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Macroeconomic News
Australia govt faces upper house fight on stimulus
Tue, 3rd Feb 2009 23:37
By Rob Taylor
CANBERRA, Feb 4 (Reuters) - Australia's government faced a battle on Wednes
'Our motivation is to deliver these payments as quickly as possible, in the national interest, given the global conditions,' Treasurer Wayne Swan told state radio.
The plan includes A$29 billion for infrastructure, including A$15.5 billion to upgrade or construct school buildings. It will also underpin construction of 20,000 new homes, while keeping recession at bay with 1 percent growth in 2008/09.
The plan coincided with the Reserve Bank of Australia (RBA) cutting its key cash rate by 100 basis points to 3.25 percent, bringing easing since September to a massive 4 percentage points. Investors expect a further easing to 2.0 percent or less by May.
Prime Minister Kevin Rudd addressed the nation on Wednesday night and demanded Australia's six state governments, covering both the left and right of the political spectrum, cooperate with the stimulus rollout or face funding sanctions.
But the government faced a tough task in the national parliament, where conservative rivals hold the largest upper house voting bloc and the balance of power is held by a disparate group of green senators and pro-Christian independents.
'This requires prudence. The Senate is the watchdog of the taxpayers' dollar. It's quite unreasonable and imprecautious of ... the government to say we'll give you this legislation Tuesday night, Wednesday morning, and you've got to put it through by Thursday afternoon,' Australian Greens Senator Bob Brown said.
Conservative Opposition Leader Malcolm Turnbull said he was insulted by the centre-left government's demands for unobstructed passage of five bills making up the stimulus package.
'No time for proper debate, no time for proper scrutiny. The opposition would be irresponsible if it were to sign off on this A$42 billion of spending and other measures without having had the opportunity to consider it,' Turnbull told local media. Independent anti-gambling senator Nick Xenophon also said he would not rubber stamp the stimulus, setting up days of tense negotiations with Rudd and senior ministers.
Finance Minister Lindsay Tanner said he would 'stomp all over any bureaucratic impediments' and hoped infrastructure work would start by mid-year, with most work to be done in 2009-10.
'The quicker we get the money moving, the more impact we have on pushing back against these powerful international forces that are pressing down on Australia's economy,' Tanner said. 'Any delay just adds to that challenge.'
Stimulus spending announced since September 2008 now totals A$78 billion or nearly 8 percent of gross domestic product, and adds to a raft of packages developed in major economies.
($1=$1.55 Australian Dollar)
(Editing by Sanjeev Miglani) Keywords: AUSTRALIA ECONOMY/STIMULUS
(rob.taylor@thomsonreuters.com; Reuters Messaging: rob.taylor.reuters.com@reuters.net, +612 6273 3700)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CANBERRA, Feb 4 (Reuters) - Australia's government faced a battle on Wednes
day to rush an economic stimulus package past a hostile upper house of parliament, where rivals who hold the balance of power said the plan was poorly conceived. The government hopes to pass the $42 billion Australian dollars ($27.08 billion) through parliament by Thursday to speed cash payments to low and middle-income taxpayers by April, plus begin a sweeping overhaul of schools and national infrastructure.
'Our motivation is to deliver these payments as quickly as possible, in the national interest, given the global conditions,' Treasurer Wayne Swan told state radio.
The plan includes A$29 billion for infrastructure, including A$15.5 billion to upgrade or construct school buildings. It will also underpin construction of 20,000 new homes, while keeping recession at bay with 1 percent growth in 2008/09.
The plan coincided with the Reserve Bank of Australia (RBA) cutting its key cash rate by 100 basis points to 3.25 percent, bringing easing since September to a massive 4 percentage points. Investors expect a further easing to 2.0 percent or less by May.
Prime Minister Kevin Rudd addressed the nation on Wednesday night and demanded Australia's six state governments, covering both the left and right of the political spectrum, cooperate with the stimulus rollout or face funding sanctions.
But the government faced a tough task in the national parliament, where conservative rivals hold the largest upper house voting bloc and the balance of power is held by a disparate group of green senators and pro-Christian independents.
'This requires prudence. The Senate is the watchdog of the taxpayers' dollar. It's quite unreasonable and imprecautious of ... the government to say we'll give you this legislation Tuesday night, Wednesday morning, and you've got to put it through by Thursday afternoon,' Australian Greens Senator Bob Brown said.
Conservative Opposition Leader Malcolm Turnbull said he was insulted by the centre-left government's demands for unobstructed passage of five bills making up the stimulus package.
'No time for proper debate, no time for proper scrutiny. The opposition would be irresponsible if it were to sign off on this A$42 billion of spending and other measures without having had the opportunity to consider it,' Turnbull told local media. Independent anti-gambling senator Nick Xenophon also said he would not rubber stamp the stimulus, setting up days of tense negotiations with Rudd and senior ministers.
Finance Minister Lindsay Tanner said he would 'stomp all over any bureaucratic impediments' and hoped infrastructure work would start by mid-year, with most work to be done in 2009-10.
'The quicker we get the money moving, the more impact we have on pushing back against these powerful international forces that are pressing down on Australia's economy,' Tanner said. 'Any delay just adds to that challenge.'
Stimulus spending announced since September 2008 now totals A$78 billion or nearly 8 percent of gross domestic product, and adds to a raft of packages developed in major economies.
($1=$1.55 Australian Dollar)
(Editing by Sanjeev Miglani) Keywords: AUSTRALIA ECONOMY/STIMULUS
(rob.taylor@thomsonreuters.com; Reuters Messaging: rob.taylor.reuters.com@reuters.net, +612 6273 3700)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
