Australia to fast-track $2.6 billion worth of infrastructure spending in bid to revive economy
Reuters
Published Nov 19, 2019 04:20PM ET
By Colin Packham
SYDNEY (Reuters) - Australia's conservative government will fast-track A$3.8 billion ($2.59 billion) in infrastructure spending, Prime Minister Scott Morrison said on Wednesday - a fillip to a stalling economy.
Australia's economic growth has slumped to its lowest in a decade, led by weakness in consumer spending and home building.
Desperate to reinvigorate the economy, the Reserve Bank of Australia (RBA) has chopped interest rates by 75 basis points to an historic low of 0.75%, though it has repeatedly said increased government spending on infrastructure was required.
Heeding those calls, Morrison will use to a major speech on Wednesday to promise an injection of government spending on road and rail projects across the country, two sources familiar with the plans told Reuters.
Nearly half of A$3.8 billion to be invested over the next four years will be spent over the next 18 months, Morrison will say.
Speaking ahead of the speech in Brisbane, Morrison confirmed the infrastructure plan.
"All these projects will provide important extra support to the economy," Morrison told Australia's Channel 7.
Morrison has for several months since his unexpected re-election in May dismissed calls for accelerated infrastructure spending, insisting the government was focused on delivering Australia's first budget surplus in more than a decade.
But with iron ore prices hitting new highs, Morrison's conservative government has more fiscal firepower to prop up the country's struggling economy.
The infrastructure spending plan is also a boost to the RBA, which discussed cutting interest rates again this month, though it decided to assess the impact of the three cuts already delivered since June.
Analysts generally assume the central bank would not want to take its cash rate below 0.5% and would have to resort to other stimulus steps such as asset purchases or lending to banks at super-low rates.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.