The Rudd Government's $42b Stimulus Package For Australia

[Conquistatore]

I want to introduce an interesting topic up for some debate and discussion. Please read below.

Media Statement - 3rd February 2009


Kevin Rudd

Wayne Swan


The Rudd Government today announced a $42 billion Nation Building and Jobs Plan to support jobs and invest in future long term economic growth.
This historic long term and targeted Nation Building and Jobs Plan is a further decisive step in the Government’s response to the severe global recession.
Treasury estimates that today’s Nation Building and Jobs Plan will support up to 90,000 jobs in 2008-09 and 2009-10.


Key measures funded by today’s Nation Building and Jobs Plan include:

• Free ceiling insulation for around 2.7 million Australian homes
• Build or upgrade a building in every one of Australia’s 9,540 schools
• Build more than 20,000 new social and defence homes
• $950 one off cash payments to eligible families, single workers, students, drought effected farmers and others
• A temporary business investment tax break for small and general businesses buying eligible assets
• Significantly increase funding for local community infrastructure and local road projects

The initiatives in the Nation Building and Jobs Plan will provide a boost to economic growth of around ½ per cent of GDP in 2008-09 and around ¾ per cent to 1 per cent of GDP in 2009-10.
By investing in jobs and long term economic growth the Plan strikes the right balance between immediate support for jobs now, and delivering the long term investments needed to strengthen future economic growth.
For every $1 spent providing immediate stimulus to the economy the Government has invested more than $2 on long term investments that will generate future economic growth.


The Global Recession

The world is now caught in the worst economic crisis since the Second World War, a crisis that has delivered recessions in the United States, the United Kingdom, Japan and the Eurozone.
The IMF is now forecasting advanced economies to contract by 2 per cent collectively in 2009. Growth has also slowed dramatically in key emerging economies, China in particular. All these factors have caused a rapid unwinding of the mining boom in Australia, with major consequences for Australian revenues, growth and jobs.
In fact the global recession has already pushed the Budget into deficit, even before policy action is taken. Decisive action is now required to strengthen the Australian economy and in these circumstances, a temporary deficit is the only responsible course of action to support jobs and economic growth.
National action alone cannot reverse the global forces buffeting the Australian economy; these global forces can only be fully turned around with a coordinate global response.

Long Term Nation Building Investments

Direct investment by the Government in goods and services has significant scope to boost economic growth and productivity and support jobs because it adds directly to demand. There are five major components of the Nation Building and Jobs plan.



Building the Education Revolution

• Build or upgrade large scale infrastructure, such as libraries and halls in every primary school, special school, and K-12s school in Australia.
• Build 500 new science laboratories and language learning centres in schools that can demonstrate need.
• Up to $200,000 to every Australian school for maintenance and renewal of school buildings.

Energy Efficient Homes

• Installing ceiling insulation in 2.7 million Australian homes which will cut around $200 per year off the energy bills of these households
• Reduce greenhouse gas emissions by around 49.4 million tonnes by 2020, the equivalent of taking more than 1 million cars off the road

20,000 Social and Defence Homes

• Build 20,000 new social housing dwellings and 802 new houses for the Australian Defence Force.
• Urgent maintenance to upgrade around 2,500 vacant social houses

Small Businesses and General Business Tax Break

• A 30 cent in every dollar investment tax break for small and general businesses buying eligible assets.

Black Spots, Boom Gates, Regional Roads and Community Infrastructure

• 350 additional projects in the Black Spot Program and the installation of around 200 new boom gates at high risk rail crossings
• $650 million funding boost for local community infrastructure and maintenance on Australia’s national highways

Immediate Stimulus to Support Jobs and Economic Growth
Targeted bonuses to low and middle income households will provide an immediate stimulus to the economy and support Australian jobs. In conjunction with the payments delivered as part of the $10.4 billion Economic Security Strategy announced in October, these measures have been designed to assist those groups most affected by the flow-on effects of the global recession.


