Scott Morrison’s $3.8 billion shift to kickstart jobs
Tonight Scott Morrison will announce he is bringing forward $3.8 billion worth of infrastructure spending in an attempt to reinforce the economy.
It's a significant move from the government, which has recently faced - and largely resisted - calls to provide more economic stimulus to counter lukewarm growth at home and increasingly worrying headwinds overseas.
Last month the International Monetary Fund (IMF) revised its forecast for Australia's economic growth in 2019 down to 1.7 per cent. Global growth was downgraded too, and the IMF advised countries to invest more in infrastructure.
Tonight's announcement, which Mr Morrison will deliver in a speech to the Business Council of Australia's annual dinner, is a large step in that direction.
The $3.8 billion figure covers the four-year forward estimates period. About half of it - $1.78 billion - will come in the next 18 months.
In total, $2.72 billion in existing infrastructure spending is being accelerated, and another $1.06 billion in additional funding is being added.
"Shortly after the election, I wrote to all state and territory leaders asking them to identify infrastructure projects from our $100 billion ten-year program that could be accelerated. I'm pleased to announce that as a result of this process we have been able to bring forward $3.8 billion of investment into the next four years," Mr Morrison is expected to say.
"This will support the economy in two ways - by accelerating construction activity and supporting jobs in the near term, and by reaping longer run productivity gains sooner.
"Every state and territory will benefit, with significant transport projects to be accelerated in all jurisdictions."
We saw an early hint of this move on Monday, when the government announced $415 million of accelerated and added funding for roads and rail projects in South Australia, in partnership with the state government.
Similar deals with Queensland and Western Australia are expected to be confirmed in the coming days.
The stimulus is not limited to infrastructure either.
Mr Morrison also counts the government's $7.2 billion tax cuts, along with $550 million of drought assistance measures, as examples of its efforts to strengthen growth.
But for months, he has faced calls to do more.
As far back as August, Reserve Bank Governor Philip Lowe was pushing for Mr Morrison and Treasurer Josh Frydenberg to take action.
"One option is for fiscal support, including through spending on infrastructure," Dr Lowe said.
"Spending on infrastructure not only adds to demand in the economy but, done properly, it can boost the economy's productivity. It can also directly improve the quality of people's lives through reducing congestion and improving services.
"At the moment, there are some capacity constraints in parts of the infrastructure sector, but these should not prevent us from looking for further opportunities to boost the economy's productive capacity and support domestic demand.
"There is no shortage of finance to do this, with interest rates the lowest they have ever been. This week, all governments in Australia can borrow for 10 years at less than 2 per cent."
Labor is advocating something even more drastic.
Shadow Treasurer Jim Chalmers has frequently accused the government of "patting itself on the back" and pretending "everything is hunky dory".
Beyond infrastructure, he has pressured Mr Morrison to bring forward stage two of the government's tax cuts, increase the Newstart unemployment benefit, incentivise business investment, or look at wages policy, framing each option as a potential way to drive growth.
Tonight the Prime Minister will push back on that, deriding Labor's approach as "panicked".
"A panicked reaction to contemporary challenges would amount to a serious misdiagnosis of our economic situation. A responsible and sensible government does not run the country as if it is constantly at DEFCON1 the whole time, whether on the economy or any other issue. It deals with issues practically and soberly," Mr Morrison is expected to say.
"The appetite for crisis popular amongst some these days, on so many issues, reflects an immaturity demanding urgent action regardless of the consequences.
"Urgency takes over reason. What you get is the fiscal debacle that was rendered by the Rudd-Gillard-Rudd Labor government that we are still paying for to this day, and that Labor continues to promote. We will not be following Labor's example or policy prescriptions.
"If Australians wanted to elect economic panic merchants, they would have voted Labor."