theSun | WEDNESDAY FEBRUARY 4 2009 17

business

Australia unveils
A$42 billion
second stimulus
CANBERRA: Australia’s government If the stimulus moves fail to protect
unveiled a A$42 billion (RM98.7 billion) the Australian economy from the worst
second stimulus yesterday in a bid to of the financial crisis, and save jobs,
buttress the rapidly cooling economy Prime Minister Kevin Rudd faces the
from the global slowdown, and halved risk of losing the next election in 2010 as
its 2008/09 growth forecast to 1% . many voters will accuse him of economic
Treasurer Wayne Swan said the mismanagement, say political analysts.
plan included A$28.8 billion (RM67.7 The A$42-billion stimulus is the
billion) for infrastructure, schools latest in a series of financial moves
and housing, as well as A$12.7 billion by Australia’s centre-left government
(RM29.8 billion) cash payments for low aimed at shoring up the fast-cooling
and mid-income earners to be paid next A$1 trillion economy.
month. “All these are large amounts of
“The plan is a rapid response to expenditure for infrastructure over the
deteriorating global economic condi- next three years. That is extremely posi-
tions,” said Swan in announcing the tive as most of the money will be spent
package. domestically. The
Australia’s stimulus spend- The plan is a cash handouts
ing announced since September will also be good
2008 now totals A$78 billion rapid response for consumption,”
(RM183 billion) and adds to a raft to deteriorating global said Michael
of packages developed in major economic conditions. Workman, a sen-
economies, including US$819 The plan will help ior economist at
billion in the United States and Commonwealth
US$586 billion by China. support and sustain Bank of Australia.
The latest stimulus would up to 90,000 jobs over In October
stave off recession, said Swan, the next two years.” last year a A$10.4
ensuring growth was 0.5% billion package,
higher in 2008/09 and giving a boost of mostly in pre-Christmas cash payments,
between 0.5-1% the year after. was aimed at helping the elderly, poorer
But the spending and deteriorating families and first-home buyers.
global financial conditions meant the Other measures include A$8 billion
government budget would fall into to fund purchases of residential mort-
deficit of A$22.5 billion in 2008/09, or gage-backed securities after global lines
1.9% of GDP, and A$35 billion in deficit, of credit dried up, and A$6.2 billion in
or 2.9% of GDP, the following year. car industry assistance to help protect
Unemployment would also hit 7% jobs and develop environmentally-
in mid-2010, up from 5.75% previously friendly vehicles.
forecast in November. In September last year the govern-
“The plan will help support and ment announced it would guarantee
sustain up to 90,000 jobs over the next public bank deposits and wholesale
two years,” said Swan. funding to banks. – Reuters

September as inflation fears gave way

BOJ to buy shares to concern about the impact of slower

briefs
world economic growth. – AFP

worth US$11bil GM, Chrysler offer workers

TOKYO: The Bank of Japan yesterday pledged to
spend US$11 billion (RM39.6 billion) to buy shares
held by Japanese banks to ease the pain from the global
financial crisis, reviving a scheme launched earlier this
decade to head off a domestic banking crisis.
The move came as a Japanese newspaper report
said Mitsubishi UFJ Financial Group, Japan’s big-
gest bank, would post a loss for April to December
and slash its annual forecasts, reflecting both stock
losses and a rise in bad debts.
The Nikkei stock average rose after the BOJ deci-
sion, while the yen fell broadly on hopes the central
bank buying would ease risk aversion.
But some analysts questioned if the central bank
stock buying would do much to help an economy
already slipping deep into recession.
“If anything it is a positive. But it remains to be
seen how much of an impact it will have on stabilis-
ing the broader financial system,” said Jason Rogers,
credit analyst at Barclays Capital in Singapore.
Under the scheme, the BOJ will buy up to ¥1 tril-
lion (US$11 billion) worth of listed shares held by
Japanese banks up until April 2010 to reduce their
exposure to the stock market.
To protect its own balance sheet, the central bank
will buy shares in companies that have credit ratings
of at least BBB-minus, the lowest rank in investment
grade debt.
The BOJ’s measure follows a government plan
to buy up to ¥20 trillion in shares from banks and
would revive a similar scheme it ran earlier this
decade when authorities were trying to stave off a
domestic banking crisis.
Back then, the central bank bought ¥2 trillion in
stocks under a two-year scheme until 2004 to help
many commercial banks staggering under a huge
pile of bad loans and valuation losses on stockhold-
ings. – Reuters
Asia could see rapid
recovery, says IMF chief
TOKYO: Asia’s economies could recover
rapidly next year from their slump once the
rest of the world claws out of recession, the
head of the International Monetary Fund
(IMF) said yesterday.
“Once the world economy regains its
footing a rapid recovery is possible,” Domi-
nique Strauss-Kahn said, predicting Asian
economic growth of more than 5% next year,
almost twice the pace expected this year.
Asian countries cannot begin to recover
until the rest of the global economy escapes
from the current “major downturn” because
they rely heavily on exports, the IMF chief
said, speaking to an online briefing from
Washington. Once the US and European
economies start to rebound, however, some
Asian economies “may recover very fast,”
he said. – AFP
Australia slashes interest
rates to 45-year low
SYDNEY: Australia’s central bank slashed
interest rates by one percentage point to
a 45-year low yesterday in the latest in a
series of aggressive cuts sparked by the
global financial crisis.
The move by the Reserve Bank of Aus-
tralia (RBA) at its monthly board meeting
took the official cash rate to 3.25%.
It was the fifth consecutive cut by
the RBA, which has sliced a total of 400
basis points off the official rate since
cash, cars to leave
DETROIT: General Motors Corp and Chrys-
ler LLC has began offering a new round of
retirement incentives including vouchers
for cars as the automakers move to reduce
workers and inventory.
GM will offer its US hourly workers
US$20,000 (RM72,000) in cash and a
US$25,000 (RM90,000) voucher to buy a
vehicle as an incentive to retire or leave the
company, an official with the United Auto
Workers union briefed on the plan said.
Chrysler’s programme offers retirement-
eligible workers US$50,000 (RM180,000) in
cash and a voucher of US$25,000 for a new
Chrysler vehicle if they leave, according to a
person with direct knowledge of the offers.
Workers who opt to leave Chrysler with
no retiree healthcare benefits would get
US$75,000 (RM270,000) and a US$25,000
car voucher, the person said. – AFP
SIA to further reduce fuel
surcharges
SINGAPORE: Singapore Airlines (SIA) said
yesterday it will further reduce fuel sur-
charges. The cuts range from about 5%
to 21%, the airline said, announcing its
third round of fuel surcharge reductions
since September.
Beginning today, the economy class
fuel surcharge will range from US$22
(RM79.20) on a flight between Singapore
and Southeast Asia, to US$170 (RM612)
on a flight to North America, SIA said.
– AFP