The five one off cash bonuses includes in today’s plan are the:

• Tax Bonus for Working Australians of up to $950 paid to every eligible Australian worker earning $100,000 or less. This will support up to 8.7 million individuals.
• $950 Single Income Family Bonus to support 1.5 million families with one main income earner.
• $950 Farmers' Hardship Bonus paid to around 21,500 drought affected farmers and farm dependent small business owners receiving exceptional circumstances related income support.
• $950 per child Back to School Bonus to support 2.8 million children from low- and middle-income families.
• $950 Training and Learning Bonus paid to students and people outside of the workforce returning to study to help with the costs of education and training.

The $42 billion Nation Building and Jobs Plan builds on the stimulus measures already in place to support economic activity and jobs.
Stimulus measures already implemented by the Rudd Government include the $10.4 billion Economic Security Strategy, the $300 million program to build local community infrastructure, the $15.2 billion COAG funding package and the Nation Building Package announced in December 2008.


So now that we know all about the proposed stimulus package, what are your opinions about it. How do you think it will help Australia if indeed you believe it will. How will this package affect you and your family?


Personally, my partner and I will receive the $950 payout at some stage over the next month which will be a nice added bonus to our savings. Apart from that, the rest of the package will not really impact on us as we are renting and don't have any children. The investment bonuses to roads and infrastructure will be nice, however I fear these investments will not be in our area. Here's hoping that the package truly does increase GDP and help to slow down the recession in Australia at least.


Debate/Discuss.

[JP226]

42 billion??? HA!!!!! That's a drop in the bucket, be glad you aren't saddled with damn near 2 trillion in expenditures.

[Spartan90]

42 billion??? HA!!!!! That's a drop in the bucket, be glad you aren't saddled with damn near 2 trillion in expenditures.

42 billion is a lot in Australia.

I think putting the money into infrastructure, and into the construction industry is an excellent idea. Handing out a a near grand to every Australian with a job (then and extra 900 or so for each kid you have) is probably a waste of money. I know I personally am going to chuck that money straight towards paying off bills. That's not going to help the economy one bit.

Honestly, I personally think the majority will save, pay off bills, etc. Not spend it on a new plasma TV like the gov wants us too.

Still, glad that they want to put $50 per person towards the bushfire appeal.

[Exarch]

well i'm usually fine paying off bills

with that $$ i might end up usi9ng it the way the gov. wants me to use it
buying stuff, like new computer parts to run Empire on

[Conquistatore]

42 billion is a lot in Australia.

I think putting the money into infrastructure, and into the construction industry is an excellent idea. Handing out a a near grand to every Australian with a job (then and extra 900 or so for each kid you have) is probably a waste of money. I know I personally am going to chuck that money straight towards paying off bills. That's not going to help the economy one bit.

Honestly, I personally think the majority will save, pay off bills, etc. Not spend it on a new plasma TV like the gov wants us too.

Still, glad that they want to put $50 per person towards the bushfire appeal.

I agree that investing in Australia's infrastructure and construction industy is a good move. But I also agree that the $950 will most likely be saved rather than spent. It is a little hypocritical in my opinion. On the one hand you have the government saying cut down on water usage, cut down on power usage, save money, save water save the environment. Then on the other hand, the same government is telling us to spend spend spend by giving us this cash bonus. Go spend on a big screen T.V, or an air-conditioning unit in this heat. It seems sort of silly.

I think the one off payments we will be receiving should be cut to maybe $300 - $500 and the rest diverted into the bushfire appeal or to go towards improving industry and growth.

[Conquistatore]

I assume you are from the US? $42b is a fair amount for our small country of 21 million people. The reason your stimulus package is around 2 trillion is because this whole financial crisis started with the US and the housing market. Soon after that your stocks and credit fell and continue to fall. You guys need 2 trillion or more, we don't.

Your previous government's 'who cares' spending policy has plunged most of the world into financial ruin.

[Exarch]

i think it's great
as an australian i'm, entitled to 900 AUD to spend at my own leisure

[danzig]

Ill trade you contents of your stimulus package for ours....if that is the meat of your package atleast a) you know where the money is going and b) it seems reasonable and c) your politicans might actually be able to read the bill before voting on it.

