Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister outline to the House developments in the international economy and how the Australian government is taking decisive action to cushion Australia from the worst impacts of the global recession?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for Petrie for her question. The World Bank overnight lowered its economic growth forecast for China. This is of direct relevance to the Australian economy. China is now expected to grow at 6.5 per cent in 2009. This is down from nine per cent in 2008 and 13 per cent in 2007. This is partly driven by weaknesses in the global economy causing significant falls in private sector investment. It has also been caused by falling Chinese exports. We have seen China’s exports down 21 per cent year on year, on average, in the first two months of 2009. These are very large numbers with global significance. China’s economic growth has a direct effect on Australia. China is Australia’s largest trading partner. It takes 13.6 per cent of our exports, $31.4 billion in 2007-08.

These results on China’s exports follow a broader trend of falling world trade. Volumes of world trade in 2009 are predicted to contract for the first time since 1982. The fall in global trade highlights an important element of the upcoming G20 agenda, which is preventing emerging protectionism. The World Bank also released a report last night on protectionist measures that have been introduced since this crisis began.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

Mr Hunt interjecting

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The report indicates that 78 protectionist trade measures have been proposed or implemented since the start of the financial crisis. It is essential that G20 leaders make a firm commitment to avoid protectionist measures.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

Mr Hunt interjecting

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The World Bank President, Bob Zoellick, said yesterday:

Leaders must not heed the siren song of protectionist fixes, whether for trade, stimulus packages, or bailouts. Economic isolationism can lead to a negative spiral of events such as those we saw in the 1930s …

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

Mr Ciobo interjecting

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I note the rolling series of interjections from those opposite, who do not regard this crisis as real. It is a stark reminder of the fact that those opposite seem to exist in some sort of self-contained political bubble. The world is grappling with a real problem, a real crisis, and we are seeking as a world community to deliver responses to that crisis. Those opposite seem to be engaged in a political conversation known only to and understood only by themselves.

Dealing with protectionism, whether it is financial protectionism or protectionism in goods and services, is of critical importance for the future. If we fail to do so, we will not be heeding the lessons of the 1930s. If we fail to do so and resort to new forms of financial protectionism then we will see the emergence of a new form of protectionism which would become the 21st century equivalent of the Smoot-Hawley tariff of the 1930s. These things must be avoided, and it requires, therefore, concerted global action and concerted global leadership in order to do so.

On the domestic agenda, the government’s response to the global economic crisis—this global economic storm—has been to embrace a course of action to reduce the impact on unemployment and on Australian families. We have done that in three specific areas under our economic stimulus strategy: first of all, to continue to take action in support of the stability of Australian financial markets, anchored in our guarantee to Australian deposit holders. On top of that, we are also investing in critical areas to support the Australian finance industry, most particularly through the Business Investment Partnership. We are, secondly, engaging in direct support to employment for 1½ million Australians who work in the Australian retail industry, through the support that we have provided to consumption and the payments we have made to pensioners, to carers, to veterans and to others, because those 1½ million jobs are important. On the debate just before about employment impacts across the economy: it has been important to see recent statements by some of our leading retailers about their plans to add to employment in the year ahead, which is remarkable given the stress which the economy generally is under as a consequence of the global recession. The third element of our strategy is to engage in long-term investment and infrastructure, in school building and in public housing, as well as energy insulation to ensure we are also doing our bit to draw down greenhouse gas emissions. Finally, what we are doing in addition to these three sets of measures is embracing new and additional measures to support those who, through no fault of their own, lose their job.

These constitute the core elements of the government’s strategy at home for dealing with the overall impact of the global recession on Australia. This must occur in harmony with what we do globally as well—which brings us back to the agenda which now looms for G20 leaders at the summit which will be held in London in a week or so—because each of the domestic measures that I have just referred to in my remarks to the House has direct parallel with international measures: firstly, financial markets and their stability globally, dealing with toxic assets, properly resourcing the International Monetary Fund and reforming its governance; secondly, dealing properly with coordinated fiscal stimulus worldwide so that all economies are raising activity at a time when the private sector is in retreat; thirdly, acting in concert with our partners to ensure that we are bringing about a proper regulatory system for the future; and fourthly, acting on protectionism as well.

