| Gillard’s DEBT creation scheme |
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Prime Minister Gillard has recently announced a so called “cash for clunkers” scheme which sees people receive a government cash payout of $2,000 if they trade in their pre 1995 car for a later model. This is touted as a novel way of reducing greenhouse gas emissions because new cars run better and have more up to date fuel injection techniques. What is not told to the general public is that it will actually result in an increase of greenhouse gas emissions due to the increased demand such a scheme would place on the car manufacturing industry. This is because metal has to be mined, processed, shaped, put together, and finally transported to point of sale. The process of making a car results in there being, per vehicle, more than half the amount of pollution the vehicle will produce in its entire lifetime; and is an argument to not encourage further exponential manufacturing of vehicles.A recent news article speaking of this “cash for clunkers” scheme states that the “car industry has welcomed the $394 million proposal to give motorists a rebate on trade-ins between January 2011 and the end of 2014.” Of course the car industry will have no complaint about this as they get to make more money. Let’s do the maths regarding this proposal. • At a rate of $2000 per person seeking to access this scheme and a starting float amount of $394 million, it will allow 197,000 people to successfully obtain the cash incentive. • As this is a trade in on a newer vehicle, it can be safely assumed that a loan amount of $25,000 (including interest) per successful recipient of the government cash incentive will be required to complete the deal. This amount will be the money made by private money lenders thanks to Prime Minister Gillard. • At $25,000 (loan amount) X 197,000 (successful recipients of government rebate) an amount of $4, 925,000,000 will flow directly to private money lending companies. One has to ask what the spotters fees are for this scheme. Those who are familiar with rental organisations (i.e. Radio Rentals, flexi rent, etc) will be aware of the offers they present occasionally to encourage customers to participate in their rental schemes, where they will offer a person a $200 cash payout if they rent something over $5,000; of which the $200 incentive is easily recouped in any interest charged on the $5,000 amount. What is happening with the Labor government is the same thing on a much grander scale. The policy direction of the FREE AUSTRALIA PARTY is to steer individuals and the country away from reliance on private money lending organisations to a more sustainable financial system, especially when it can be seen that the proposed solution is more a part of the overall problem than any much needed solution. The FREE AUSTRALIA PARTY supports the creation of “peoples bank” run and regulated "by the people" for the funding of schemes such as this as a way to provide a solution, and a way to break the strangle hold of large multinational money lending firms whose only concern is how much money they can make and how fast they can make it. A government should not be responsible for encouraging the people to enter into debt.
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