Thursday, February 12, 2009


$42b stimulus package sunk

  • Phillip Hudson
  • February 12, 2009 - 5:15PM

The Federal Government's $42 billion economic stimulus package has been sunk in the Senate with independent Nick Xenophon joining the Coalition and voting against it.

The five Greens senators and Family First's Steve Fielding voted for it but the ballot was tied 35-all in the Senate, meaning the legislation was defeated.

It means low and middle income workers and families will not get the $12 billion in one-off cash bonus payments promised last week by the government and more than $28 billion worth of spending on school repairs and upgrades, building new homes and providing free ceiling insulation will not go ahead unless the government can find one more vote.

The government immediately laid the blame with Malcolm Turnbull and the Opposition for voting against the package.

South Australian independent Senator Nick Xenophon demanded $5 billion be brought forward from future years to buy back water and improve irrrigation infrastructure along the ailing Murray-Darling Basin.

The government offered $410 million, including about $200 million this financial year.

Senator Xenophon said that was not credible and he could not vote for the package.

"I didn't come to Canberra to make friends," he said.

"I came here to make a difference. I won't walk away from the people of the Murray-Darling basin".


The Prime Minister, Kevin Rudd, said the package would be reintroduced into the House of Representatives today because the $42 billion in spending was "urgent and in the national economic interest''.

The Treasurer, Wayne Swan, said the Opposition had voted against jobs and nation building and they had "effectively sabotaged the Australian economy''.

Mr Turnbull fired back, saying Mr Rudd's "economic policy is in tatters'' because he had assumed the Opposition and Senator Xenophon would get out of the way of his bulldozer.

"The government is in a hole of its own making,'' Mr Turnbull said. "The Prime Minister has refused to negotiate.''

He said Mr Rudd had treated the Parliament with "disingenuous contempt''.

Mr Turnbull last week said he believed the package should be worth $15 to $20 billion rather than $42 billion and tonight urged Mr Rudd to "open the door'' to negotiate.

"We stand ready to sit down with the Prime Minister to discuss the composition, the design of an appropriate fiscal stimulus package.

"We are committed to that, we are determined to do it.

"All he has to do is open the door. We can meet and I'm sure that with good will we can resolve on measures that will then have the support of both sides of politics.''

Unemployment up

As the Bureau of Statistics today said the unemployment rate had risen from 4.5 to 4.8 per cent, Senator Fielding said the package was "flawed" because it would leave 300,000 extra people unemployed.

He wanted to divert $4 billion of the $42 billion to an undefined job creation scheme, but the government rejected that idea.

"The government in its desire to push this package through swiftly, basically has held a gun to the heads of the cross bench.

"We were damned if we voted for it. We were damned if we voted against it," Senator Fielding said.

The Victorian senator said he walked the streets of Canberra for an hour at midnight last night.

"Family First wanted to support a stimulus package," he said. "But I have reservations about this package".

He said he found himself between two hard places - the government and the Opposition - and a rock - the Australian people that are hanging on in desperate times.

The five Green senators voted with the government after winning several concessions from the government, including reducing the $950 cash bonus payments to $900 with the money saved being used to pay for community job schemes, bicycle paths and heritage projects.

Greens leader Bob Brown said the government had also promised to consider increasing the aged pension in the May budget, give more funding to the Bureau of Statistics and boost funding for a national bushfire research centre in Melbourne.

"We're moving to a wiser, greener, more socially just country because of these ammendments," he said.

*The words xenephonophobia & xenephonophobic are copyright Scott Plimpton 2009

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