Government says 20 million migrant workers thrown out of work, raising fears of unrest.
Wayne Swan, the Australian finance minister, said the plan included $18.3bn for infrastructure, schools and housing, as well as $8.1bn cash payments for low and mid-income earners to be paid in March.
“The plan is a rapid response to deteriorating global economic conditions,” Swan said.
“The plan is a rapid response to deteriorating global economic conditions”
The unveiling of the latest stimulus measures came as the Reserve Bank of Australia (RBA) cut its benchmark interest rate to a record low 3.25 per cent on Tuesday, leaving the door open for further cuts if needed.
Australia’s stimulus spending announced since last September now totals $50bn and adds to a raft of measures in major economies, including an $819bn plan still awaiting approval by congress in the US and a $586bn package in China.
According to government figures, the deteriorating global financial conditions means the Australian government budget could fall into deficit of $14.4bn in 2008/09, or 1.9 per cent of GDP, and $22bn in deficit, or 2.9 per cent of GDP, the following year.
Australia has recently enjoyed a resources boom from exports of commodities like iron and copper ore to rapidly growing Asian economies such as China and India.
But the global financial crisis has caused demand to slide, and in December Australia saw its trade surplus shrink by 40 per cent
Economists are expecting to see a return to trade deficits as bulk commodity prices fall.
Australian officials meanwhile have said they expect unemployment to hit seven per cent by mid-2010, up from 5.75 per cent previously forecast in November.