x Abu Dhabi, UAETuesday 25 July 2017

Australia economy package blocked

An independent senator has joined the conservative opposition Liberal-National coalition against the spending plan of the Australian government.

The Australian Senate today rejected the government's proposed $42 billion (US$28bn) stimulus package designed to boost the economy in the face of the global financial crisis. But the prime minister Kevin Rudd told parliament the legislation would be reintroduced later in the day in "the national economic interest". After the defeat Mr Rudd said the government would not be deterred from taking "whatever action is necessary".

"For those reasons I formally notify the house that later today legislation will be reintroduced to advance this nation's national economic interest at a time of global economic crisis," he said. The bill was voted down when an independent senator joined the conservative opposition Liberal-National coalition against the spending plan of Mr Rudd's centre-left Labor Party. The government used its strong majority to force the massive package through parliament's lower house last week but independents and minor parties hold the balance of power in the Senate.

The package is designed to boost the economy amid the global financial crisis and Mr Rudd had urged its swift approval. The opposition vowed to block the legislation, saying it is financially irresponsible and will drive the budget deep into deficit. The package includes spending of $28.8 billion (Dh69.1bn) on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of $12.7bn to eligible workers, farmers and students.

The Opposition leader Malcolm Turnbull said his party's stance may prove unpopular with voters but he was not willing to saddle future generations with massive debts by rubber-stamping the government's plans. "Their package is too big," he said. "It's too much money, too much debt at this time. "I know this is an unpopular thing to say. I know we'll take a hit in the polls, but it's the right and responsible thing to do."

The Finance Minister Lindsay Tanner said the government needed to act quickly to avoid a looming recession. "If we don't respond vigorously ... there is going to be a lot more misery in Australia generally," he told public radio. The payout plan comes hard on the heels of a $10.4bn stimulus package released in December aimed at pensioners, low-income earners and others in a bid to boost consumer spending.

*AFP