Of all the weddings that were celebrated last weekend, undoubtedly the wedding of the Deputy Mayor of Auburn in the western suburbs of Sydney received the most attention (from the media at least). It seemed that every news bulletin talk-show from Saturday afternoon on was carrying footage of the extravagant event detailing the luxury cars, motor cycles and other modes of transport that were, somehow, part of the grand scheme of the couple’s happy day.
Of course, a large part of the news commentary was focussed on the $50 million price tag for the big day with some undertones of “couldn’t that money have been put to better use/why waste that much”.
I am sure that the businesses that were lucky enough to have been asked to supply goods and services for this wedding believe it was a great outcome. They now have an extra $45 million in sales income and, in their Business Activity Statements, will be sending the other $5 million to the ATO as GST.
The employees and suppliers of those businesses will also be pleased with the increase in their incomes as a result of this newsworthy event. Income taxes will be paid as a result of the increased wages and profits so all-in-all this was a good news story.
It also provided me with an opportunity to comment on a couple of “side” issues.
The first is to note how confidence can flow through a community. Because this groom was confident that he could spend that amount, many people will benefit directly and indirectly. Imagine if we had a $50 million wedding in Rocky. I am sure that everyone would benefit in some way as that money passed through our community.
Whether a single event is enough to create a lasting improvement in a community’s confidence, I’m not sure but it would certainly create some improvement.
The second issue is the waste issue. The extravagant groom didn’t pile $50 million in the street and set fire to it. He exchanged it for (what he judged to be) equivalent goods and services which created confidence and increased incomes across the community. Cash has gone from his bank account and into other bank accounts – it hasn’t disappeared.
Thus, when we consider welfare payments which many regard as a “waste of taxpayers’ money”, the same logic applies. The money goes from the taxpayer to the government to the welfare recipient who then spends the money in local businesses to create profits.
I am not an economist – just an observer of economics but it seems to me that anything that can keep economic activity happening