15 October 2008

Details of PM's stimulus package announced

Yesterday the Australian Prime Minister Kevin Rudd announced the details of his government's stimulus package designed as a counteraction against the global economic slowdown. The package will involve $10.4 billion dispersed between pensioners, first-time homebuyers and low to middle-income families before Christmas to increase consumer confidence and spending, reports the Associated Free Press.

Mr Rudd told reporters the global economy is hitting a new and dangerous phase that is affecting growth and employment worldwide, and it is his government's responsibility to protect the future of the Australian economy from the global fallout. 

Last week, Mr Rudd and the Treasurer Wayne Swan reassured the public the Australian economy "is better placed than almost any other developed economy to withstand the fallout," and that the IMF and the OECD have both confirmed their positive analyses of Australia's financial future and growth.

"The economy has stood up well to the ongoing global financial market turbulence.  So far, the financial sector has withstood the crisis thanks to prudent management, high profitability and strong capitalisation," said the authors of the OECD 2008 Economic Survey of Australia.

However, Mr Rudd believes the pre-Christmas gift to the Australian taxpayers – which is the equivalent to one per cent of the country's GDP – will secure the economic growth and confidence of the Australian nation.

The Government intends to "deal with the challenges of the global financial crisis, to support continued growth of the Australian economy and to provide practical help for households," by creating a substantial payout, Rudd said.

The Government will split the package amongst pensioners, low and middle-income families, carers and first-home buyers, with $4.8 billion for an immediate down payment on long-term pension reforms and $3.9 billion for support payments for low and middle-income families.  First-time homebuyers will receive $1.5 billion and $187 million will be invested in new training programs and new infrastructure projects.

Under the plan, single pensioners will receive a $1,400 lump-sum payment, carers will receive $1,000 additional payment for each person in their care, and first-home buyers will receive grants of up to $21,000 in a move aimed at stimulating housing activity.

On Sunday, the Prime Minister also guaranteed the survival of Australian banks by promising $700 billion over three years in bank deposits and the guarantee of all borrowings on the international credit market.

Mr Swan has said the package will be funded by the Government's wealthy surplus of $21.7 billion, and that around half of the surplus will remain for savings. 

"We have acted to strengthen our financial system and to strengthen the stability of our banks," he said.

Mr Rudd is also considering cuts to the migration quota next year in response to growing concerns of Australian unemployment; however, he told reporters the economic climate next year would be the deciding factor in how many people are allocated a visa for Australia during 2009-10.

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The Australian Visa Bureau is an independent consulting company specialising in helping people apply for an Australia visa.

Article by Jessica Bird, Australian Visa Bureau.