Do you ever wish you were still a child? At a time when the adult population has to worry about recessions, depressions, unemployment and bushfires, it may not be such a bad idea to dust off that time machine and scoot back 20, 30 or 40 years to a more ‘fun’ time.

But the good news is that you don’t need to go back in time in order to relive one element of your childhood. That’s because ‘Adult Pocket-money’ is the latest craze in town.

Not content to let you decide whether you spend or save your money, the idea now is not to give you a choice. You must spend it, no matter what. You don’t want to spend it? Tough luck, you must spend for your country. Your country needs you to spend.

The best way of doing that? Give the people their pocket money, not in cash, but vouchers instead.

We wrote last week that ration books could also be on the cards in the next phase of stimulus plans. If Australian Retailers’ Association (ARA) executive director Richard Evans gets his way that’s exactly what will happen.

But Mr. Evans isn’t thinking about himself, he’s thinking about the taxpayer. In his submission to the Senate enquiry on the ‘Nation Building’ package he said, “there is something uncomfortable to us about taxpayer funds being used to reduce credit card debt.”

Somehow it seems Mr. Evans was able to utter those words with a straight face. The earnest Senators most probably nodded in agreement with his enlightening comment.

Mr. Evans’ alternative proposal is of course much more sensible…


“[T]he government consider the use of one of two options, either a voucher system redeemable at a retail outlet or the use of the tax system with receipts of money spent which are redeemable through a system similar to the one Medicare uses.”

In other words, what Mr. Evans suggests is that instead of people being given back their own money, or being given a tax cut, the government should instead hand out ration cards. Clearly, according to Mr. Evans, it would be a terrible travesty for someone to make the conscious effort to pay off a credit card with interest rates of 17%, when they could spend it at a retail store. Hopefully a retail store that is a member of the ARA.

Can we assume that the ARA is so “uncomfortable” about credit cards that its members will no longer accept them as payment for goods? Not likely.

The statements from Mr. Evans are a perfect example of the impact that pressure groups have on government. They are also a perfect example of how at this very moment pressure groups are lining up to put forward their case to Senators on how best to spend your money - your tax dollars.

You only have to take a look at the roll call of the people giving evidence to the Senate. In the three days of questioning not a single person could be described as being a representative of tax payers.

On the first day all the witnesses were from Treasury and the Department of Finance. The second day saw twenty-eight witnesses called, all of them public servants grappling to get as much cash for their department as possible.

The third day - yesterday - was the turn of the pressure/lobby groups. The roll of honour included: trade unions, social services groups, business groups, education groups, and industry groups. Oh, and the Treasury were back for another go.

There were also a number of people attending in a private capacity. Well, that must be promising. Let’s see who they were: Professor Peter Dixon, Mr. Saul Eslake, Professor Warwick McKibbin, and Professor Alan Pears.

Hardly a cross section of taxpayers there.

Their views can be broadly categorized as the “something must be done” approach. In other words, while they may not necessarily agree with everything in the package, they are united in the belief that government is best placed to save the country from disaster.

The Senate enquiry is due to continue today, and we dare say there will be further submissions from all and sundry about how best to spend taxpayer money.

We can almost guarantee that there will not be a single advocate of cutting taxes and cutting government spending, especially seeing as 95%+ of the witnesses are directly or indirectly beneficiaries of government handouts.

You will read more gems from the enquiry in Money Morning tomorrow - if there is anything worth commenting on that is!

Other Stuff on the Markets

The Aussie dollar has rallied by nearly 10% in the last week since the latest interest rate cut. The market may now think that further interest rate cuts are less likely, or at least they may not be as large as initially thought.

Resources stocks continue to lead the charge upwards. In fact, however bad the news has been on the outlook for the global economy, the miners have continued to add to their share prices. Gabriel has his take on the Materials sector below.

Gold is still hovering around the USD$900 level, but the rise in the Aussie dollar has pushed the gold price down in AUD terms. It can only be a matter of time before it has the big push towards USD$1,000.