Australia may bring forward tax cuts to aid economy

Australia's government is considering bringing forward large tax cuts planned for 2010 to help stimulate the economy in the face of worsening global conditions, local media reported.

The government has already delivered a A$10.4 (NZ$12.45) billion economic stimulus package targeting poorer families and pensioners, but believed more action may be needed.

A A$3.4 billion tax cut was locked in from July 1, 2009 and the government was thinking of bringing forward a further A$4.5 billion in cuts planned for mid-2010, the Australian newspaper said, without revealing its source.

"We are certainly all in this together, Australian families, businesses large and small, and the Rudd Government. We stand ready to take more decisive action should the international situation deteriorate," Treasurer Wayne Swan told the paper.

Prime Minister Kevin remains hopeful Australia can avoid a recession already gripping major world economies, although the International Monetary Fund recently called on the government to do more to strengthen the $1 trillion economy.

A survey this week showed job advertisements slumping 9.7 percent in December to recessionary levels. Economists expect unemployment to hit 6 percent this year, up from 4.4 percent in November.

Australia's independent central bank has already slashed 3.0 percentage points from its key cash rate, taking it to a six-year low of 4.25 percent, and markets are pricing in another cut to 3.5 percent at the bank's next meeting on Feb. 3.

- Reuters