Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. Given that the Treasurer has lauded the OECD report today, I refer the Treasurer to the August IMF staff report on the Australian economy, which projects only one year of mild recession for Australia but nine consecutive years of budget deficits, which is worse than the government’s own budget in May. Treasurer, has Australia ever run nine consecutive years of budget deficits, and will you explain to the Australian people just how much upward pressure your nine consecutive years of budget deficits will put on interest rates?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for North Sydney for his question. It is the case that the IMF estimates that he refers to are somewhat lower than the medium-term forecasts that we have put in our budget. That has been obvious for a long period of time. It has taken the member for North Sydney a long time to catch up with that bit of data but it is the sort of sloppy performance we have seen from him in this House over a long period of time, such as demeaning the OECD report by claiming that it has only got two pages worth of analysis that is relevant to Australia when this is a major report of very significant standing which shows that the economic stimulus this government has put in place has had a powerful effect and has resulted in a situation where in excess of 200,000 Australians are in employment who would not have been if we had adopted the approach that had been outlined by those opposite.

Their approach is simply to sit, to wait and to see. The consequence of that approach, if it had been implemented by those opposite, would have been that Australia would now be in recession. And any of the medium-term forecasts that were in place would be far worse if those opposite had their way because the whole point of economic stimulus is to get in there and prevent the economic damage that prolonged and high unemployment and business failures do to an economy. That is the whole case for putting economic stimulus in place: to avert that damage and to avert the drop in private demand which damages the economy. None of these things are understood by any of those opposite and it just shows how unqualified they are to make any judgments about the Australian economy.

The member has mentioned the IMF. I would like to go to the IMF and quote from its managing director, Mr Strauss-Kahn, who overnight had this to say:

The global economy is starting to recover. Most data confirms global economic stabilisation …

               …            …            …

But the recovery remains very fragile. Private demand is still weak, financial tensions weigh on consumption which means there are still free resources in the economy, and unemployment will continue to grow.

The Prime Minister has already been through the conclusions of the OECD report and indeed they are very gloomy in terms of the employment outlook across the OECD. In 2010, across the OECD, we are looking at unemployment in the order of 10 per cent—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The point of order is on relevance. I asked him about nine consecutive budget deficits and the impact on—

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

Order! The Treasurer is responding to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Our response to a global recession immediately is important, and that has been demonstrated by the OECD report today. But the government, when it brought down its last budget, put in place a medium-term fiscal strategy because that is important in order to return the budget to surplus as quickly as we possibly can when the global economy recovers. And we have got our fiscal rules. We are going to put them into place. We will have our two per cent expenditure cap in place when growth moves above trend. If those opposite want to pretend that somehow Australia is completely immune from global growth, let them do so. But the one thing I can say is that Australia is in one of the best positions of any of the advanced economies to handle these very challenging circumstances, particularly when it comes to employment. And we will do everything within our power to support employment, to support business and to bring the budget back into surplus as quickly as we possibly can given the global conditions.