CANBERRA, Sept. 6 (Xinhua) -- Australian Prime Minister Scott Morrison has rejected calls to significantly boost infrastructure spending.
Morrison on Thursday told reporters that the government does not have much room to move on infrastructure projects.
Philip Lowe, governor of the Reserve Bank of Australia (RBA), has called for the government to boost spending on public works to boost Australia’s struggling economy.
Data from the Australian Bureau of Statistics (ABS) released on Wednesday revealed that Australia’s Gross Domestic Product (GDP) grew by 1.4 percent in financial year 2018-2019, which is the slowest annual growth since the Global Financial Crisis (GFC) in 2009, according to the local media.
Morrison and Treasurer Josh Frydenberg maintain that their pledged 100 billion Australian dollar (68.1 billion U.S. dollar) infrastructure spend will be sufficient.
"We are really starting to hit our head on the ceiling in terms of how much infrastructure work you can get under way at any one time," Morrison was quoted by The Australian Financial Review as saying.
"And that’s actually putting some cost pressures into the system."
Morrison and Frydenberg are relying on tax cuts worth 158 billion AUD (107.6 billion USD) passed by parliament to provide a much-needed stimulus.
Frydenberg has indicated that any extra stimulus would not arrive until the May budget which would contain tax incentives for business to boost investment.
Jim Chalmers, opposition Australian Labor Party’s treasury spokesperson, said that delaying the package would create an investment pause.
"He obviously hasn’t thought this through. Signalling to business that there are incentives coming but not for nine months risks actually chilling investment in the near term while businesses wait for the budget," Chalmers said.
"This approach would actually deter and defer business investment rather than incentivize it. No wonder the economy is floundering and growth has slowed on his watch.”