Page 533 - Week 02 - Tuesday, 10 February 2009
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It is important in times of rapid deterioration of the global and the Australian economies that governments act to stimulate the economy through measures such as the ones announced by the federal government last week. These measures are necessary to support jobs and to invest in the long-term growth of the nation and for us here in the ACT. Earlier this year the International Monetary Fund urged governments to take decisive action and to act without delay. The IMF noted that conventional monetary easing—that is, the cutting of interest rates—is not sufficient. Interest rate cuts alone will not cut it.
The IMF view was that fiscal policy—government spending—is also critical to bolster aggregate demand and to limit the impact of the financial crisis on the real economy. The IMF acknowledges that action required will imply significant deterioration in the fiscal accounts and result in budget deficits. The IMF recommends that fiscal packages should rely on temporary measures, and policy should be formulated with credible medium-term fiscal frameworks. In the words of the IMF, these frameworks should entail gradual fiscal corrections as conditions improve. Both the Australian government’s fiscal response and the ACT government’s response are entirely consistent with this framework.
Members are well aware that the federal government’s $42 billion nation building and jobs plan has a number of elements. Broadly, the plan provides an immediate stimulus of $12.3 billion through tax and transfer system and invests $28.8 billion in schools, housing, energy efficiency and community infrastructure. The plan also provides assistance for small business.
The Chief Minister has called it a visionary plan, and to assist an appreciation of the vision in the plan, it would be useful for me to provide some further details on the investment. There is $12.4 billion for every primary school in the country. Every primary school will benefit through a library or a multipurpose hall. There is $1 billion for science and language learning centres in secondary schools. There is $1.3 billion for a national school pride program, funding refurbishment and minor infrastructure for all primary and secondary schools.
The plan provides $6 billion for 20,000 new social housing dwellings and $400 million for the repair and maintenance of the existing public housing. This is visionary investment in the nation’s public housing system. The plan provides $3.4 billion for insulation of around 2.2 million of uninsulated owner-occupied homes and 500,000 rental properties. There is also $500 million for solar hot water rebates.
The plan supports business investment in general and particularly small business by providing tax breaks. The plan also provides tax bonuses for single-income households, farmers and low-income families with school children.
Madam Deputy Speaker, the plan will directly benefit the ACT in the order of $350 million. This includes $229.3 million in upgrades to buildings in every primary school and $102 million for social housing. The tax breaks for small business should help maintain the recent high levels of investment in employment in this sector, given that these businesses make up the majority of the private business sector in the ACT.
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