Australian Government Fiscal stimulus programs and gambling activity levels; an analysis of high-ethnic and low-ethnic communities

Abstract

The appropriateness of fiscal stimulus programs has come into question in light of the Global financial crisis. Indeed the austerity movement has called into question the economic benefits of large public spending programs. There is, however, a genuine dearth of research considering the impact of fiscal stimulus activities employed during the global financial crisis on spending behaviours, particularly when considering Australian stimulus programs. Much of the extant literature focuses on key matters such as quantitative easing and credit easing. The extant literature relating to fiscal stimulus research is typified by the utilisation qualitative methods to analyse the impact of the stimulus on economic activity. Most studies concern themselves with a handful of pertinent macroeconomic factors in an effort to surmise whether any possess any explanatory power, employing qualitative frameworks for analysis. The current study considers the impact of a discretionary stimulus program is affording a once off payment to Australian citizens on spending behaviour specifically the study shall consider the impact of government stimulus activities on gambling behaviours. Employing dynamic panel estimation methods, specifically the system GMM estimator, the study finds that fiscal stimulus significantly increased gambling activity in Australia, pertinently noting differential impacts within high ethnic and low ethnic communities.