Australia Treasurer Won't Rule Out 3rd Stimulus

Australia's Treasurer Wayne Swan would not rule out a third economic stimulus in the coming budget, but declined to confirm reports a package was under development as the country edges nearer to recession.

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"We will see what is occurring in the global economy and if further action is necessary then it will be on the table, but these are matters to be considered in the budget context, and I don't speculate about that," Swan said in an interview on Australian television from London, broadcast on Thursday.

Swan is in the UK attending the G20 summit.

The government planned a third round of economic stimulus measures in the May 12 budget, the Australian newspaper said on Thursday, without elaborating or saying where it got the information.

Prime Minister Kevin Rudd has since September last year announced A$52 billion (US$36 billion) in stimulus injections, including cash handouts for families, wage earners and infrastructure spending.

Another A$31 billion has been promised to support embattled car makers and non-bank home mortgage lenders, as well as to shore up bond markets.

In a separate interview late on Wednesday, Swan said he expected unemployment to climb beyond the government's own forecast of two months ago, suggesting he now expects the jobless rate to exceed 7 percent by mid-2010.

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In February, Swan forecast 1.0 percent economic growth in 2008/09, but economists now expect a small contraction over calendar 2009.

Unemployment hit 5.2 percent in February, its highest in almost four years, after the economy slammed into reverse in the fourth quarter, putting Australia on the brink of its first recession since 1991.

"This government has been ahead of the game and has put in place very effective stimulus and we've done it earlier than many other governments in the world," Swan said.