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Economy security package is timely, targeted and temporary

17 October, 2008

“The Government’s $10.4 Billion Economic Security package provides timely insurance for the local economy against the risks from the global crisis and equally timely support against the impacts of flat and weakening domestic economic activity.

These spending measures will complement the recent interest rate reductions and steps to underwrite confidence in our banking system,” Australian Industry Group Chief Executive Heather Ridout has said.

“The package is timely, targeted and temporary, largely satisfying the accepted criteria for good fiscal stimulus measures.

“The measures will have a rapid and timely impact on consumer spending and in the housing sector and will provide a boost to employment in these and related sectors.

“The measures are aimed largely at low and middle income households.  These households often bear much of the burden of sudden downturns and in this sense the measures are appropriately targeted.

“These spending measures are unlikely to have a significant impact on underlying inflation.  They are a one-off or temporary injection of cash and as such should have minimal ongoing impacts on the structural surplus, inflation or interest rates.

“Critically the policy measures outlined do not undermine our ability to effectively address the important longer-term challenge of lifting productivity by improving our education and training record, lifting our innovation performance, investing in high-value infrastructure projects and fixing the federation. 

“We also welcome the additional new training places. It is encouraging that the take up of the productivity places has been so positive and very encouraging that the government has acted to meet this demand.  The 10,000 new structural adjustment places to be made available to help displaced workers in the automotive and manufacturing industries are also most welcome.  Of course it remains vital that the overall allocation of training positions is aligned to economic needs,” Ridout added.

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