Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Hansard source

As members of this parliament are well aware, and as many Australians are thinking and talking about, we confront the most difficult global economic circumstances in a quarter of a century. We have seen major falls in the United States stock market. Global stock markets have fallen by more than 20 per cent since the recent round of instability began and markets continue to be volatile. Overnight the US Treasury Secretary testified before the Senate Banking Committee. He urged support for the US government’s plan for major financial institutions and he stated that, to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families’ financial wellbeing, the viability of businesses, both small and large, and the very health of our economy, the measures taken in the US were necessary.

The US Federal Reserve chairman also noted overnight that difficult conditions are likely to persist. He said:

Despite the efforts of the Federal Reserve, the Treasury, and other agencies, global financial markets remain under extraordinary stress.

These are difficult circumstances, but it is important to understand that this nation is better placed than most countries to deal with this turmoil. We have a strong, well-regulated banking sector. Australian businesses are continuing to undertake record levels of investment. We have taken further steps to strengthen Australia’s financial markets and we have built a strong surplus, which we need more than ever as a buffer to help withstand these challenges.

The Treasurer and I today commented on the release of the most recent International Monetary Fund report on this country’s circumstances. It noted that this country does have a prudent fiscal policy and it noted, with approval, the budget surplus settings of the government. It also noted the well-regulated nature of our financial markets and it welcomed the government’s major reform agenda working through the Council of Australian Governments to achieve profound reforms that will make a difference for this nation’s future. Intergovernmental agreements can be complex, but for Australians this is about better schools, better hospitals, a national approach to climate change, a national approach to homelessness, working together to close the gap on Indigenous disadvantage for Indigenous Australians and working together for a seamless national economy. These are the major issues of our time, and we are working to bring this profound round of reform to this country.

The government is also working through the Senate to deliver its budget. And, of course, in delivering that budget—in delivering that all-important surplus—we continue to face obstruction and economic vandalism from the Liberal Party. It seems even with a new leader the Liberal Party is intent on derailing the government’s fiscal policy direction. To take one example of this—though, of course, we have heard of many—the position of the Liberal Party on the Medicare levy surcharge shows just how out of touch it is with the needs of this nation to deliver a budget surplus and just how out of touch it is with Australians. This is a measure that would provide 330,000 Australians with up to $1,500 in tax relief per year—a tax cut for those working Australians—and the Liberal Party is standing in the way of it.

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