Lessons from the recent economic crisis: the Australian household stimulus package

This paper provides an impact evaluation analysis of the 2009 Australian Household Stimulus Package, which was composed by three main cash payments: the Back to School Bonus, the Single Income Family Bonus and the Tax Bonus for Working Australians. Using panel data from the 2008 and 2009 HILDA surveys, the results show that these cash payments reduced the risk of poverty and stimulated consumption expenditure. Nonetheless, only the Back to School Bonus and the Single Income Family Bonus were really important in achieving these goals, while the Tax Bonus for Working Australians did not contribute to stimulate consumption and failed to reduce the risk of poverty. Thus, the analysis confirms the crucial role of governments to protect the most vulnerable groups avoiding a dramatic deterioration of social outcomes and favoring a fast economic recovery when interventions are timely and well-targeted.