Turnbull wont support further stimulus packages

Federal Opposition Leader Malcolm Turnbull says the Coalition will not support a third stimulus package if it is similar to the first two.

The Government says it is prepared to do whatever it takes to help Australia weather the global economic crisis and there is speculation today that it may consider including a third stimulus package in the May Budget.

The Opposition voted against Prime Minister Kevin Rudd's second stimulus plan, worth $42 billion.

Mr Turnbull says the Coalition is prepared to block future measures if the Opposition does not think they will work.

"If it's another third spendathon, certainly we wouldn't," he said.

"But we'll see what he proposes. Who knows, he may come up with something that makes sense, but based on the last two, it is a very, very poor use of Australian taxpayers' money."

Figures released yesterday showed that February retail sales defied predictions by falling by 2 per cent, despite rises in the previous two months.

Mr Turnbull says the slump is proof the Government's first economic stimulus package of $10.4 billion did not work.

Mr Turnbull, who plans to reveal details of his small business stimulus strategy tonight at a business dinner in Hobart, says the Government's second stimulus package will dig the country into a deeper hole.

"All we've seen is unemployment rising, we've seen economic growth slowing," he said.

"It's apparent from the retail sales figures yesterday that the cash splash did not work.

"Some of it was spent but the vast majority was saved, and yet we hear in the press that Mr Rudd is contemplating a third stimulus package."

Yesterday's sales slump prompted economists to say that the effect of December's cash handouts, as part of the stimulus package, had faded.

But Federal Treasurer Wayne Swan has defended the spending.

"When you look at what is happening with retail sales around the world, and indeed when you look at the latest forecasts from the OECD and the World Bank, I think you can see that Australia's stimulus package has indeed been working," he said.

Mr Swan would not confirm whether a third stimulus package would be part of the next Budget but said the Government would take more stimulus action if necessary.

Meanwhile, a group of chief executives has attacked the Federal Government's economic stimulus policies.

A survey of more than 220 chief executives by the CEO Institute has found that almost 60 per cent believe economic conditions will return to normal during 2010.

But 75 per cent say the Government is not doing enough to drive down employment costs to help businesses through the crisis.

The head of the institute, Ken Gunn, says many of the respondents are critical of the fiscal bonus payments.

"Probably the general criticism was that [there] should have been more emphasis on infrastructure spending, capital spending, which would lead to long-term jobs, rather than the quick fix approach of consumer handouts," he said.

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Thu 2nd April 2009 - 01:41pm