PM signals business credit boost

The Prime Minster Kevin Rudd is signalling extra help for  Australia’s credit markets.

“We will continue to work in partnership with the private sector to do what we can to support Australia’s credit markets.” he said in Adelaide last night.

Mr Rudd said the government had already developed “a special purpose” credit vehicle to assist the car industry.

It did that after foreign financiers left the country.

He said, too, that Australia’s banks are still finding it difficult to raise funds overseas, as a result of the global credit crisis. And  the credit they can get is expensive.

“For example, the banks’ cost of obtaining real credit remains double what it was in early September,” Mr Rudd said.

“The withdrawal of foreign bank lending, the tightening in domestic bank lending and the dramatic falls in stock markets are all hurting the real economy,” the Prime Minister said.

He said there had been a sharp downturn in the growth in business debt in Australia.

“When business cannot get loans and are not confident about the future they can’t, or won’t invest.”

And that meant they can’t create jobs and can’t grow.

“The supply of credit affects real busines and affects real jobs,” Mr Rudd said.

He gave no indication, though, of either when the boost would be delivered or how big it would be.