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Stimulus package 'knee-jerk' response to crisis: Howard

19 Feb 2009 8:19 PM

MELBOURNE, Feb 19 AAP - The federal economic stimulus package is a knee-jerk reaction to the world economic crisis that will plunge Australia into debt for decades, former prime minister John Howard says.

Speaking to Liberal Party members at the party's Melbourne headquarters on Thursday night, Mr Howard said the federal government risked repeating economic mistakes of the 1970s with its $42 billion spending package.

"Our circumstances here in Australia do not warrant a knee-jerk return to the policies which delivered stagflation in the 1970s and early '80s," he told about 300 of the party faithful.

"We should not be panicked into financial profligacy and the burdening of future generations of Australians with huge amounts of debt."

Mr Howard said it took 10 years for Australia to repay $96 billion in federal debt left when his government came to office.

"We can only contemplate the length of time needed to liquidate the $200 billion of debt at the very least our nation now faces as a consequence of recent policy decisions," he said.

"Malcolm Turnbull and his colleagues were absolutely right to oppose the government's stimulus package.

"It needlessly plunges Australia deeply into debt with a poorly-targeted spending spree."

Spending measures should be reduced but be targeted to removing obstacles for employers to hire new staff as the crisis progresses, Mr Howard said.