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

The Leader of the Opposition has asked this question in various forms across the course of the week and each and every time he does so he exposes his lack of competence in economics and the fact that the opposition wanders around pretending that the global financial crisis did not happen. I presume that if a journalist asked the Leader of the Opposition at a press conference if the global financial crisis happened, he would do what he normally does when confronted by hard questions, and that is, turn on his heel and end the press conference.

But, yes, the global financial crisis did happen. Yes, it did have implications for the Australian economy. And, yes, there are ongoing implications for government revenue, and our economy is being transformed by a high and sustained Australian dollar, sustained high at 50 per cent above recent levels—a 50 per cent appreciation in a very limited number of years. It has been sustained high despite a decline in our terms of trade and sustained high despite a reduction in interest rates. With these factors working in the global economy and in our own economy, we are seeing implications for government revenue that have been made clear during the various budget updates, including the Mid-Year Economic and Fiscal Outlook.

In those circumstances you are presented with a very stark choice: you can either support growth and jobs or—which I assume is what the Leader of the Opposition is saying he would do if he were Prime Minister—cut and cut and cut. Let's be clear about the dimensions of the kind of cuts required. If that had been the approach taken during the depth of the global financial crisis, you would have needed to have done something as significant as ending all payments to aged pensioners.

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