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Nine hundred big ones

My goodness it's been ages since I've posted on Money Confessions! Many apologies for my tardiness.

I must admit to being very excited about receiving an upcoming $900 payment as part of the federal government's $42 billion stimulus package.

I've heard some people say it's not the best plan; that the money should be spent on infrastructure projects; and that it will do nothing to stave off the worst effects of the global recession.

But despite all that - I'm still looking forward to seeing those nine hundred big ones land in my bank account.

The question is of course - do I fulfil the role the government wants me to fill in this situation - that of rampant consumer?

Do I take the $900 and buy a new lens for my camera, or a new bit of software for my computer, a new mattress or fancy new haircut? None of those items are things I need, but according to the government I'd be "doing my bit" for the country and the capitalist system as a whole.

Having said that, my credit card could do with an injection, having yet to fully recover from the holiday season. Essentially the money would be paying off my own mini-stimulating spend from December/January. There's also my mortgage, which would react kindly to a $900 hit.

Decisions, decisions.

If you're getting the $900 bonus, what do you plan on doing it?

And what do people make of calls to spend the money "at home" - that is, on items or services made in Australia - in order to keep the wealth here, rather than send it to China or elsewhere?

Tags: bonus, stimulus

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Replies to This Discussion

Permalink Reply by jacquesk on February 20, 2009 at 2:18pm

This is an email that has been doing the rounds. Hope it helps! :-)

Please also note that I do not agree with everything written here. For humor only.

Important Information on the Stimulus Payment

"This year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:

"Q. What is an Economic Stimulus Payment?
" A. It is money that the federal government will send to Taxpayers.

"Q. Where will the government get this money?
" A. From taxpayers.

"Q. So the government is giving me back my own money?
" A. Only a smidgen.

"Q. What is the purpose of this payment?
" A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

"Q. But isn't that stimulating the economy of China?
" A. Shut up."
_____________________________________________

Below is some helpful advice on how to best help the Economy by spending your stimulus cheque wisely:

If you spend that money at K-Mart, all the money will go to China.

If you spend it on petrol, it will go to the Middle East.

If you purchase a computer, it will go to India.

If you purchase fruit and vegetables, it will go to South East Asia or New Zealand (unless you buy organic).

If you buy a car, it will go to Japan.

If you purchase useless crap, it will go to Taiwan.

And none of it will help the economy.
We need to keep that money here. You can keep the money here by spending it at garage sales, going to a football game, or spending it on prostitutes, alcohol or tattoos, since those are the only businesses still here.

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Permalink Reply by rosamond on February 25, 2009 at 1:57pm

Excellent! I totally agree hehe. Therefore I am going to spend my money on:

- 2nd hand guitar
- tattoo
- sewing machine (the money will go to Taiwan though, unless I buy second hand...which I may do)

I am lucky enough to have no personal debt so I plan to spend nearly all my stimulus money.

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Permalink Reply by jacquesk on February 27, 2009 at 12:16pm

Sewing machine uses needles. Tattoo gun uses needles. All you need is a second hand sewing machine that can double as a tattoo gun. :-)

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Permalink Reply by rosamond on March 2, 2009 at 10:40am

Creative AND thrifty!

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Permalink Reply by jacquesk on February 20, 2009 at 2:25pm

I am not a fan of this part of the stimulus package. I agree that it would be better spent on infrastructure, or services within Australia that employ people. Having said that it will improve the bottom line of companies like Harvey Norman, JB HiFi etc.
For mine I will probably use it to get rid of personal debt. (and if you look at my picture you will see spending it on a haircut isn't an option.)

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Permalink Reply by Natalie Bochenski on February 20, 2009 at 3:28pm

What about wax, Jacquesk?

*runs away and hides* :)

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Permalink Reply by jacquesk on February 24, 2009 at 9:27am

I have 'natural shine' so I do not need wax. :-)

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Permalink Reply by Natalie Bochenski on February 27, 2009 at 2:20pm

Well I know where mine is going now - credit card to pay off some holiday flights!

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Permalink Reply by Fudge on March 2, 2009 at 3:23pm

bonus? what bonus???
The Gov should do more to provide some stimulus to the entrepreneurs who are the ones that stimulate the economy by creating jobs..
$900 bucks won't stimulate much other than the politician's popularity..remember, it has to be re-paid by someone???

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Permalink Reply by Natalie Bochenski on March 2, 2009 at 11:06pm

Hey Fudge,

I understand the government provided Pacific Brands with $17 million to "stimulate" their business by means of buying new machinery. Not a year later, they up and sack 1800 people.

Apparently they're having a re-think - but is it the government's job solely to support business in theses times? I mean, we are in a free market economy - rises and falls are part of the game, are they not?

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Permalink Reply by colin on March 2, 2009 at 9:53pm

Many people seem to be rejoicing on hearing that 900 'big ones' are coming their way. However, consider this. Celebrations for some - especially lower income earners with portfolios of dividend paying shares - may be a bit premature as the eligibility criteria is very heavily biased against them.

According to the ATO's 'tax bonus calculator' that can be found on it's web site, eligibility for those earning less than $100,000 pa is calculated by deducting the amount shown against Label G (tax offsets and other credits) from the total of amounts shown under Label A (tax on taxable income) plus Label O (Medicare Levy Surcharge) derived from a person's 2007/2008 Tax Return. In other words, to be entitled to the bonus one's adjusted tax liability (Labels A+O - G) MUST BE GREATER THAN 0 (zero).

Whether one is a low income earner or even in a higher income bracket, as long as his/her TOTAL tax offsets exceed tax on taxable income (the more dividend paying shares owned, the higher Label G will be as dividends are lumped/included with other tax offsets as credits under Label G), 900 'big ones' will NOT BE PAID.

Part of the Government's recent Joint Media Release mentions these 'one off cash bonuses' are directed 'to people and families who are doing it toughest ........' Seems as though many of 'those who are doing it toughest' will be doing it even tougher after they miss out - AND THIS COULD BE A WHOLE LOT OF PEOPLE - young, middle aged or nearing retirement; mostly lower income earners! Owning shares is virtually a National pastime these days.

The media appears to have also cottoned on to this anomaly - financial columnist Annette Sampson makes mention of it in Sunday's (1st March)Sun Herald for starters.

So, dividend paying shareholders beware, especially those on lower incomes. Even though you may be part of those who are 'doing it toughest' you may NOT be eligible for 900 big ones. However, your neighbor, even if he/she paid exactly the same amount - to the cent - of tax as you did for 2007/2008, because he/she has not committed the major sin of owning shares (and receiving franking credits) and/or incurring other expenses (eg claiming the medical expenses offset) WILL get a cash bonus whilst you are left scratching your head!

Obviously, the Government is aware of this. Just as obviously they are not shouting about this very negative aspect one of the 'key elements' of their $42 billion Nation Building and Jobs Plan from the rooftops as they have for the rest of this 'handout'. Like kicking someone when they're down - very un Australian!

Enjoy your bonuses, those who get them. However, spare a thought for those who, although 'doing it just as tough' as you may miss out - all because of some silly formula!

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Permalink Reply by JeffK on March 3, 2009 at 6:28pm

All this stimulus package nonsense is not going to stimulate the economy, it is merely going to put a massive burden on future generations to pay off the wasted funds. As if it wasn't going to be hard enough in years to come as Australia struggles under the weight of the ageing Boomers...