Australia Plans $26 Billion Stimulus Package

CANBERRA, Australia (AP) -- Australia's leader unveiled a 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 ($7.4 billion) and underscores the threat the downturn poses to Australia's resources-based economy, which has shuddered to a near halt since the worldwide financial turmoil began mid-last year.

Two hours after Prime Minister Kevin Rudd's stimulus announcement, the central bank slashed the benchmark cash rate by a full percentage point to 3.25 percent in another bid to reinvigorate the stagnating economy. It was the lowest level since the Reserve Bank of Australia took control of monetary policy 19 years ago, and the lowest money market rate since 1964.