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$3.8bn infrastructure splash to boost economy
Following calls from the Reserve Bank of Australia to increase fiscal spending to help support monetary policy, the federal government has announced a host of new spending projects.
$3.8bn infrastructure splash to boost economy
Following calls from the Reserve Bank of Australia to increase fiscal spending to help support monetary policy, the federal government has announced a host of new spending projects.
The Morrison government plans to pump $3.8 billion into the economy through fast-tracked spending on road and rail projects, with states being asked to contribute the extra funding.
The $3.8 billion spending covers the four-year forward estimates, with about half coming in the next 18 months. Combined, the projects are designed to help boost the Australian economy.
“A strong economy delivers higher living standards for Australians all around this country. That’s why we believe in policies that drive a stronger economy,” Mr Morrison said.
The government will bring forward the outlays on major projects by striking agreements with the states to quicken the pace of construction.
The accelerated spending is worth $2.72 billion over the next four years and combined with $1.06 billion in additional funding to produce a $3.79 billion impact over the budget forward estimates.
But the impact is most likely to be modest when measured as a share of the country’s nominal gross domestic product, worth $1.8 trillion.
Last month, the International Monetary Fund (IMF) revised its forecast for Australia’s economic growth in 2019 to 1.7 per cent. The IMF advised Australia to spend more on infrastructure to boost the nation’s economy.
Populations, Cities and Urban Infrastructure Minister Alan Tudge highlighted that 130 federally funded projects were underway, employing 85,000 people.
Mr Morrison highlighted fiscal stimulus through $7.2 billion in tax cuts, which were announced in July.
While Mr Morrison announced an infrastructure boost to the economy, Mr Frydenberg announced policy reforms to help boost activity.
It’s not about throwing buckets of money. Mr Frydenberg highlighted the PC’s report on how to improve productivity through state and federal reform.
“There were 28 recommendations, including heavy vehicle reform, health service delivery, education, zoning and planning laws, stamp duty and land tax where no doubt you can shift the dial without throwing buckets of money,” Mr Frydenberg explained.
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