Julie Collins (Franklin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister update the House on the latest economic data and the government’s ongoing strategy to tackle the continuing global recession?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Franklin for her question. As a Tasmanian member of this place, I know that she and other members are acutely concerned about the impact of the global recession in all states in Australia and across her state as well, and what practical actions can be taken to reduce the impact of the global recession.

There have been a number of releases of data over the last 24 hours which show that, while Australia is continuing to weather the storm of the global economic recession better than most economies, we are by no means out of the woods yet. Overnight and today the new Westpac-Melbourne Institute index of consumer sentiment report was released, dated 9 September. The Westpac-Melbourne Institute index of consumer sentiment rose by 5.2 per cent in September to its highest level since July 2007. To quote the Westpac Chief Economist, Bill Evans, ‘This is a truly extraordinary result.’

Consumer sentiment is 34.4 per cent higher over the last four months. The consumer sentiment is now 45.4 per cent higher than October 2008, when the government announced its first economic stimulus package. The September result, of course, is attributed by Westpac to relief on the part of consumers that the economy has avoided recession and that expected job losses have not materialised—although, as I think the Deputy Prime Minister said yesterday, we are still deeply concerned about the further loss of jobs in Australia because of the impact of that recession.

It is worthwhile also putting into context where consumer sentiment lies here relative to other economies around the world. Confidence in Australia has been above total OECD consumer confidence in each month since the announcement of the government’s stimulus strategy last October. Furthermore, according to the latest Nielsen Global Confidence Survey released in July, Australia’s consumer confidence is the fifth highest globally and higher than that of any of the other major advanced economies.

I said before that there is data out today which underpins the fact that Australia is weathering the global economic recession better than most other economies but also there is data which has come out, which represents a wake-up call to the Leader of the Opposition, the Liberal Party and the National Party about how difficult the road to recovery actually is. For any party to celebrate the early withdrawal of stimulus would quickly turn into a wake for Australia’s economic recovery. As we see in today’s retail data and housing finance data, we still have a long road ahead and the government stimulus strategy, through our infrastructure strategy, is a key element of making sure that we get there in the end.

I referred just now to the ABS retail data. I inform the House that in the month of July the value of retail trade fell by one per cent and in the same month housing finance also fell by 2.3 per cent. These are sobering facts for Australia, which indicate that we have a long, long way to go in terms of charting the course to economic recovery.

This data underpins the need for our nation building for recovery and our nation building for the future strategy—a strategy, which is, so far, working. But we have a long way to go. Our strategy is about supporting jobs, small business and apprenticeships today by investing in the infrastructure we need for tomorrow. As a result of the strategy, Australia is the only one of the 33 developed economies of the OECD to have registered positive economic growth over the last year, it is the fastest growing economy of the major advanced economies, it is the second lowest unemployment of the major advanced economies, it has the lowest debt and deficit of the major economies and it is the only one so far not to have gone into recession.

Government policy has had an impact here. Critically, the decisions by business and small business have also had a huge impact in registering a better performance in this economy relative to others which have been buffered by the global economic crisis.

Opposition Members:

Opposition members interjecting—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Those opposite constantly interject. I would ask them to reflect simply on what the growth numbers for the last 12 months have been for the major advanced economies. The Japanese economy contracted 6.4 per cent, the UK economy contracted 5.5 per cent, the US economy contracted 3.9 per cent, the Canadian economy contracted 3.2 per cent, France was down 2.6 per cent, Germany was down 5.9 per cent, Italy was down six per cent, the G7 average contracted 4.6 per cent, the OECD average across 33 economies contracted by 4.6 per cent and the Australian economy grew by 0.6 per cent.

Why is it so hard for those opposite to say anything positive about the performance of the Australian economy? The government’s economic strategy has been supported by the Treasury; it is supported by the Reserve Bank of Australia; it is supported by national peak industry bodies—for example, ACCI was referred to yesterday by the finance minister; it is supported by public economists across the country, it is supported by each of the G20 economies; it is supported by the IMF; and it is supported by the World Bank.

There was a further contribution to debate today, a further development, which was the appearance at the doors of the member for Fadden, otherwise known as the ‘brains trust’ of the Liberal Party. The brains trust of the Liberal Party was out there at the direction of the Leader of the Opposition to reveal new truths about Liberal Party policy on the economy. What did the brains trust of the Liberal Party have to say on the doors today? Here is what he had to say:

… every other government in the world except for Mr Rudd and Labor, is actually winding back stimulus.

I presume that was the instruction from the dispatch box, from the advisers and from the Leader of the Opposition—to say:

… every other government in the world except Mr Rudd and Labor, is actually winding back stimulus.

It is a pity that those opposite occasionally do not read the odd report which comes from offshore because there was a communique out a couple of days ago at the G20 finance ministers meeting in London, which had this to say on behalf of the 20 largest economies in the world:

We will continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies, consistent with price stability and long-term fiscal sustainability, until recovery is secured.

We have got the member for Fadden out there, representing the new orthodoxy on the part of those opposite, saying that, mysteriously, all these other governments around the world are reining their stimulus strategies in—except that the central bank governors and the finance ministers of the 20 largest economies of the world have said, in fact, ‘We have got to keep going because the recovery is not secure.’

I say this to the Leader of the Opposition before he dispatches the brains trust to the doors again, because we know how strongly he articulates the Liberal Party line handed to him on a sheet every morning. He will walk out there—a bit like walking up there to face the shrapnel each day—and deliver the line faithfully, except that he did not bother to actually read what was on it before he read it out. Here are a few basic things for those opposite to understand. Fact No. 1: the world is currently facing its most difficult recession in 75 years. Fact No. 2: the global economies, the G20, do not regard us collectively as being out of the woods yet, and the full consequences of this recession have not yet been reflected in the unemployment numbers. Fact No. 3: major economies around the world are not pulling the rug from under economic recovery by prematurely stopping their stimulus; they are in fact implementing their stimulus strategies. Fact No. 4, for the benefit of the member for Fadden, is that Elvis is not alive and well flipping burgers in Mississippi in a roadside diner run by the member for Fadden. The Leader of the Opposition lacks judgment; we all know that. The Leader of the Opposition now demonstrates himself to have lacked judgment on the economy. It is time they got with the national program.