Australian States Agree on Stimulus Spending

Australia's national government and six states agreed to rush through spending on A$29
billion ($19 billion) worth of construction projects on Thursday, as part of a new stimulus package designed to head off recession.

Prime Minister Kevin Rudd signed the deal with leaders of Australia's six states and two territories, declaring the programme to be the biggest level of nation-building since the post-World War II reconstruction.

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The move came as parliament's upper house Senate voted to delay until next week its support for the government's overall A$42 billion stimulus package, including cash payments to workers and families, upsetting Rudd's timetable to have the package in place by Friday.

"It is critical that we move heaven and earth to make sure these payments reach families as quickly as possible," Rudd told reporters.

The stimulus bill in the United States has also run into a political hurdle, with the U.S. Senate demanding amendments to President Barack Obama's package, worth nearly $900 billion.

The Australian government announced its stimulus package on Tuesday, including A$12.7 billion in cash payments to low and mid-income workers and families, and the A$29 billion for infrastructure and building projects in schools.

The centre-left government wants the laws passed by Friday to ensure cash payments of A$950 to nine million Australians can be processed and paid by March 11.

Parliament's lower House of Representatives passed the six stimulus package bills in the early hours on Thursday after an all-night sitting.

But the Senate, where the Greens and two independents hold the key swing votes, opted to send the laws to a two-day inquiry where they plan to quiz Treasury and welfare officials.

The bills include new laws to lift the A$75 billion limit on national government borrowing, giving the Treasurer authority to borrow up to A$200 billion in special circumstances to fund government deficits.

Rudd said it was crucial for national politicians and those in the states to make sure the infrastructure money flowed through to projects as soon as possible.

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"We are in a national economic emergency, and we are going to all have to roll our sleeves up and take a direct, personal and rolling interest in the implementation of this," Rudd told the state leaders.

"We have not been engaged in this level of intensity of activity, of program delivery, of construction, since post-war reconstruction."

Premier of the northern Queensland state Anna Bligh, speaking on behalf of the state and territory leaders, said the states were prepared to speed up approval of projects to help protect the economy.

"These are extraordinary times and they are times that demand action," Bligh told reporters. "We are confident as premiers that this package will actively stimulate the construction industry in each of our states."

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