AUSTRALIA:THE AUSTRALIAN government is to spend 10.4 billion Australian dollars (€5.3 billion) to stimulate domestic spending in the latest in a series of initiatives intended to protect the country's cooling economy from the slowdown induced by the credit freeze.

Prime minister Kevin Rudd said the day to begin spending the country's forecast budget surplus of 21.7 billion Australian dollars in 2008-2009 had arrived. He said the global financial crisis was equivalent to a national security crisis hitting the real economy, jobs growth and the stock market.

"The global financial crisis has entered into a new, dangerous and damaging phase," Mr Rudd said after unveiling his so-called economic security strategy that would assist pensioners, low- and middle-income families, and first-time housebuyers. "That's why the government has decided to act decisively and early."

Australia is in its 17th year of growth but signs of a slowdown are becoming more prevalent.

The government said this week the unemployment rate would exceed its budget forecast of 4.75 per cent by the middle of next year, while the Reserve Bank of Australia surprised financial markets a week ago when it unexpectedly cut its benchmark rate by a full percentage point, its biggest cut in 16 years.

The central bank warned that the deterioration in global growth, together with tougher conditions even for creditworthy borrowers, meant demand and output could be "significantly weaker than earlier expected". - (Financial Times service)