James Stevens (Sturt, Liberal Party) Share this | Hansard source

Well, of course, yesterday it was terrible—though probably not surprising—to see confirmation that we are now technically in a recession in this country, with the ABS June quarterly GDP figures showing a seven per cent drop in our GDP—the most significant quarterly drop since the Second World War. Unfortunately, in March—though it was much smaller—we also had a reduction. Thus now we've had two quarters of a reduction in our GDP, which meets the definition of a recession.

There are two components to that figure announced yesterday: one we do know and one we don't know. What we do know is that, compared to so many other economies around the world, particularly nations comparable to Australia, comparatively that is the smallest reduction in GDP, when you compare it to nations in Europe and other nations like the United States et cetera. Seven per cent is nothing to be proud of, but it could have been so much worse. That's the second point about that figure: we'll never know how bad and how significant the reduction in GDP for the June quarter and the March quarter, and future quarters, could have been if we hadn't taken the action that we took—that the Prime Minister and the cabinet took—to ensure that we limited the economic impact of this coronavirus pandemic on our nation.

There are three components to what could have happened. One, of course, did happen, which is that we did, for health reasons, need to make decisions to curtail the normal activity of life in this country and request and require certain businesses to not continue to operate so that we could limit the transmission of the disease in those early stages. That was obviously an enormously stressful and difficult proposition for so many businesses who were confronted with the proposition of whether they would have a livelihood anymore and how long they might have to try and survive, if they could survive—for days or weeks, let alone months. That was something the government needed to confront.

As to the second and third elements of that, had we not undertaken the support that we did, particularly for those businesses that had an impact through the restrictions that we put in place, what might those businesses have had to do? Were they going to have to lay off significant numbers of their employees? They simply would not have been able to meet their wages bill. If that happened, would employees who were no longer employed suddenly dramatically contract the consumption that they would normally undertake in our economy? So, quite rightly, we as a government announced a series of measures—the cornerstone of which was of course the JobKeeper program—that put us in a position to say to businesses: 'We don't want you to have to make any difficult or tough decisions about reducing your employee count. We don't want you to have to make a decision, when there is so much uncertainty before us, about reducing employees. Maybe you can't afford to keep them on right now ,or you think you won't be able to keep them on much longer, and you want to make that difficult decision as early as possible to reserve your cash flow and your cash reserves.' The JobKeeper program will undoubtedly go down in history as one of the greatest economic responses to a crisis that could not have been predicted. The crisis was not the fault of anyone in this country—in particular, our government. It was thrust upon us, out of nowhere, and it required a very dramatic response and a very significant response. That is exactly what our government delivered, and the success of that cannot be understated.

We've obviously announced a whole range of other economic programs to respond to the challenges of this. But in a week like this, where we have tragically had confirmation of a significant reduction in the size of our economic pie, our GDP, what's very important to remember is that it could been so much worse if we hadn't made the decisions that we made very early on, and very significantly, to make sure the health challenges of this pandemic didn't turn into a dramatic economic challenge because so many businesses were left alone with no support from their government to help them through. We certainly have done that. There is more to be done, and we will continue to do more, and a lot of the programs we have announced are going to continue for a long time into the future. I'm proud to be part of a government that has risen to the dual challenges of addressing an unforeseen and frightening health pandemic and ensured that we are providing support so that our economy can recover on the other side of this challenge.

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