ALP USES SENATE PANEL AS IT 'APPEARS' TO BE TRANSPARENT ON THE ECONOMIC STIMULUS PACKAGE

Treasury chief to face Senate panel

Michelle Grattan and Peter Martin
September 8, 2009 - 12:00AM

A SPECIAL one-day hearing on the Government's economic stimulus package, with Treasury secretary Ken Henry as the star witness, is expected to be approved by the Senate today.

Deputy Prime Minister Julia Gillard hinted yesterday the Government was likely to support the Greens' move to bring Dr Henry and other officials before the Senate economics committee on Friday.

The Government has little to fear from Treasury evidence - its policy is based on Treasury advice. The Opposition is also likely to go along with the move, because it can do little else. Dr Henry and Opposition senators usually clash when he appears at Senate hearings.

The motion from Greens leader Bob Brown says the committee should get a ''full update'' on the stimulus package. This should address the efficacy of the measures to date; the costs and benefits of continuing the spending measures; any change in the stimulus ''roll-out'' that ought to be entertained given the changed economic circumstances; and an evaluation of the environmental impacts of the spending.

Prime Minister Kevin Rudd told Parliament that both domestic and international figures ''underscore the absolute importance of ensuring that we continue to stay the course with this strategy''.

Had the strategy of the Opposition - which voted against the $42 billion package - been adopted ''Australia right now would be in the depth of recession and with unemployment going through the roof'', he told Parliament.

Finance Minister Lindsay Tanner yesterday rejected the general expectation, based on its own comments, that the Reserve Bank was likely to start putting up interest rates soon.

''The Reserve Bank is not indicating that it will soon put up interest rates,'' he told the ABC. ''It has only indicated that at some point in the future interest rates can be expected to rise because they have been at emergency lows.''

None of the mainstream economic forecasters now expect unemployment to climb above 7.5 per cent, and most expect it to peak way below the official budget forecast of 8.5 per cent.

Shane Oliver from AMP Capital is tipping a peak of just 6.3 per cent, drastically down from the 8 per cent he forecast just months ago because, as he says, ''the recession failed to arrive''.

The ANZ job advertisement count jumped in August for the first time in 16 months.

Newspaper job advertisements rebounded 5.5 per cent and internet advertisements 4 per cent in a clear indication that employers have begun to substitute hiring for firing.

This morning's Dun & Bradstreet business survey finds that five employers are planning to boost staff for every three that are planning to cut back, a further sign that the labour market is turning.

Half of those surveyed expected an increase in sales and a third expected an increase in profits. Investment plans are the highest in two years and plans to boost inventories the highest in five years.

- Opposition and cross-benchers have allowed the Safe Work Bill to pass the Senate, backing down from their earlier insistence on amendments.

The bill, which is about harmonising the country's occupational health and safety provisions, would have qualified as a double dissolution trigger if it had been defeated yesterday.



This story was found at: http://www.theage.com.au/national/treasury-chief-to-face-senate-panel-20090907-fedv.html