The BCA welcomes the focus on jobs and growth in the latest economic stimulus measures unveiled by the federal government today.
BCA Chief Executive Katie Lahey said the $42 billion package should be strongly supported and is highly consistent with the key recommendations in the BCA’s Budget Submission released publicly last week.
“The Rudd Government has acted quickly and responsibly to limit the impact of the global recession on Australia. In the face of a rapidly deteriorating global downturn, this is a government that stands ready to act,” Ms Lahey said.
“The package delivers a substantial economic stimulus that should have an immediate and welcome impact on demand.
“Global events and the need for the government to respond to support demand and growth have made a large budget deficit inevitable.
“But the government’s responsible approach in keeping stimulus measures timely, well targeted at those who’ll spend it, and temporary, will ensure the spending will not be a dead weight on our ability to achieve future growth and surpluses,” she said.
Importantly, the government has incorporated a major boost to infrastructure spending through projects able be delivered in the next one to two years. This will support demand now and deliver longer-term benefits.
Ms Lahey said if these measures were to have maximum effect, the states and territories must follow the lead of the federal government.
The BCA strongly endorses the government’s intentions to withdraw funding from state and territory governments that seek to offset additional federal spending.
“Our budget submission called for a coordinated response by all levels of government if Australia is to avoid the worst aspects of the global recession,” Ms Lahey said.
“It’s time for the states and territories to publicly declare how their policies will support the efforts of the federal government in tackling this economic emergency.
“Today the government has shown leadership in responding proactively to an unprecedented global challenge in a way that should support confidence.
“Importantly, in doing what is needed to support growth and jobs now, the government is seeking to limit the longer-term impacts on the budget and future growth and prosperity.
“Once again we are reminded how quickly strong fiscal positions can be eroded, but the size of the deficits being projected are appropriate to the economic circumstances facing Australia.
“The BCA welcomes the reliance on temporary measures and the clear articulation of an ‘exit strategy’ to return the budget to surplus as growth resumes.
“It will be important for the government to continue to monitor the impacts of these measures on growth and jobs and to adjust programs as needed to ensure they are as effective as possible,” she said.