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BHP urges caution over stimulus withdrawal

BHP Billiton remains "cautious" about the state of the global economy and has warned governments to be careful how they go about winding down stimulus packages.

Chairman Don Argus, who retires at the end of the month after more than a decade in the role, said it is imperative that the impact of any policy and tax changes should not hinder investment and the capacity of economies to grow.

"We are very mindful that most countries have difficult decisions to make regarding a wind back of stimulus packages, against the backdrop of financial services sector reform, and how they boost economic growth," he wrote in a final letter to shareholders.

"Governments play a key role in spurring productivity, encouraging investment and fostering international competitiveness. Ultimately policies which reduce free cash flow available from profits generated after paying tax could affect a company's capacity to pay future dividends to its shareholders."

BHP maintained its progressive half year dividend of US 42- per share and says it remains committed to increasing capital expenditure and will spend around $20bn next year.

That number includes a US$5.8bn equalisation payment for the Western Australian iron ore production joint venture with Rio Tinto which it feels can be finalised this calendar year.

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