Swan keeps stimulus cash tap open

31 Aug 2009, 10:57 am   -   Source: AAP
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The Treasury has warned halting government stimulus spending would risk stalling the economy. (AAP)

The Treasury has warned halting government stimulus spending would risk stalling the economy. (AAP)

Treasurer Wayne Swan says that withdrawing the government's stimulus spending now would knee-cap the nation's economic recovery and cost thousands of jobs.

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Treasurer Wayne Swan says that withdrawing the government's stimulus spending now would knee-cap the nation's economic recovery and cost thousands of jobs.

He says the economic stimulus is the only reason why Australia's one of two advanced economies that grew in the March quarter.

"The economic stimulus at the moment is vital to supporting business to keep customers coming through the door," Mr Swan said.

"Of course stimulus is temporary and is targeted and it is designed to be withdrawn from year's end as the economy recovers.

"Stimulus will be withdrawn as the economic recovery proceeds globally."

Ahead of the Reserve Bank's monthly meeting on Tuesday Mr Swan said governor Glenn Stevens had said rates would go up at some stage in the future as rates were at their lowest in about 50 years.

He would not comment on the outcome of the upcoming meeting. "That is entirely a matter for the Reserve Bank."

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