Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the outcomes of the G20 finance ministers meeting held over the weekend in London?

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

I thank the member for Solomon for his question because last weekend in London I met with G20 finance ministers to discuss the full implementation of all of our commitments that were agreed to at the April summit. I think it is pretty clear that there has been a fair bit accomplished by the G20 over the past six to 12 months. One of the most significant accomplishments of the G20 over that period of time has been to put in place coordinated economic stimulus which has averted an economic catastrophe and it is the case that if it had not been for that coordinated stimulus the world economy would have been in a far worse condition than it is now. It is the case that finance ministers believe that we are not out of the woods yet and, until there are signs of a sustained return of private demand, stimulus must be implemented. So Australia has a lot at stake in this process because we are outperforming the rest of the world, something that seems irrelevant to those sitting opposite. But we are not immune to what is going on elsewhere in the world. There is a lot of hard work to be done to ensure that we can cushion our economy from the impact of this global recession.

It is pretty true to say that every finance minister in the G20 understands just how fragile the global economy is, something not understood by those opposite. This is the view of those internationally. Let us just look at the view of the IMF. Director Strauss-Kahn said:

While global growth appears to have turned a corner, we should not forget that so far, this has been mainly due to massive policy support …                …            …            …

Unwinding the stimulus too soon runs a real risk of derailing the recovery, with potentially significant implications for growth and unemployment.

Let us go to what Tim Geithner, the US Treasury Secretary, had to say:

The classic errors of economic policy during crises are that governments tend to act too late with insufficient force and then put the brakes on too early.

We on this side of the House are determined not to make those mistakes. The UK Prime Minister said:

To decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgment be a serious mistake.

Those are the views of three of the people sitting at the table over the weekend, and I would make the point that sitting at that table on the weekend were representatives and finance ministers from all sides and all ends of the political spectrum. There were conservatives sitting there; there were centre left governments sitting there. So how is it that everyone across the spectrum, across the globe, through the G20, agrees that stimulus must be maintained but that the only people in parliaments around the world who disagree are the Liberal Party of Australia? They are so out of touch. But it is worse than that. They simply do not understand the nature of the global challenge, and if they do not understand the nature of the global challenge they cannot be part of the solution. We had the farce on the door this morning of the member for Fadden. This is what the member for Fadden had to say:

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

He said that in spite of what had been decided at the G20 over the weekend. He said it despite all of the evidence of what stimulus has done in this economy to protect small business and to protect our people. If they had their way, this economy would be in recession right now and instead of a positive figure of 0.6 per cent for the year it would have been minus 1.3 per cent, hundreds of thousands of people out of work and businesses closing their doors.

It is not just the governments of the world but also the business community. Those opposite are supposed to be the party of business, but on 8 September Peter Anderson, Chief Executive Officer of the Australian Chamber of Commerce and Industry, ACCI, said:

… the balance of risk supports the maintenance of most of the current fiscal and monetary policy stimulus.

…            …            …

The underlying conditions facing Australian business remain weak …

…            …            …

An in-built scaling down of economic support is preferable to sudden withdrawal.

That is the government’s policy. They are supporting the government’s policy. The only ones who are one out here are the Liberal and National parties in this parliament. Why is that the case? Because they will always put their politics ahead of the national interest. They will always put their self-interest before the jobs of Australians because they are not capable of coming on board for a set of proposals which protect our national economic interests. That is what has become apparent since the meeting of G20 finance ministers on the weekend. They are out of touch, they are out of their depth and they do not understand the nature of the challenge facing this country.

We on this side of the House will pursue the national economic interest. We will continue to support employment and business in the Australian economy. We understand the nature of the challenge. Business investment is weak. There has been a very substantial cut to our national income. Many businesses and employees are doing it tough and, while that is the case, we will continue to support them because that is in the national interest. The Liberal Party are operating in their own political self-interest, hoping that unemployment goes up, hoping that a withdrawal of stimulus will produce dramatic effects in the economy which will support their political objectives. We will move forward in the national interests and they should be condemned for their overtly political approach.