Global media tycoon Rupert Murdoch warned on Friday that Australia had yet to feel the full impact of the global economic downturn, reinforcing government arguments for a new A$42 billion ($27 billion) stimulus package. The package remains stalled in Australia's parliament, with the government warning A$12.7 billion of payments to workers and families will be held up, and jobs will be lost, if the Senate forces any changes.
Murdoch started his News Corporation media empire in Australia and is the nation's biggest newspaper publisher. "The downturn in Australia is very late," Murdoch told an investor briefing on Friday. "It is beginning to hit now, but we are not yet feeling it the way we have felt it in Britain." The comments underlined comments from Australia's Treasury boss Ken Henry, who told a parliamentary inquiry late Thursday that there was a clear case for a "substantial" stimulus now, before unemployment starts to rise.
Australia's unemployment rate remains at 4.5 percent, with job losses from the global downturn so far confined mainly to the finance and resources sectors, although the government expects that figure to rise to 7.0 percent by June 2010. Prime Minister Kevin Rudd said the new spending measures, which follow a A$10.4 stimulus package in November, were needed to keep the economy growing and to avoid job losses.
But Australia's conservative opposition has promised to vote against the new measures, following the lead of conservatives in Britain and the US, saying the government is spending too much money and should offer tax cuts instead of cash payments. That leaves the fate of the package in the hands of Australia's Greens and two independents, who hold the balance of power in the upper house Senate and who have already used their numbers to delay parliamentary approval.