Investment down $42bn
By Michelle Grattan | theage.com.au | 05 November
Private business investment is set to be about $42 billion lower through the downturn than it would have been without the global recession, according to the federal Treasury.
Treasurer Wayne Swan will give this estimate, covering the period 2009-10 and 2010-11, at an Australian Industry Group breakfast in Melbourne today, in a speech thanking business for keeping on workers during the bad times and urging banks to do more for small-business customers.
Mounting another strong defence of the stimulus, Mr Swan will say one reason the Government judges its plans remain appropriate is that the vast bulk of the stimulus still to be spent will go to critical nation-building infrastructure — highways, rail, ports, hospitals and schools.
This is "temporary spending, with lasting gains", leaving a legacy of improved social and economic infrastructure.
The Government's infrastructure spending will "also help to maintain Australia's capital stock through this downturn, despite the expected falls in private investment".
"The Government's investment will offset the weakness in private investment, helping to maintain total investment in the Australian economy as a share of the total economy," Mr Swan will say.
"Abandoning the stimulus now would drive more businesses to the wall, it would leave many tens of thousands more Australians without jobs, and it would permanently damage our economy," Mr Swan says in his draft speech, declaring the stimulus has given business "good reason to remain optimistic about the future".
Mr Swan will praise employers and workers for co-operating in reducing hours so more people have been able to keep their jobs.
The fall in hours worked that has happened already is equivalent to a loss of more than 200,000 full-time jobs. It has allowed Australia to dodge another 1.5 percentage point rise in unemployment, he says.
Unemployment in this week's budget review is now expected to peak at 6.75 per cent, rather than the budget-time forecast of 8.5 per cent.
"This is a great example of Australian business and employees pitching in to meet a national challenge," Mr Swan will tell his business listeners.
"You have kept a dire economic situation from being far worse."
First published by TheAge.com.au on November 05 2009
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