42 billion aus stimulus, page-15

http://www.theaustralian.news.com.au/story/0,25197,25002053-601,00.html


$42bn package to head off recessionFont Size: Decrease Increase Print Page: Print Christian Kerr | February 03, 2009
Article from: The Australian
TREASURER Wayne Swan has unveiled a $42 billion Nation Building and Jobs Plan to cushion the affects of the global economic crisis ahead of a major cut in interest rates expected later this afternoon.

The plan forms a double-pronged, electorally friendly strategy designed to shore up employment in the short term and complement long term infrastructure development.

The government says the initiatives in the package will boost economic growth by around 0.5 of a per cent of Gross Domestic Product this financial year and between 0.75 and 1 per cent in 2009-10.

“Without this significant and timely policy stimulus, Australia would face a more severe slowdown than forecast,” the government says.

It estimates the plan will support up 90,000 jobs over the next two years.

But predictions for employment remain gloomy, with joblessness forecast to rise to seven per cent by June 2010.

“The global commodity boom which has provided significant stimulus to the Australian economy over recent years has come to an end,” the Prime Minister and Treasurer said in a statement.

“No country will escape the impact of the global recession which is causing falls in growth, job losses and budget deficits right across the world.

“The weight of the global recession is now bearing down on the Australian economy. Economic growth is slowing and employment will weaken.”

The government says its response will strike the right balance between supporting growth and jobs now and deliver lasting investments needed to strengthen the economy into the future.

For every dollar spent providing immediate stimulus to the economy now, the government says it has invested more than two on long term investments to generate future growth.

As part of its long term measures, the government will build or upgrade libraries and halls in every primary school, special school and Kindergarten to Year 12 school across Australia. It will build 500 new science laboratories and language learning centres in schools that can demonstrate need and provide up to $200,000 to every Australian school for maintenance and renewal of school buildings.

The government will install ceiling installation free of charge in 2.7 million households.

It will build 20000 new social housing dwellings, fund maintence to around 2500 vacant social houses and construct 802 new Defence Houses around Australia.

Small business and other general businesses buying eligible assets will benefit from a 30 cent in the dollar investment tax break.

The government will spend $890 million to fund 350 additional projects under the Black Spot road safety program and the installation of around 200 new boom gates at high risk level crossings, as well as local community infrastructure and maintence on Australia’s national highway.

The government hopes a series of five targeted bonuses for low and middle income households will provide an immediate stimulus to the economy and jobs.

The payments are a Tax Bonus for Working Australians of up to $950 for every eligible worker earning $100,000 or less that will support up to 8.7 million people, a $950 Single Income Family Bonus to support 1.5 million families with one main income earner and a $950 Farmers Hardship Bonus for around 21500 drought affected farmers and farm dependent small business owners receiving exception circumstances related income support.

Some 2.8 million children will benefit from a $950 Back to School Bonus, while a Training and Learning Bonus will be paid to students and people outside the wrokfoce returning to study to help with the costs of education and training.

The government says the plan will build on the stimulus measures already in place to support economic activity and jobs.

“The global recession, dramatic slowing in China and unwinding of the commodity boom has now wiped a total of $115 billion from budget revenues and pushed the budget into deficit,” the Prime Minister and Treasurer said.

A budget deficit of $22.5 billion, or 1.9 per cent of GDP, is now forecast for this financial year.

Yet the government says this compares favourably to the seven per cent average for advanced economies forecast by the GDP.

The government says it is taking action to return to surplus by holding real spending growth to two per cent a year and banking any increase in tax recepts associated with the economic recovery, while maintaining its commitment to keep tax as a share of the economy on average below the level it inherited.

But it is also leaving all options open for further action.

“The government will continue to monitor the economy closely and is committed to taking further steps to support growth and jobs if required,” the statement says.