Posted November 13, 2019 16:29:58As the world looks at the economic impact of the Trump administration, the Government has been quick to push the economic modelling to set the agenda.
Key points:A new definition has been put in place for economic stimulusThe Government is already looking at the definition of economic stimulus to set its prioritiesA new “economic stimulus” is defined as a reduction in the cost of goods and services and is seen as a “substantial, positive, or stabilising” factorThe Federal Government is set to launch a review of the CaXA definition of stimulus on Wednesday morning, with Treasurer Josh Frydenberg saying the review would focus on a “re-evaluation of the definition” of the word.
“The Government will be looking at whether it is possible to make a definitive statement about what a stimulus is and how it works,” he said.
“We’ll also be examining the definition, and whether the definition itself is the right one, to see if it’s right for the job.”‘
It will be a massive boost to the economy’The review will also consider whether it would be a “massive boost to our economy”.
“We’ve looked at this very carefully,” Mr Frydenberger said.
“And the answer will be yes.”
The definition for stimulus has been set by the Federal Reserve.
The Reserve defines stimulus as “the change in a country’s output, prices, and employment that is due to a stimulus”.
“That’s the key thing to understand about what stimulus is,” Mr Turnbull said.”[It] means the cost to the Australian economy.
That’s the difference between a stimulus and a recession.
It will be very important for us to have that right definition.”‘
We’ve already had some positive steps’The Government has already taken steps to reduce the burden of the cost-cutting measures.
“Our Budget announced in July to spend $300 million in the next two years to help people and businesses cope with the impact of this budget, we have already started to do that,” Mr Abbott said.
Mr Frydenberry said that was the result of “a massive investment” in infrastructure and the removal of tax breaks for companies that were planning to relocate abroad.
“It’s going to be a huge boost to Australian economic growth,” he told the ABC.
Mr Abbott has said the new definition would be “the biggest boost to jobs and economic growth”.
“If you’re an Australian company that wants to go overseas to make this money, you’re going to get a boost from the new economic stimulus,” he has said.
But the new federal definition is not a new one.
The definition was first put forward by former Labor finance minister Josh Fryda, who said the Government needed to set up a new “stimulus mechanism” to ensure Australia had “a fair and credible mechanism for ensuring we have a balanced budget”.
“What we’ve got to remember is that we’ve already seen some positive results,” he explained in his book ” The Big Short: How We Killed the Global Economy .”
“I’m not a macroeconomic expert, but I can tell you this: If we can get a framework that’s a little bit more precise and a little more flexible, we’re going a long way to helping the Australian people.”
The Government and the Reserve Bank have previously been in talks about the definition.
The Federal Reserve said it was not aware of any specific measures being considered, but said it would “look closely at the discussion” with the Government and will make its views known when it returns from the October recess.
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