immediately used it on a holiday in Bermuda

My dumb suggestion would be to introduce a Welfare Debit Card (for want of a better title) that the $1500 is credited to and can only be used on locally produced goods/services and cannot be used to purchase overseas travel, or alcohol, or cigarettes, or imported stuff such as TV's

The old saw comes to mind: Government is bad when it comes to picking winners, and voters are good at picking losers.


And this one about democracy, in the USA, but could be applied anywhere.

HL Mencken said this in 1920

“As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

Yes, unfortunately media is already doing brainless stories today about people getting released to buy coffee and takeaway. NOT asking them, I notice, if they are keeping note of whom they contacted on a daily basis for process of tracing, if needs be.

Crucial criterion in L3 is how long is it taking on average to contact trace and isolate anyone in contact with a live case of CV19. Director General was NOT asked specifically what time scale per person is gold standard as they put it. It is under 2 days according to Dr Verrall report. Are we doing it in under 2 days for the remaining 350 people, or even the new cases? Not asked and no answer. Reporters really are amateurs and focussed on "human interest" for median idiot I am afraid.

Be VERY interesting to see, as in GFC, how ratings agencies and foreign exchange markets react to all this stupendous printing by governments. Are they going to start putting selling pressure on their currencies and debt markets? And insisting its all naughty governments getting into debt so we have to have more austerity?
If not, I will be gob-smacked. Yes, they are all in shit together right now, but soon enough the markets will start targeting who is weaker links to attack to make money at margin.

Yaay! sooner please, we need this Heli money, in addition to wage subsidy 70-80%.. for 4wks, (our employer took about 12 wks grant total) - We soon visit house viewing, I'm glad OZ/NZ embracing this F.I.RE industries, such as this news: (NOTE: OZ Banks will use the previous profits, to 'maintain the steady growth' of RE)

I listened to some of the COVID19 Select Committee meeting this morning. The guests were owners of small businesses - where there came a resounding call for help with cashflow - effectively helicopter money for SMEs.

It seems for many small businesses, the claw-back of tax on previous profits is of little/no use because they paid little company taxes (i.e., had very small profits). But I assume most of them will be paying themselves a salary and will have paid PAYE on that salary? Perhaps the govt should extend that claw back to the owners previous PAYE?

I also heard the suggestion from Cameron Bagrie that if cash flow assistance is to be provided, there should be a future payroll tax implemented for those that take advantage of the programme. I thought that a good idea as well.

I keep thinking that anything is better than helicopter money.

Hi Kate - I hadn't heard anything about the tax clawback, is that something that's already in play right now or is this one of the proposed options?

Can we call it what it really is, please?

It's helicopter debt.

Payable-for by future taxpayers.

Two points.
1. Half wouldn't buy into if the right PR spin wasn't put on it. I mean who doesn't like helicopters?
2. And the other 1/2 don't care what you call it.

I'm sure if you got yours, then it would be 'invested' more wisely than others.

Oh the irony, I call choppers flying coffins...

On a lighter note how about flying tbe helicopter every month :)

This current mess is one hell of a lot of proof we never recovered from the GFC. It's hardly ten years later and here we are....

$1500 per IRD number. Allocated through via banks who're instructed to quench debt before filling deposit accounts. High yielding credit card debt goes first, then mortgage debt. The country would be financially better off. It's Steve Keens idea.

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