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THE Federal Government has unveiled a massive $42 billion nation building and employment plan aimed at retaining 90,000 jobs over the next two years and insulating Australia against the worst of the global economic recession.
Billed as a rapid response to the deteriorating global economic conditions, the centrepiece of the plan is $28.8 billion of spending on schools, housing, energy efficiency in homes, community infrastructure and roads, and support to small business to be delivered mostly in 2009-10 and 2010-11.
The remaining third of the plan is an immediate injection of $12.7 billion in one-off bonus payments of $950 each for low- and middle-income households and individuals through five bonuses to be paid in the next few weeks through either the Australian Tax Office or Centrelink.
It means 8.7 million workers earning $100,000 or less will receive a lump sum payment of up to $950 each from April.
About 1.5 million single-income families will also receive the payment, provided they receive Family Tax Benefit Part B, in the fortnight beginning March 11.
The unemployment rate is predicted to rise to 7 per cent by mid-next year, up from 4.5 per cent in December.
The package includes:
- $12.7 billion for immediate one-off payments to working Australians, families with school-age children, farmers, single income families and for those undergoing training;
- $14.7 billion to be invested in school infrastructure and maintenance and bringing forward funding for trade training centres;
- $6.6 billion for to increase the national stock of public and community housing by about 20,000;
- $3.9 billion to provide free insulation to 2.7 million homes and solar hot water rebates;
- $890 million to fix regional roads and blackspots, to install railway boom gates and for regional and local government infrastructure;
- $2.7 billion small and general business tax break to provide deductions for some equipment purchases before the end of June 2009.
Budget into deficit
The Budget is now expected to sink into a $22.5 billion deficit in the 2008/09 financial year, a massive deterioration from the $5.4 billion surplus projected in MYEFO, and deepening into deficits of over $30 billion in the following two years.
Gross domestic product (GDP) is now expected to grow by just 1.0 per cent in the 2008/09 and by only 0.75 per cent the following year, compared with respective forecasts of 2.0 per cent and 2.25 per cent made in November.
The unemployment rate is expected to surge to 7.0 per cent in 2009/10.
The latest stimulus package - Nation Building and Jobs plan - will invest $28.8 billion in schools, housing and roads, and handout $12.7 billion in payments to low- and middle-income earners, while aiming to support 90,000 jobs during the next two years.