24 January 2009

Saving jobs, savaging filmmakers

In Parliament this week were two important announcements. The government in Budget 2009 announced a slew of schemes to cope with the economic downturn, but something is still missing. And then they showed how insincere they were when they spoke of freeing up media. Full essay.


Anonymous said...

I was just wondering what percentage of the $5.1 billion set aside for jobs credit will go towards GLCs, and if any of the money will go to stat boards and other government-linked bodies. If so, the actual amount set aside should not really be that much, since such GLCs etc have no real need for the jobs credit payment to retain jobs.

natasha said...

totally agreed on the need for a social security net, and the step backwards (didn't think one would be possible) on political films.

but the wage subsidy? I don't understand why you think it is either bold or good. somewhat off-the-cuff, some of its less-than-optimal features:

1. zero stimulus. it does nothing to boost spending capacity. IF it prevents someone losing their job then you can say it preserves spending power, but that is hardly a bold step in a recessionary environment

2. for the reasons you note, it seems implausible that it will really prevent retrenchment - 88% of salary cost for an un-needed employee is not something most businesses will bear. or should..

3. IF it works to keep jobs it arguably will make necessary adjustments stickier. if a firm needs subsidies to stay afloat, it should do something else. of course, subsidies are all the rage these days, but it doesn't make them a good think.

4. as a subsidy, it is completely non-strategic. it is a handout to firms that are doing ok (a socially regressive handout); and it doesn't do a single thing to help steer the economy towards restructuring to newer 'sun-rise' industries.

5. a real govt jobs scheme for the retrenched would surely be better, both in terms of macroeconomic impact and immediate welfare