Kevin Rudd reveals details of economic stimulus package

 GRANTS of up to $21,000 for first home buyers and payments of $1000 for nearly 4 million children were announced by Prime Minister Kevin Rudd today.

The federal government has announced a $10.4 billion package to help Australia counter the global economic crisis.

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Pensioners, low and middle income families, and first home buyers will be among the major beneficiaries.

Mr Rudd and Treasurer Wayne Swan unveiled the package in Canberra today.

Mr Rudd said the Economic Security Strategy would strengthen the Australian economy ``in the face of the worst global financial crisis since the Great Depression.''

The strategy includes five key measures, Mr Rudd said.

- $4.8 billion for an immediate down payment on long term pension reform;

- $3.9 billion in support payments for low and middle income families;

- $1.5 billion investment to help first home buyers buy a home;

- $187 million to create 56,000 new training places in 2008-09;

- Accelerate the implementation of the government's three nation building funds and bring forward the commencement of investment in nation building projects to 2009.

Australia's four million pensioners, carers, and seniors will benefit from December 8.

Single pensioners will receive a lump sum payment of $1,400 while pensioner couples will receive $2,100.

People receiving the carers allowance will also receive $1,000 for each eligible person in their care.

Mr Rudd said it was time for fast, decisive action.

``The global financial crisis has entered into a new, dangerous, and damaging phase,'' he told reporters in Canberra.

``That's why the government has decided to act decisively and early on the question of this economic security strategy for the future.

''(It's) decisive action, responsible action, early action, all in Australia's interests.''

Mr Rudd said the package would support growth in the domestic economy and provide practical support for households.

The government said about 3.9 million Australian children will receive a $1,000 one-off benefit from December 8.

Families who receive Family Tax Benefit (A), families with children who receive the Youth Allowance, Abstudy or a benefit from the Veteran Children's Education scheme will be eligible.

First home buyers will be eligible for grants of up to $21,000 designed to stimulate housing activity.

The scheme will be time limited. All contracts entered into by June 30 next year will be eligible for the new assistance.

The payment under the first home buyers scheme will be doubled from $7,000 to $14,000 and first home buyers who buy newly constructed home will receive an extra $14,000 taking their total grant to $21,000.

The government will invest about $1.5 billion in the housing market over 2008/09 and 2009/10 through this initiative.

Mr Rudd said the $10.4 billion strategy would be entirely funded from the budget and Treasury had advised that the budget continue to be in surplus after the measures are introduced.

The government will publish a full budget update in the Mid-Year Economic and Fiscal Outlook within a month.

Time to spend

Mr Rudd said it was time to spend part of the federal government's $21.7 billion budget surplus.

``The purpose of a surplus in the budget is to deal with tough time and tough times are with us,'' Mr Rudd said.

``Therefore the government intends to deploy this surplus in the ways in which I have just described.''

The government remained determined to take ``whatever action is necessary in the future'' to maintain stability of the Australian financial system and underpin positive economic growth.

Federal Treasurer Wayne Swan said Australia was in the midst of the worst financial crisis ever to confront the modern market economy.

``The sooner that governments act to protect their people the better,'' he said.

The government was taking ``decisive action'' and the package would act as a fiscal stimulus.

``This is an important package, an important strengthening of the Australian economy,'' Mr Swan said.

``We have acted to strengthen our financial system and to strengthen the stability of our banks.''
Australia was better placed than many countries in the current financial turmoil but was not immune to it, Mr Swan said.

Mr Rudd said the federal budget would stay in surplus.

``We're confident that we'll still be able to deliver a comfortable surplus going forward,'' he said.

The strategy was equivalent to one per cent of GDP, but Mr Rudd would not reveal what the updated projections were for Australia's growth and employment as the crisis unfolds internationally.

Australia could not afford to wait to take action to protect the economy, he said.

``If you are to learn anything from economic history it is this - at a time when economies need stimulus support, don't leave it too late.

The package would apply to all categories of pensioners and carers and was equivalent to about $35 a week for single pensioners, and $26 a week for each member of a married couple.

Mr Swan described the present times as unique.

``It's really important to understand that the world changed, changed dramatically, in the last couple of weeks,'' he said.

The government also has targeted spending on infrastructure and jobs and training in the strategy.

A total of $187 million will be spent to create an extra 56,000 training places this financial year.

The productivity places program will effectively doubled from 57,000 to 113,000, taking the government investment in training places since April to more than $400 million.

And Mr Rudd said the government would fast track its nation-building agenda.

Ministers will bring forward their interim infrastructure report so that work can start in 2009 in the key areas of education and research, health and hospitals, and transport and communications.

The government will be seeking pre-referral of the legislation for the nation building funds into a Senate committee this week.

'Huge bumps in the road'

Mr Swan said all nations felt a responsibility to work together to solve the financial crisis.

``As a result of what occurred on the weekend, all nations particularly the largest developed and developing nations, will now seriously consider that forward agenda,'' he said.

Mr Rudd said governments of the world must work together to boost global financial confidence.

``If ever there was a single message to the governments of the world that this is one planet it's this one.

``Part of the global confidence equation ... is for the markets of the world to see the governments of the world embrace a unified, uniform, consistent set of measures on liquidity, on capitalisation as well as regulation for the future and in the process not to go down the road of what we describe as 'Balkanised' regulation.''

There was ``a lot of work to be done yet'', he said.

``There are going to be huge bumps in the road yet it is not going to be even sailing.''