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New Australian Stimulus Package Gains Approval

by Mary Swire, Tax-News.com, Hong Kong

16 February 2009

The Australian parliament has given the country's Prime Minister Kevin Rudd the green light to begin implementing an economic stimulus package worth AUD42bn (USD27.4bn).

The package gained last-minute approval from the Senate after the Prime Minister pledged to reduce cash handouts in favour of greater funding for environmental issues.

Rudd spoke of his intention to introduce the stimulus package earlier this month, announcing that, if approved, it would focus on supporting jobs across the country in a bid to stave off the threat of recession.

Under the new package, the government will immediately begin to plough around AUD28.8bn into schools, housing and infrastructure, whilst handing out a further 12.7bn to workers, farmers and students and implementing tax breaks for small businesses.

Speaking in greater detail about the measures earlier this month, the government explained that they aim to:

  • Implement 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;
  • Award a AUD950 one-off cash payment to eligible families, single workers, students, drought effected farmers and others;
  • Introduce a temporary business investment tax break for small and general businesses buying eligible assets; and
  • Significantly increase funding for local community infrastructure and local road projects

The Treasury has calculated that they expect the package to bolster around 90,000 jobs in the country, whilst increasing economic growth by nearly 1.5% over the next 12 months.

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