Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the consequences for the economy if we underestimate the threat posed to jobs and growth by the global recession?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Flynn for his question. I know that working families in Flynn are feeling the full heat of this global recession. It is impacting in his community, and I acknowledge the very strong representations that he is making on behalf of working families in the electorate of Flynn. Australia is battling a global recession, and it is felt particularly savagely in a community like Gladstone and the wider area of Central Queensland. The impacts are there and they are immediate. What do they flow from? They flow directly from a global recession.

We can see what has occurred in the United States, which has shed something like half a million jobs per month in the past three months. Job losses of this magnitude are unprecedented in the 70-year history of the data series in the United States. We have seen a rapid deterioration around the world. Not only did the US economy contract by one per cent in the December quarter—its worst performance since 1982—the Euro and UK economies contracted by 1.5 per cent, the sharpest quarterly contractions in that area since the early 1980s, and Japan contracted by a staggering three per cent in the December quarter, the largest contraction since 1974. Also, in recent days, we have seen contractions in Taiwan and Thailand, 6.1 per cent; Korea, 5.6 per cent; and Singapore, 4.5 per cent. And it is likely that growth in China, which has been the powerhouse of the global economy in recent years, could grind to a halt in the December quarter.

That is sobering news for this country, because it describes the sharpest synchronised downturn in the global economy in our lifetimes. At the moment, something like seven of our top 10 major trading partners are already in recession. Of course, this has very serious impacts on our economy. It will wipe around $60 billion from the value of our exports this year alone. It will mean that jobs are lost in the Australian economy—such as we have seen today with Pacific Brands. We on this side of the House understand how serious the global recession is and how important it is to act and to support economic growth and jobs. The IMF and most respected economists the world over have the view that it is important that governments take decisive action to stimulate the economy—and, of course, that is precisely what we have done.

In the middle of all of this global carnage, it simply beggars belief that anybody could underestimate the size, nature and power of this challenge, but it is far worse when it comes from people who should know better and are supposed to exercise economic leadership in this place—and, of course, that is the opposition. The Leader of the Opposition said last year that the global financial crisis, which has turned into a global recession, was ‘overhyped’. The shadow Treasurer said it was all manufactured, and I quote: ‘They are trying to manufacture, you know, a crisis’—as if all of these events were not happening then and have not accelerated in recent times. Anybody who was watching Senate estimates today could see how the Liberal and National parties do not understand the nature of the challenge that we face. They simply do not understand it.

Of course, there is someone else who comes from the school of economics that those opposite come from, which says, ‘Do nothing; let people go to the wall; just make a political point.’ As the Prime Minister said before, the Leader of the Opposition in Queensland, Mr Springborg, said that the global financial crisis and recession is ‘only peripheral to what is happening in Queensland’. I tell you what: it is not peripheral in Gladstone. The member for Flynn knows that. It is not peripheral right up the Queensland coast. It is not peripheral in the great mining towns of Queensland. And it is not peripheral in the urban centres of Queensland. The transmission channel of this global recession goes straight to the traded goods sector and straight into those parts of the country that have been participating in the mining boom, which has now unwound. It has unwound and we are now living with the consequences.

What is it with these people—the Leader of the Opposition, the shadow Treasurer and the Leader of the Opposition in Queensland? They are three peas in a pod all living in a fantasy world of economic denial. These are serious times, and my message to the shadow Treasurer is pretty simple: do your homework; do some hard work; come up with some alternative policy; put up some positive alternative; and give up the pointscoring. The unemployed of this country deserve far better.

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

Mr Haase interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Kalgoorlie will withdraw.

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

Here we go again, Mr Speaker. He is a dud, but if it suits the House I withdraw.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Kalgoorlie will withdraw from the House for one hour under standing order 94(a).

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

Thank you for the opportunity, Mr Speaker.

The member for Kalgoorlie then left the chamber.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, as a matter of courtesy, I was going to call your attention to the presence in the gallery of another treasurer, whom I thought you may have welcomed to this House. Maybe he has left in disgust.