Jodie Campbell (Bass, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. What impact has the government’s stimulus packages had on the Australian economy and what assessments have been made of that impact?

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

I thank the member for Bass for her question. I commend her also for her work with small businesses in her electorate, which I was fortunate to meet with her recently. In late 2008 and early this year the government put in place two stimulus packages involving some immediate spending on cash payments; some medium-term investment in infrastructure, such as building new school buildings across Australia; and substantial longer term investment in infrastructure in areas like road, rail and ports. This strategy was necessary because we were seeing unfold before our eyes a collapse in global economic activity across the world that was already starting to reverberate through the Australian economy, threatening hundreds of thousands of Australian jobs and thousands of Australian businesses.

It is now 10 months or so since that first package was put in place and it is clear that that stimulus strategy is working and is going to continue to work. You can see that through the statistics with respect to retail spending, particularly when compared with like countries; you can see it in business investment data; you can see it in employment data; and you can see it in recent confidence levels, both business confidence and consumer confidence. It is very clear that Australia is in much better shape than comparable countries and it is in much better shape than it would have been had the government not acted very quickly to put stimulus into the economy to sustain economic activity and to sustain jobs.

Having said that, the road ahead is still very challenging and the risks that are there in the international economy are many and varied. But it remains absolutely clear that had the government not taken that decision to stimulate economic activity we would now be in a position with much, much higher unemployment and a large number of business failures.

I would like to draw the House’s attention to the statement by the Reserve Bank governor on Friday, when he said:

… I think an objective observer would say that the size and speed of that response has been one of the important factors in supporting private demand over the past nine months.

Yesterday the Secretary to the Treasury said very much the same thing.

Of course, we know that the Liberal and National opposition opposed the government’s stimulus strategy. They initially said it would have no impact. Then they changed gear and said: ‘Well, it will have a little bit of an impact. That’s because there’s just so much money. It is unavoidable that it will have some impact.’ Now they have got to the point of saying it is having too much impact and that it needs to be wound back because otherwise you will overheat the economy and put upward pressure on interest rates. In each case one thing stands out about their approach to this issue, and that is that their analysis is not driven by objectivity, not driven by any desire to understand the problems or the challenges of the Australian economy but driven by a desire to make short-term political points, driven by an intention to snipe at the government and to find fault with the government irrespective of the merits of the issue.

I have a simple message for the Leader of the Opposition, and that is that, although the Australian people understand that the political process involves a bit of heat and light, a bit of argy-bargy, a bit of colour and a bit of rhetoric, ultimately underneath all that they look for judgment in their leaders. And the one thing that the Leader of the Opposition has consistently shown in this debate is his lack of experience, his impetuousness and his lack of judgment. The Australian people want judgment in their government, and that is what the Australian government has shown, under the leadership of the Prime Minister and the Treasurer, to deliver the stimulus packages to sustain employment and business in our economy.