AUSTRALIA’S banks will be paid up to $20bn over the next decade by the federal government to fund capital spending to help boost economic growth.
Key points:The $20.7 billion capital fund will be a fund for new loans and investment projectsThe federal government said it would use the fund to finance the construction of 1.5 million new homes over the lifetime of the scheme, which was announced on Monday.
Prime Minister Tony Abbott’s government has been criticised for taking a risk on the scheme.
Mr Abbott said he wanted to see “robust and efficient capital spending” in order to support job creation and economic growth, but also to help stimulate investment.
The $200bn capital fund would be used to fund a new range of loans and investments, including $3bn to help finance the building of 1,000 new homes.
The scheme was announced as Mr Abbott sought to boost job creation.
“I am very pleased to announce that I will be investing $20billion over the course of the next four years to support the construction and operation of 1 million new residential homes,” he said.
“These are the first homes to be built in Australia since the Great Depression.”
The federal Government’s target is to build 1.7 million homes over four years.
It will also pay up to the state and territory governments $500 million over the same period, and provide a $200 million concessional loan to help support new infrastructure and housing projects.
“We are providing a new, safe and secure environment for the future,” Mr Abbott said.
“But we also need to ensure we’re spending our money wisely.”
Mr Abbott also announced the creation of a new superannuation fund for the superannuiters.
The government said the super fund will invest $400m in new super and concessional funds.
It is expected to have a net worth of $2.3 trillion by the end of the fund’s lifetime.