Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I thank the member for Hasluck for her question. We are witnessing the biggest global downturn in living memory. The major advanced economies are officially in recession, including the United States, the United Kingdom, Japan and much of the European area. The World Bank and the IMF now expect that global growth will fall below zero this year for the first time since the Second World War. As the government has consistently said, Australia is much better placed to resist these overwhelmingly negative economic forces coming from the global economy, but we cannot resist these forces completely. It is not good enough for the Australian government to simply sit back and allow the consequences of the global economic slowdown to wash through the Australian economy unresisted. That is why there has been significant progress that we can applaud at this weekend’s G20 finance ministers meeting in London. Their communique stated:

We have taken decisive, coordinated and comprehensive action to boost demand and jobs, and are prepared to take whatever action is necessary until growth is restored.

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Fiscal expansion is providing vital support for growth and jobs. Acting together strengthens the impact and the exceptional policy actions announced so far must be implemented without delay. We are committed to deliver the scale of sustained effort necessary to restore growth …

As members will already know, the government has taken decisive action, both through its Economic Security Strategy towards the end of last year and, at the beginning of this year, the Nation Building and Jobs Plan. We have made it plain and we have been quite honest with the Australian people that these strategies cannot resist all of the impacts of the global recession, but we are committed to doing everything possible in order to minimise those impacts on Australian working people and Australian businesses.

I would like to quote a few effective endorsements for this strategy from a variety of sources. The IMF on 6 March said, ‘Given the depth of the crisis, avoiding or postponing action is not a viable option.’ The Chairman of the Board of Governors of the United States Federal Reserve, Ben Bernanke, testifying to the US Senate on 3 March, said:

We are better off moving aggressively today to solve our economic problems; the alternative could be a prolonged episode of economic stagnation that would not only contribute to further deterioration in the fiscal situation, but would also imply lower output, employment, and incomes for an extended period.

Referring to the government’s stimulus packages, the Governor of the Reserve Bank, Glenn Stevens, said on 20 February:

Growth will be stronger than it would have been without those actions. I do not think there is any doubt about that.

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I trust, hope and expect that the main ramification is going to be that the path of the Australian economy is going to be considerably better than it would otherwise have been, and considerably better than a number of other countries around the world whom we can see contracting at a very large pace.

Yesterday, a very important voice was added to these voices indicating that the path of significant stimulus—to generate and sustain growth and jobs—is the right path. That is, of course, President Obama of the United States, who, according to AAP, at a press conference, supported the need for major stimulus actions throughout the major economies of the world and, in doing so, cited Australia as a specific example of a nation that was doing the right thing in stimulating economic activity, in supporting jobs and growth.

Unfortunately, there is one significant element of the picture that does not quite get it, and that, of course, is the opposition, who believes that we should just sit there and wait and see what happens. Clearly, one would have to speculate that there is something of a political consideration in the assessment by the Leader of the Opposition. His hope is that things deteriorate, and that changes the political calculus. He is choosing to gamble with the jobs and the livelihoods of Australian workers and Australian businesses. Unfortunately, that gamble has a serious set of implications for the Australian economy and for jobs and growth generally. It is a gamble that we as the Australian government cannot afford to take. We cannot afford to sit back and allow the consequences of the global recession to knock Australian businesses and Australian workers for six. We are committed as a government to stimulating economic activity, to supporting jobs, to supporting growth—as are other governments around the world, particularly the United States government and President Obama.

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