A massive stimulus package designed to boost the Australian economy in the face of the global financial crisis hit a hurdle Wednesday when the opposition refused to support it in parliament.
Prime Minister Kevin Rudd announced the A$42 billion (US$27 billion) stimulus package Tuesday, warning of what he called "the unfolding national and international economic emergency."
The package includes spending of A$28.8 billion on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of A$12.7 billion to eligible workers, farmers and students.
But when the government introduced the legislation to parliament Wednesday, pressing for key parts to be passed by Thursday to ensure cash handouts are paid from next month, the opposition Liberal Party baulked.
"The opposition will vote against this package in the House (of Representatives) and the Senate," leader of the opposition Malcolm Turnbull told parliament.
"We know that this is not going to be a popular decision, but it's the right decision."
Rudd's centre-left Labor government has the numbers in the lower house to push the legislation through, but would face problems in the Senate where minor parties and an independent hold the balance of power.
Under the package taxpayers earning less than A$100,000 Australian a year will receive a tax bonus of up to A$950 each, while similar amounts will be paid for each school-going child and to drought-affected farmers.
The payout plan comes hard on the heels of a A$10.4 billion stimulus package released in December that targeted pensioners, low-income earners and others in a bid to boost consumer spending.
The opposition suggests the first package failed to have the desired effect.
"If you give people one-off windfall lump sums in uncertain times they are more likely to save it than to spend it," Turnbull said.
The opposition supported bringing forward personal income tax cuts, scheduled for July 1, 2009, to January 1 this year as an alternative to the cash handouts.
"It does not put A$950 in everybody's pocket today, but that's the point - it increases permanent income and it therefore provides a greater incentive to work and to invest," Turnbull said.
Prime Minister Kevin Rudd announced the A$42 billion (US$27 billion) stimulus package Tuesday, warning of what he called "the unfolding national and international economic emergency."
The package includes spending of A$28.8 billion on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of A$12.7 billion to eligible workers, farmers and students.
But when the government introduced the legislation to parliament Wednesday, pressing for key parts to be passed by Thursday to ensure cash handouts are paid from next month, the opposition Liberal Party baulked.
"The opposition will vote against this package in the House (of Representatives) and the Senate," leader of the opposition Malcolm Turnbull told parliament.
"We know that this is not going to be a popular decision, but it's the right decision."
Rudd's centre-left Labor government has the numbers in the lower house to push the legislation through, but would face problems in the Senate where minor parties and an independent hold the balance of power.
Under the package taxpayers earning less than A$100,000 Australian a year will receive a tax bonus of up to A$950 each, while similar amounts will be paid for each school-going child and to drought-affected farmers.
The payout plan comes hard on the heels of a A$10.4 billion stimulus package released in December that targeted pensioners, low-income earners and others in a bid to boost consumer spending.
The opposition suggests the first package failed to have the desired effect.
"If you give people one-off windfall lump sums in uncertain times they are more likely to save it than to spend it," Turnbull said.
The opposition supported bringing forward personal income tax cuts, scheduled for July 1, 2009, to January 1 this year as an alternative to the cash handouts.
"It does not put A$950 in everybody's pocket today, but that's the point - it increases permanent income and it therefore provides a greater incentive to work and to invest," Turnbull said.
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