Thursday, May 21, 2020

Microcopter money in Palmerston?

The government is reportedly looking at "helicopter money" - giving cash directly to people to spend - as a way of stimulating the economy in the wake of the pandemic. But its not just central government: Palmerston North City Council is looking at the same thing, though on a much smaller scale:

Palmerston North ratepayers could be in line to get a $10 voucher to spend in shops in the central city.

Mayor Grant Smith and councillors have included investigation of the scheme in the city recovery plan, and will debate whether to go ahead with it next Wednesday.


People would be able to redeem their vouchers while shopping at central city retailers, although it was yet to be decided whether that would include supermarkets, which had continued to trade throughout the lockdown.

The scheme could cost the council up to $300,000 if everyone redeemed their vouchers. The source of the funding has yet to be decided.

$300,000 is not a lot of money as far as stimulus goes, more of a micro-copter than a helicopter, and focusing on ratepayers means a big chunk of it will go straight to landleeches rather than people. The push for contactless payment may mean that businesses may be reluctant to accept vouchers (in the same way they are reluctant to accept cash), and there won't be much of a multiplier effect as its illegal to include these vouchers even as a bonus to people's wages. Though in theory business owners could respend it, and the more they do, the better it would work.

Is this really the purpose of local government? Sure - its there to promote "the social, economic, environmental, and cultural well-being" of their communities. Economic stimulus falls squarely within that purpose, just as local economic development does. So, if the city council wants to buy people a coffee (because that's what it works out to per resident), I'm not going to object.