Rudd ponders new stimulatory plans

Fresh stimulatory measures, that will drive the Federal budget into deficit, now appear to be inevitable.

Business groups, including the Australian Chamber of Commerce, are pressing for tax cuts.

And the government is listening, even though cutting taxes is not a particularly efficient way to boost the economy.

The Federal government’s decision to spend $4 billion, to support large scale  commercial construction projects, has shown that it is prepared to take unconventional steps  to preserve jobs.

Welfare groups, which met the Deputy Prime Minister, Julia Gillard, yesterday, are urging the government to increase unemployment benefits.

The government, understandably, prefers measures that will keep Australians in jobs.

That way, its own tax revenues are sustained.

The Finance Minister, Lindsday Tanner, says the Federal budget is probably still in surplus, but “only just.”

New measures, at this stage, would certainly drive it into deficit.

That suggests that the total cost of measures announced so far probably tops $20 billion.

But Australia is far from alone, in its stimulatory policies.

Both Germany and Japan announced big stimulatory packages, overnight.

In Japan, that included a cash handout to all Japanese citizens.

Australia will probably not go that far.

But the Prime Minister, Kevin Rudd, will start consulting State premiers today, on what should be done.

He will get plenty of help, there.

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