Australia’s Rudd unveils $7.3 billion stimulus plan
Written on October 15, 2008
The Australian government unveiled an emergency A$10.4 billion ($7.3 billion) stimulus package on Tuesday to guard the economy from a global slowdown and boost consumer confidence.
Prime Minister Kevin Rudd announced the package, worth about one percent of gross domestic product, just two days after the government guaranteed all bank deposits for three years, and wholesale funding to Australian banks, to protect the banks from fallout from the global credit crisis.
“The global financial crisis has entered into a new, dangerous and damaging phase, one which goes to the real economy, growth and jobs. That’s why the government has decided to act decisively and early,” Rudd told reporters.
Australia’s move came as Japan unveiled steps to stabilize its financial markets, lawmakers in the United States pushed for a new stimulus package to head off recession, and authorities in Europe moved to shore up their banks.
Japan, the world’s second-largest economy, last month also announced a package to help small businesses and individuals cope with high oil and food prices, including 1 approved payday advance in seconds.8 trillion yen ($16.8 billion) in new spending — roughly 0.4 percent of GDP.
China has also increased value added tax rebates to textile exporters, and state newspapers say contingency planning for a fiscal stimulus package is under way.
The Australian stimulus package delivers pre-Christmas cash payments to pensioners and low and middle income earners to help fight sagging consumer confidence in Australia, and provides A$1.5 billion to bolster the country’s housing and home building markets.
The package comes a week after Australia’s central bank cut official interest rates by 100 basis points to insulate the economy from a global meltdown, but analysts said the new package would not stop further rate cuts by the Reserve Bank of Australia (RBA).