Thesun 2009-02-05 Page18 Big Aussie Stimulus Package Hits Hurdle

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theSun

| THURSDAY FEBRUARY 5 2009

business news SYDNEY: A massive stimulus package designed to boost the Australian economy in the face of the global financial crisis hit a hurdle yesterday when the opposition refused to support it in parliament. Prime Minister Kevin Rudd announced the A$42 billion (RM98.7 billion) stimulus package on Tuesday, warning of what he called “the unfolding national and international economic emergency”. The package includes spending A$28.8 billion (RM67.7 billion) on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of A$12.7 billion (RM29.8 billion) to eligible workers, farmers and students. But when the government introduced the legislation to parliament yesterday, pressing for swift passage 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

Big Aussie stimulus package hits hurdle told parliament. The package “reeks of nothing more than panic” and would burden future generations with high levels of debt, he said. Rudd responded by accusing Turnbull of playing politics over the package, adding: “This Liberal Party is out of touch with mums’ and dads’ basic needs right across the country.” The 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 (RM235,000) a year will receive a tax bonus of up to A$950 (RM2,235) 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 (RM24.44 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 oneoff windfall lump sums in uncertain times they are more likely to save it than to spend

Mitsubishi, Mazda and Subaru to sink into the red TOKYO: Japanese automakers Mitsubishi, Mazda and Subaru said yesterday they will post losses for the year through March as a deepening global slump devastates the industry. Faced with the credit crunch, Mitsubishi Motors Corp also said it would pull out of the Dakar Rally, which it has won 12 times, dealing another hard blow to world motorsports. Mazda said it would eliminate 500 more jobs. The companies said a double whammy of sliding sales and an appreciating yen were eating badly into it profits. Japan’s three biggest automakers – Toyota, Honda and Nissan – have also been hit hard, with all of them cutting jobs. The dire situation the carmakers are in marks a dramatic pullback from a year ago, when many firms enjoyed record sales and profits thanks to robust exports of small and environmentally friendly cars to the United States. Mitsubishi Motors, the na-

tion’s fourth-largest carmaker, feared that the global downturn would last well into next year. “At this point, I cannot judge that things will bottom out in fiscal 2009,” Mitsubishi Motors president Osamu Masuko told reporters. “We are bracing ourselves for an extremely difficult operating environment in fiscal 2009.” Mitsubishi forecast a net loss of ¥60 billion (RM2.3 billion) for the year to March. Analysts warned that Japanese automakers outside of the Big Three faced threats to their very survival if they cannot shift back to profit. “As automakers’ earnings have been worsening rapidly since the turn of the year, (Mitsubishi Motors’) survival will be called into question,” said Mamoru Kato, auto analyst at Tokai Tokyo Research Centre. Mazda Motor Corp, Japan’s fifth largest automaker, blamed sagging US sales for its expected

losses and said it would cut 500 jobs in Japan. Mazda will now be eliminating a total of 2,000 temporary workers in Japan. “At a time when even half of our regular workers aren’t coming to work, we can’t renew contracts for our non-regular workers,” Mazda chief executive Takashi Yamanouchi said. “We’re in a situation where we don’t know where we stand. That’s how severe it is.” Mazda, whose biggest shareholder is ailing US giant Ford, said it forecast a net loss of ¥13 billion (RM508 million). Fuji Heavy Industries, which makes the Subaru brand vehicles, said it lost US$165 million (RM578 million) in the nine months to December. The company maintained its outlook to end the financial year to March in the red for the first time since 1994, expecting a net loss of ¥19 billion (RM730 million). – AFP

it,” Turnbull said. However, official figures released yesterday suggest the first stimulus package had an effect on retail sales in December. Sales for the month were a seasonally-adjusted 3.8% higher than in November – the biggest percentage monthly rise in nearly nine years. “People were out there spending, perhaps not spending all of it, but spending nevertheless,” said NabCapital senior economist David de Garis. Turnbull said the opposition supported bringing forward personal income tax cuts, scheduled for July 1, 2009, to Jan 1 this year as an alternative to the cash handouts.– AFP

Panasonic to cut 15,000 jobs, axe dozens of plants TOKYO: Panasonic Corp said yesterday it is cutting up to 15,000 jobs and closing dozens of plants worldwide as it braces to fall deep in the red due to the global economic crisis. Panasonic expects a net loss of ¥380 billion (RM15 billion) in this financial year to March as recessions in major economies from Japan to Europe and the US prompt consumers to cut their spending. The group will shut 27 plants by the end of March and expects further closures next year, Panasonic director Makoto Uenoyama said. “We expect to close about 20% of our 239 outlets worldwide,” he told reporters. “The next fiscal year could be tougher than this year.” About half of the 15,000 job cuts, which will be completed by March 2010, will be in Japan and the rest overseas, Uenoyama said. Both temporary and regular workers will be affected. The announcement came just days after Japanese IT giants NEC and Hitachi said they were cutting a total of 27,000 jobs. – AFP

PCCW to cut costs, lay off staff HONGKONG: Telecoms giant PCCW said yesterday it plans to lay off some workers as part of cost-cutting measures to cope with slowing business growth. In a statement, the company said the cuts were “part of our normal daily business operation” and that they would not be across-the-board. PCCW did not specify how many jobs might go, although a trade union warned of up to 600 staff posts being at risk, some 5% of the workforce. – AFP