14 Oct 2008

Rudd announces $10.4b strategy to protect economy

6:03 pm on 14 October 2008

The Australian government has unveiled a $A10.4 billion package to buffer the country's economy against the global financial crisis.

Pensioners, families, and first-home buyers are the three big winners from the Economic Security Strategy unveiled by Prime Minister Kevin Rudd and Treasurer Wayne Swan on Tuesday.

The government also will speed up spending on infrastructure and almost double training places. Mr Rudd said it was time for fast, decisive action.

"The global financial crisis has entered into a new, dangerous, and damaging phase. That's why the government has decided to act decisively and early on the question of this economic security strategy for the future. (It's) decisive action, responsible action, early action, all in Australia's interests."

Mr Swan said Australia was in the midst of the worst financial crisis ever to confront the modern market economy.

The package follows Sunday's announcement of a three-pronged plan to further ensure the stability of the Australian financial system, including a government guarantee for up to $A700 billion in deposits.

Mr Rudd said the budget would stay in surplus.

Key measures

$A4.8 billion for an immediate down payment on long term pension reform.

$A3.9 billion in support payments for low and middle income families.

$A1.5 billion investment to help first-home buyers buy a home.

$A187 million to create 56,000 new training places in 2008-09.

Accelerate the implementation of the government's three nation building funds and bring forward the commencement of infrastructure investment.

Big winners

Australia's four million pensioners, carers and seniors will benefit from 8 December.

Single pensioners will receive a lump sum payment of $A1,400 while pensioner couples will receive $A2,100. People receiving the carers allowance will also receive $A1,000 for each eligible person in their care.

About 3.9 million Australian children will receive a $A1,000 one-off benefit from 8 December.

Families who receive Family Tax Benefit (A), families with children who receive the Youth Allowance, Abstudy or a benefit from the Veteran Children's Education scheme will be eligible.

First-home buyers will be eligible for grants of up to $A21,000 designed to stimulate housing activity.

The scheme will be time-limited. All contracts entered into by 30 June next year will be eligible for the new assistance.

The payment under the first-home buyers scheme will be doubled from $A7,000 to $A14,000 and first-home buyers who buy newly-constructed home will receive an extra $A14,000 taking their total grant to $A21,000.

The government will invest about $A1.5 billion in the housing market over 2008/09 and 2009/10 through this initiative.