Australia to Fast-Track $2.6 Billion of Infrastructure Projects
Prime Minister Scott Morrison will fast-track A$3.8 billion ($2.6 billion) of infrastructure projects such as highways to boost Australia’s economy, even as he rejects calls for additional stimulus as “panic measures”.
While his government in April announced it would spend A$100 billion on transport infrastructure over a decade, it will now bring forward some of that outlay into the next four years, according to excerpts of a speech to be delivered by Morrison later Wednesday.
“This will support the economy in two ways –- by accelerating construction activity and supporting jobs in the near term and by reaping longer-run productivity gains sooner,” Morrison will say in the speech.
The conservative government is facing calls to give the creaking economy a boost, with some economists saying it should bring forward a second round of income tax cuts instead of relying on infrastructure spending to deliver stimulus. The government last week announced it will give foreign investors tax concessions when they fund infrastructure projects valued at more than A$500 million.
Morrison has been loathe to provide stimulus that may jeopardize a promised return to surplus this fiscal year, even after the central bank urged his government to help facilitate spending on major projects.
Reserve Bank of Australia chief Philip Lowe has called for the government to tap record-low borrowing costs to ramp up investment in roads, railways and bridges to support economic growth and employment as the central bank’s conventional interest-rate ammunition comes to an end.
Treasurer Josh Frydenberg has so far resisted bringing forward additional income tax cuts, maintaining he’s already doing enough to support the economy. Morrison will maintain that stance in Wednesday’s speech.
“A panicked reaction to contemporary challenges would amount to a serious misdiagnosis of our economic situation,” Morrison will say in the speech. “A responsible and sensible government does not run the country as if it is constantly at DEFCON1 the whole time, whether on the economy or any other issue.”
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