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

I thank the honourable member for his question. The government has been working its way through a range of options to try and assist the small business community across Australia, who are bearing the brunt of this global economic crisis. Small business is extremely important. It generates employment of a large order of magnitude across the country. There are millions of small businesses. Each of our communities is well represented by the men and women of small business who are out there, often putting their houses on the line in support of their small businesses and generating jobs for themselves and incomes to support their families.

These small business men and women have not caused this crisis—not one bit. It has been caused by other factors which have been the subject of debate here and elsewhere. The practical question we face is: how can we support those businesses? What we have done so far is implement a range of measures which assist—they do not remove or eliminate the impact on them of the global economic recession but they assist—in reducing that impact. One of those measures has been derided almost universally by those opposite, and I refer here to the measures that we have taken to support private consumption. Small business operators, as the honourable member will know from the Gold Coast, are very much concentrated—not exclusively—in the retail sector. Therefore, when you provide direct stimulus to consumption, it flows through in large part to retail.

The statistics referred to by the Treasurer before, about what happened with the retail sales figures at the end of last year, reflect therefore a direct flowthrough to small business operators. It is not the end of the story. It means that more measures must be taken, but we are acutely conscious that small businesses, out there at the front arm of retail, are bearing so much of the brunt of this impact, and therefore our direct support for consumption last year and this year is of direct relevance to them. Secondly, when it comes to the stability of the financial system and the ability of banks to provide credit at all—and I will go to the question of the extent to which banks are properly providing credit to small business in a minute—the first and foremost responsibility of this government, given the extraordinary events of last September and October, was to ensure the continued stability of the financial system, period. In this country, our overwhelming focus has been on what we need to do to make sure that Australia’s main commercial banks remain viable into the future. If you look across the world at what has happened with the mainstream banks and other major Western economies as they have fallen like ninepins, you will see that 30 of them either have collapsed or have had to be bailed out by governments. That is of fundamental and continuing concern to this government, hence the actions we took—which were, in large part, opposed by those opposite—in the double guarantees that we provided both to depositors and to banks for interbank lending. Why we provided support for interbank lending—

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