I conclude my remarks where I began as a response to the interjection by those opposite. Those opposite exist in a parallel universe. Those opposite exist in a universe completely disconnected from what is actually going on in the global economy and its roll-on consequences for Australians, their jobs, their families and their communities. The government strategy is clear cut, but I would say to those opposite—as, during the break, they wrestle with the rolling leadership tensions between the member for Higgins and the member for Wentworth—that the nation expects a little better of a party which seeks to put itself up as the alternative government of Australia. This is a time of deep national economic crisis. What we need is not simply an opposition which opposes everything and proposes nothing, an opposition which simply says that the best thing to do is to sit, wait and do nothing. What the nation expects is for leadership to emanate from this parliament to deal with the challenges which the global economy has delivered us. That is the government strategy. I would challenge those opposite to support such a strategy.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. Why has the Prime Minister wasted $23 billion on his cash splashes while cancer patients and young couples on IVF treatment are reportedly set to face higher Medicare costs? Hasn’t the Prime Minister made matters worse by cutting funding from those who are sick and vulnerable to help fund his $23 billion cash splash?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I am taken by the Leader of the Opposition’s reference to health priorities in Australia on a day when those opposite have voted to return $1.6 billion over time to the distilling industry through a tax loophole with a direct impact on hospital emergency services across Australia. They do not like this matter for debate. They do not wish to be confronted with the absolute hypocrisy of their position on the health debate in general and on the impact on families more generally, because the actions they have taken in the Senate to deliver a $1.6 billion gift to the alcohol industry of Australia have their direct consequence in the hospital emergency departments of Australia.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance. The question was about cancer patients and young couples seeking IVF being denied support by this government.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Leader of the Opposition will resume his seat. The question went to the $23 billion package and then to health matters.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I listened very carefully to the intervention by the Leader of the Opposition. It goes to the fiscal capacity of government to deliver health services. If you are going to rip $1.6 billion out of the budget by returning that amount of money to the alcohol industry, where are your priorities, Leader of the Opposition? I would say to the Leader of the Opposition that the Liberal Party have demonstrated themselves to be so out of touch on the question of the measures they have taken in the Senate to provide these alcopops to young Australians, young girls in particular, by the irresponsible actions they have taken. Each and every one of them should just hang their head in shame. This is the ultimate triumph of their ideology. It says, at the end of the day: just oppose anything which might add up to a tax impost, even if it is on the alcohol industry, even if it deals with protecting our young people, even if it deals with the burden felt by our emergency services departments across Australia.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. This cannot be relevant when I offered the Prime Minister this morning the opportunity—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Dickson will resume his seat.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Thanks to the Liberal Party, what we have is teenage girls now being able to use their pocket money to pay for alcopops, alcoholically powerful drinks, because those opposite wanted to give a tax gift to the alcohol industry in Australia. Any responsible Australian would hang their head in shame at the decision the opposition have taken at the behest of the alcohol industry in Australia.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order: relevance. Any responsible Prime Minister would hang his head in shame—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Prime Minister will respond to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Not only did those opposite, when in office, pull a billion dollars out of the public hospital system of Australia but they have now returned $1.6 billion to the alcohol industry. What does that say about priorities? In their heart of hearts, each of them over there knows that what they have done is wrong. They actually know that what they have done is wrong. That is why this debate hurts them so much individually. It is the triumph of their ideology over what is decent and practical common sense. When you look at the events of this week in parliament, what we have seen is the Liberal Party and the National Party united on just two measures: how to cut workers’ wages, through their position on Work Choices, and how to cut the price of alcopops for young Australians.