FED:Gillard defends stimulus spending

AAP General News (Australia)
08-11-2010
FED:Gillard defends stimulus spending

CANBERRA, Aug 11 AAP - Prime Minister Julia Gillard has again defended the government's
stimulus spending, acknowledging that Treasury made a more conservative estimate of the
impact on growth and confidence of the stimulus package.

A report in Fairfax newspapers says correspondence between the Australian National
Audit Office and Treasury reveals that Treasury revised down growth forecasts last year
because of delays in rolling out the stimulus and might have to do so again.

The report said those findings challenged Labor's central economic message that it
had created up to 450,000 jobs and that the coalition's rejection of the stimulus would
have cost 200,000 jobs.

Ms Gillard said the stimulus supported 200,000 extra jobs and kept the economy out of recession.

"What it (Treasury) didn't foresee as fully as proved to be the case is that economic
stimulus kept the economy moving and economic stimulus and the actions of the government,
including guaranteeing our banks, meant that there was more confidence from households
and confidence from business," she told reporters.

"And it is unambiguous as a result that the difference between providing economic stimulus
and generating that confidence in our economy is the difference from the economy having
continued to grow as opposed to going backwards into recession.

"The Treasury figures make that clear."

She said critiques from Australian and international businessmen and economists all
acknowledged that the stimulus was targeted, temporary and timely.

That, she said, underlined the startling lack of judgment from the opposition which
would have seen Australia go into recession.

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KEYWORD: POLL10 ECONOMY

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