Chapter 2
Spending initiatives
Australian stimulus measures since the global financial crisis
2.1
The Government has undertaken various fiscal initiatives since the
collapse of Lehman Brothers in September 2008 sparked the global financial
crisis.
2.2
The first package to be described as a stimulus measure was the Economic
Security Strategy (ESS) in October 2008. This package included combined
expenditure of $10.4 billion through various cash payments, a boost to the
First Home Owners grant and further investment through the Nation Building
Funds.[1]
2.3
In November 2008, the Council of Australian Governments (COAG) announced
a $15.2 billion COAG funding package which included measures to address
housing, hospitals and education.
2.4
A further $4.7 billion in stimulus expenditure was announced in December
2008 through the Nation Building Plan, which included investment in road, rail
and the higher education sector.
2.5
A much larger stimulus package, the Nation Building and Jobs Plan, was
announced in February 2009, adding approximately $42 billion worth of stimulus
expenditure.
2.6
There were further measures announced in the May 2009 Budget which
included $8.5 billion for investment in road, rail and port
infrastructure, an initial investment of $4.7 billion in the National Broadband
Network, $3.6 billion for development of clean energy technologies and $5.8
billion for various investments in the health, tertiary education and research
sectors.
2.7
Summing up all these announced measures gives a total of more than $90 billion
over five years (Table 2.2). Treasury itself indicated in the 2009–10 Budget
Paper No. 1 that the scale of fiscal stimulus over four years would be almost
$90 billion (Table 2.1).
Table
2.1 Composition of Fiscal Stimulus
2.8
The Treasury Secretary's tally was that:
...around $79 billion of what may broadly be characterised as
fiscal stimulus measures are expected to impact on the economy over three years
from 2008-09 through to 2010-11.[2]
2.9
However, other Treasury forward estimates[3]
operate through to 2011-12.
2.10
From Table 2.1, it would appear that there is at least $31 billion of discretionary
stimulatory spending out of the remaining $45 billion over the forward
estimates unspent. This discretionary stimulatory spending comes from the
construction of the building and infrastructure elements of the stimulus
package to ensure stimulus projects and funding will impact in the 2009-10 to
2011-12 financial years.[4]
2.11
Appendix 3 outlines the composition of the ESS, the COAG Funding
Package, the December Nation Building Package and the Nation Building and Jobs
Plan.
2.12
Chart 2.1 shows the projected contribution of the pre-budget packages
over time, while Table 2.2 provides an itemised breakdown of the five packages.
Chart 2.1: Fiscal stimulus packages delivered by the
Australian Government
Table 2.2:
Itemised Expenditure by Package
|
Economic Security Strategy
– $10.4 billion (October 2008)
|
|
($billion)
|
Item
|
|
$4.8
|
Cash payments ($1000-$1400)
to various pension categories
|
|
$3.9
|
Cash payments ($1000) to
families based on Family Tax Benefit or for dependent children
|
|
$1.5
|
First Home Owners Grant Boost
|
|
$0.2
|
Training – Productivity
Places Program
|
|
|
Fast tracking of nation
building funds
|
|
COAG Funding package –
$15.2 billion (November 2008)
|
|
$4.8
|
Increased funding for the
Australian Healthcare Agreement
|
|
$3.5
|
Funding for the National
Education Agreement and education initiatives
|
|
$2.0
|
Indigenous reform (health,
housing, economic development and service delivery)
|
|
$1.8
|
Hospitals and health
workforce reform
|
|
$0.8
|
Affordable housing
|
|
$0.7
|
Improvements to emergency
departments
|
|
$0.6
|
Business sector deregulation
|
|
$0.5
|
Preventative health measures
|
|
$0.5
|
Other
|
|
Nation Building Package - $4.7billion
(December 2008)
|
|
$1.2
|
New funds for Australian Rail
Track Corporation
|
|
$1.6
|
Investment in university and
TAFE infrastructure
|
|
$1.6
|
10% temporary capital
investment allowance
|
|
$0.4
|
Bringing forward of road
spending including black spots program
|
|
Nation Building and Jobs
Plan - $41.5 billion (February 2009)
|
|
$14.7
|
Building the Education
Revolution (School construction and refurbishment)
|
|
$12.7
|
Cash payments to various
categories
|
|
$6.6
|
Construction of 20,000 Social
housing and Defence homes
|
|
$3.8
|
Energy Efficient Homes
(Insulation and solar hot water rebate)
|
|
$2.7
|
Small business and general
business tax break
|
|
$0.9
|
Black spots, boom gates and
community infrastructure
|
|
2009–10 Budget – Nation
Building Infrastructure Measures - $22.5billion (May 2009)
|
|
$3.4
|
Road Network Investment
|
|
$4.6
|
Metro Rail
|
|
$0.4
|
Ports
|
|
$4.7
|
National Broadband Network
|
|
$3.6
|
Clean Energy Initiative (does
not include $1b of existing funding)
|
|
$2.6
|
Investment in tertiary
education, research and innovation
|
|
$3.2
|
Hospitals and Health
Infrastructure
|
|
Total of all measures
listed: $94.3 billion
|
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