Murdoch criticises Australia election spend

ADELAIDE, Nov 13 (Reuters) Media magnate Rupert Murdoch weighed into Australia's election race today, warning big spending promises in his birth country and adopted homeland the United States were making people too reliant on welfare.

But the Australian-born Murdoch refused to choose sides in Australia's election contest, where both major candidates have promised billions of dollars through similar policies if elected.

''I'm finding it difficult, as an outsider coming here for two days, to distinguish between them,'' Murdoch, executive chairman of global media organisation News Corp, told reporters.

Murdoch is one of the world's most powerful media barons with newspaper, television and Internet interests across the globe. He is Australia's biggest newspaper publisher.

Australia goes to the polls on November 24 with conservative Prime Minister John Howard, 68, struggling for support after 11 years in office and with polls pointing to a solid victory for his Labor rival Kevin Rudd, 50.

The contest has been dubbed a ''me too'' election, with Howard and Rudd mirroring each other's policies, with almost identical promises on tax cuts, money for older Australians and focus on education and childcare.

Rudd has built an imposing poll lead by promising generational change and ''fresh thinking'' including a commitment to sign the Kyoto climate pact and withdraw front line troops from Iraq. Both sides have promised conservative economics.

Both Rudd and Howard have made more than 44 billion dollars in election promises, with Howard yesterday unveiling an extra A.4 billion in new spending over five years aimed at middle Australian families.

Murdoch said both sides of Australian politics were making spending promises which would make people more dependent on the state, rather than more self-sufficient, with a similar move happening in the United States.

''The more people become dependent on the State, the less aspirational they become and slow the country down,'' he said. ''Go to the United States and see the same thing happening.

''And that is not the spirit of certainly this country when I grew up, or the spirit as I understand it to be.'' The Australian Financial Review newspaper yesterday said Howard had set ''a new land spending record'', at a time when the central bank is warning about growing inflationary pressures, and with economists warning of more interest rate rises to come.

But Howard rejected suggestions his spending promises would add to inflation, saying he would continue to deliver a budget surplus of about 1 percent of gross domestic product.

''We are going to be left with a very big budget surplus. The funding is occurring out of increased levels that are the result of a strong economy,'' Howard said on Tuesday.

Rudd will deliver his major campaign speech in Brisbane tomorrow, where he is also expected to unveil new spending, although he has promised Labor's commitments would be more restrained than Howard's.

Commonwealth Securities chief economist Craig James said today the spending promises needed to be kept in perspective.

''The politicians haven't lost their heads, seemingly engaged in a race to see who can spend the most,'' James said, adding the government collected about A0 billion a year in taxes and spent about A0 billion a year.

REUTERS SKB BD1445