Mr. Brumby yesterday announced that he will ‘stimulate’ 68,000 jobs through a capital works and training program. But in doing so he ignores the century’s old lesson of one Frédéric Bastiat; he ignores the unseen and only focuses on what is immediately in front of him.

The creation of these jobs is financed by taking money from the taxpayer. In doing so, their wages are reduced by the same amount that those of the building industry are increased by. In effect, there are no jobs created. All that will occur is a reallocation of jobs—as public spending is always a substitute for private spending. While it may well support one worker in place of another, it adds nothing to the economy when taken as a whole.

The claim that public infrastructure spending “creates jobs for the workers” is an incredibly dangerous proposition. It serves no other purpose than to automatically qualify the most absurd spending decisions. If a road or railway has sufficient utility to justify the capital outlay then that argument alone should be sufficient in justifying its creation. But if, as is the case with Mr. Brumby, that’s not possible to do, he’s forced to resort to the fallacious position of “creating jobs”.

When considering your support for these programs, ask yourself this: what would the taxpayers have done—and can no longer do—with the same billions that are now being spent on public enterprise. There’s no question that these projects will give jobs to certain workers. That’s what’s seen. But it deprives other workers of employment. That’s what’s not seen.