Australians have never had it this good, with the promise of more money heading their way in due course. The government is hoping that a lot of this money will be spent in stores and subdivisions preventing the country from a recession.
The Federal Government announces that it would inject a further $42 billion into the economy on the same day as the Reserve Bank of Australia cut its interest rate by one percentage point.
The government injecting these large amounts of money into the economy can only be an indication of what is not going to take place such as investment by business, export orders, and the creating of jobs.
The daily Telegraph reports that Prime Minister Kevin Rudd announced that $28.8 billion would be spent on schools and supporting small businesses.
The Prime Minister also announced that a further $12.7 billion in cash bonuses of $950 would be paid to struggling families and farmers and stated that this was not a question of choice but what the government was required to do. Mr. Rudd admitted that there was no silver bullet in any of the government's initiatives. The second stimulus package which the government is due to release will only reduce the impact of the financial crisis it will not remove the problem.
Malcolm Turnbull Leader of the opposition stated that the opposition was not opposed to the pro-active and creative approach but that the government had to use the taxpayer's money wisely, and that the Budget had gone from a $22 billion surplus to a $44 billion deficit over a period of 9 months.
Glenn Stevens governor of the Reserve Bank of Australia said that the combination of rate cuts and the Government spending would help to ease the Australian economy from the contractionary forces coming from abroad.
Unemployment is currently at 4.5 per cent although it is now forecasted to reach 7 per cent by the next financial year.
Bernie Brookes Myers' CEO stated that the reduction in mortgage rates was a good thing as it was one thing less for people to worry about. Mr. Brookes also went on to say that giving people $1000 to spend would only have a short-term benefit as we saw with the December sales figures.
Australands' general manager for residential Tony Pizzolato, was pleased with both the Federal Government and the RBA and stated that the extra rate cuts and the Governments payments would help sustain a 20-30 per cent improvement in Sales that began in October with the increased first home buyers grants.