The Distributional Effects of the Australian Cash Bonus Payments Response to the Global Financial Crisis

Abstract

This paper uses HILDA survey data to analyse the distributional effects of the cash-payments to low and middle income individuals and families, received as part of the 2008/09 Australian fiscal response to the Global Financial Crisis (GFC). The total package amounted to 5% of GDP, and the cash-payments 2%. More than 80% of working-age Australians, and 90% of households, received payments worth 4-5% of income on average. First, I compare estimates of the GFC income shocks to the bonus payments received. Second, I use error component models to examine how the bonus payments were related to alternative components of income.