[eddy_purpus]

Exarch .... I envy you =(
lol
Hey fell0w Americans...
are we getting a check from the government too ?
=o

[Spartan90]

Well if they want us to spend the money we are given, why don't they just put the money straight into retail, right where the government wants it? I think they money they are diverting to the bushfire appeal is commendable, but in an unbiased view - that is, if I personally wasn't getting $900 - they should put all of the $42 billion (minus a certain percentage for the bushfire appeal) into infrastructure and improving industry and growth, much like you said Conquistatore.

[Conquistatore]

What the government really needs to do is increase the money towards goverment rebates for solar power, water tanks and energy efficiency. If they want Australia to be green and it's citizens to respect and protect the environment, they need to get serious and empower homeowners with capital to fork out for these expensive services and upgrades.

That is where it all starts, with people living green they will inevitably turn green, meaning they will be more concious of the environment when they go to buy a big T.V or when they fill up their car with petrol.

I think this stimulus package is a really good idea, but I think some of the funds could be a bit better spent. Don't give out money to the people, they can't be trusted to do what the government wants them to do with it. Invest it into rebates and divert more money for infrastructure and upgrades to industry and homes.

[Thanatos]

Does the money the Australian government is providing even exist? I'm a bit in the dark when it comes to Australian politics and economy, so somebody please educate me.

[Spartan90]

Does the money the Australian government is providing even exist? I'm a bit in the dark when it comes to Australian politics and economy, so somebody please educate me.

I'm not 100% certain, but I have a feeling either this stimulus package will put us into debt, or that expenses later on this year or early next will put us into around -$20 bil. Don't quote me on this, I just remember hearing it on the news one groggy morning.

[Yojimbo]

and yet they waste money on useless internet filthering.

[Don in the North]

The money certainly exists. its a collection of taxes accumalated by the previous government with their many, many taxes, which were among the highest in the world, which basicly add up to 2000 dollars contributed from each of the 21million occupants.
however not all of them are actually taxpayers so, its more likely to be somewhere in the area of 3.5grand per taxpayer, putting this money up for distribution.

[Nouvelle Vague]

Woot being a student $900 bucks for me

[Conquistatore]

Certainly the money exists. About the only good thing to come from the Howard government was a nice budget surplus. Shame it is all but spent, but I guess desperate times calls for desperate measures. I only hope we see some real gain from it and that it is not just a waste.

[Spartan90]

When are we looking at getting this $900?? Any time soon? Or will it be going through parliament for the next 12 months...

[boofhead]

I believe it's passed and we get the money in April or thereabouts. I'm in for a fair wad of cash I must say, what with 3 kids at school and me not being rich. I'd say we'll get around $4000, then in July well collect more from the govt at tax-time.

Yay!

[Spartan90]

I'd say we'll get around $4000

Holy crap!! So there is an upside to having kids

So how are we going to use this $900 or in Boofhead's case, $4000 to boost the economy? Got this email today to answer that question...

Q. What is an Economic Stimulus Payment?

A. It is money that the federal government will send to Taxpayers.

Q. Where will the government get this money?

A. From taxpayers.

Q. So the government is giving me back my own money?

A. Only a smidgen.

Q. What is the purpose of this payment?

A. The plan is that you will use the money to purchase a
high-definition TV set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China?

A. Shut up.
_____________________________________________

Below is some helpful advice on how to best help the Economy by spending
your stimulus check wisely:

If you spend that money at K-Mart, all the money will go to China.

If you spend it on petrol it will go to the Arabs.

If you purchase a computer it will go to India.

If you purchase fruit and vegetables it will go to South East Asia or
New Zealand (unless you buy organic).

If you buy a car it will go to Japan.

If you purchase useless crap it will go to Taiwan.

And none of it will help the economy.

We need to keep that money here. You can keep the money here by
spending it at garage sales, going to a football game, or spending it on
prostitutes, beer or tattoos, since those are the only businesses still
kept here.