States urged to spend $40b on infrastructure to lift economy out of recession
Reserve Bank governor Philip Lowe says the states need to do more to revive Australia’s nosediving economy and is urging premiers to follow his advice for a massive spend on major projects to create jobs and lift the country out of recession.
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STATES need to do more to revive the flagging economy and will again be encouraged to do more at Friday’s National Cabinet now the country has dropped into a stark recession.
It follows devastating economic figures on Wednesday revealing the economy crashed a record-smashing 7 per cent in the June quarter.
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Reserve Bank governor Philip Lowe at the last National Cabinet urged state premiers to do more to stimulate their economies, suggesting they splurge another $40 billion on major projects over two years.
Taking advantage of record low interest rates to build infrastructure is key to his advice.
There is also growing speculation the Federal Government will bring forward the second state of tax cuts in its own bid to inject life into the economy and shock it out of the recession.
A further economic update will be delivered to the premiers on Friday.
The State Government will deliver its own economic update on Monday.
Treasurer Cameron Dick has already revealed Queensland’s debt figure will reach $100.7 billion by June 2020.
Prime Minister Scott Morrison will deliver the economic update to the premiers, after the nation fell into its first recession in 29 years.
Opposition leader Anthony Albanese yesterday accused the government of making the recession “deeper and longer than it needs to be” by cutting JobKeeper by $300 a fortnight from next month.
“Australians are going through the toughest period of their working lives. A million are unemployed, another 400,000 will join them before Christmas,” he said.
Mr Morrison said the government had committed $300 billion in economic support during the pandemic and into the future, including extending the wage subsidy until March.
“We must be sure that the supports we put in place to get Australians through don’t become a barrier to them (and) to those businesses to be able to attract employees,” Mr Morrison said.
Treasurer Josh Frydenberg said health restrictions and lockdowns were behind the catastrophic economic fall.
“The Australian way of life was effectively put on hold through that June quarter. Mr Speaker, this is the impact of a once-in-a-century pandemic on our national economy,” he said.