28/05/2009 - 09:13

Stimulus payments go offshore, 6ft under

28/05/2009 - 09:13

Bookmark

Save articles for future reference.

The federal government has defended stimulus payments to 16,000 dead people and 25,000 expats, worth a collective $40 million, saying it was "unavoidable".

Stimulus payments go offshore, 6ft under

The federal government has defended stimulus payments to 16,000 dead people and 25,000 expats, worth a collective $40 million, saying it was "unavoidable".

The Australian Tax Office says the cost of the tax bonus payments made to dead people is likely to exceed $14 million while another $25 million has been sent to about 25,000 Australians living overseas.

Small Business Minister Craig Emerson said the payments is only a fraction of the billions of dollars paid out as tax bonuses.

"Around 99.5 per cent of the stimulus money went exactly where we intended it to go," Dr Emerson told ABC Television, adding the government faced two choices when making the payments.

"Do you sit and wait and try and get that up to 100 per cent and have no stimulus ... or get the money out to support Australian jobs."

Dr Emerson said the could not "without authority" confirm the amount paid out was $40 million.

The federal opposition has rejected government assertions the payments were unavoidable.

"It just demonstrates the absurdity of this cash splash," Opposition Leader Malcolm Turnbull told reporters.

It was "an incredible example of the reckless way" the government was borrowing billions and spraying it around.

Labor did not understand they were spending other people's money.

"Just shrugging your shoulders and saying it was unavoidable when you're wasting billions of dollars of reckless spending is not good enough," he said.

Earlier Finance Minister Lindsay Tanner said it was a "ludicrous proposition" to suggest the government should have ascertained who was dead and who was living overseas before the payments were made.

That data was not available at the time and would have taken months to accumulate, he said.

Liberal MP Stuart Robert said stimulus payments also went to prisoners and pets left with estates after their owners had died.

"This whole thing is bungled, it is rushed," he told reporters.

Labor MP Janelle Saffin said the payments to the dead were not an error, because that was how the tax system had worked for many years.

"Yes, it's unfortunate and sad that sometimes people die and that money goes to their estates," she said.

"No-one is going to change the system while we are in the middle of a global economy sort of falling off the cliff."

Liberal MP Dennis Jensen said payments to dead people and expats would do nothing to stimulate the economy.

"This shows this has been very much a knee-jerk spending reaction and it hasn't been well thought through," he said, questioning how dead people were going to stimulate the economy.

Liberal colleague Jamie Briggs said it was unfair lower-income earners had missed out on stimulus payments while dead people and expats were paid.

"They can't understand why a prime minister ... stood in front of the television camera and told them everyone who didn't earn over $100,000 would receive $900," he said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options