The Federal Government will join with commercial banks as part of the Australian Business Investment Partnership in a $4 billion project to support the commercial property sector. Australia’s four biggest banks will provide $2 billion, matched by the government’s $2 billion, to go to a variety of projects including office, retail and factory developments.
The government was compelled to provide the funding, as local banks were increasingly hard-pressed to find money from foreign sources in a tight credit market, said Prime Minister Kevin Rudd.
“The Australian economy is global in nature and therefore affected by the health of foreign banks, as well as Australian banks,” he said. “If foreign banks do not roll over their share of these loans it would be difficult for Australia’s four major banks to fill this gap on their own.”
Government involvement was temporary but necessary, as the alternative was to do nothing, Rudd noted. “The government I lead will not embark upon that course of action.”
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