Industry backs Rudd’s $42B package, Turnbull sours the spending spree

Prime Minister Kevin Rudd said last night in his address to the nation that the $42 billion package included the government’s largest ever single investment in housing, with more than 20,000 new homes to be built.“In this plan, we are investing in the future and investing also to support Australian jobs,” Rudd said in his address.Infrastructure Partnerships Australia executive director Brendan Lyon said yesterday’s announcement would see more than $29 billion invested in social infrastructure that can be developed in the short term. “This plan makes a $29 billion commitment to new and renewed facilities for defence, school, local roads and community infrastructure and is a welcome step to safeguard more than 90,000 jobs in the infrastructure and construction sectors,” Lyon said.“Infrastructure goes far beyond the construction of bridges and powerlines. The investment contained within this package for education and housing will ensure that we deliver short-term stimulus while meeting long-term social and economic targets.”Lyon said many local council projects were ready to go right now.“Local government currently maintains assets worth more than $150 billion, so the government’s announcement of $890 million to be invested in local community infrastructure is a sensible way to stimulate the economy while improving quality of life,” he said.Meanwhile, national construction body Civil Contractors Federation chief executive Chris White said the CCF welcomed the package, but emphasised the urgency in filtering the funds into the economy immediately, otherwise more jobs would be lost.Building and construction group Master Builders Australia said it backed all aspects of the government’s package, saying it was a timely stimulus that would maximise economic and employment outcomes during the global recession.“The plan should provide a boost to all sectors of the building and construction industry that is facing a slump over 2009,” MBA chief executive Wilhelm Harnisch said.Australian Constructors Association president Wal King said the plan would help stimulate Australia’s economy.“This is a very thoughtful and well-targeted program. However, we need to avoid the long lead times often associated with public sector expenditure to ensure that businesses are supported now,” King said.“The problems facing the Australian economy are the legacy of the international environment in which we operate and we are not going to solve those problems overnight.”Also in favour of the stimulus and commenting on the need for expediency in project implementation is global financial analyst and advisory firm KPMG.KPMG chief economist Brendan Rynne said the package contained a “good blend of incentives, investments and tax relief needed to stimulate economic growth”.“The package is very robust in terms of meeting the dual policy objectives of community capacity building while underpinning employment and activity in the vulnerable sectors of the economy,” Rynne said.“Stimulating our construction and engineering sectors will require this package to be implemented quickly.”However, the package is in doubt after Turnbull told parliament this morning his party would be opposing the stimulus, claiming it goes too far with its cash handouts and that more discretion was required in funds allocation.

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