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aus: $26 billion stimulus package

Australia’s leader unveiled a huge new stimulus package Tuesday to try to shield the economy from the global downturn, promising 42 billion Australian dollars ($26 billion) in spending that will send the budget into the red for the first time in nearly a decade.

The package comes on top of one launched late last year worth A$10.4 billion and underscores the threat the downturn poses to Australia’s resources-based economy, which has suffered a sharp turnaround since the worldwide financial turmoil began mid-last year.

The new initiatives include building thousands of new houses and school rooms, and environmentally friendly measures including providing householders with free home roof insulation.

The cash injection over four years will plunge the annual budget into a A$22.5 billion ($14.2 billion) deficit — 1.9 percent of gross domestic product — for the current fiscal year ending June 30, Prime Minister Kevin Rudd said.

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