Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the views of respected economists and business groups on the government’s fiscal settings?

Honourable Members:

Honourable members interjecting—

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

Order! I will just say to all members that to continue discussion about the events that have happened in an earlier answer and question are just not helpful to the proper conduct of the House. I remind those that need reminding that I will use 94A without warning.

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

I thank the member for Dobell for his question. It is a very important question because it is very clear and it is very consistent that respected economists and business groups believe that the government stimulus has kept the Australian economy growing in the face of the worst global recession in 75 years. And while virtually every advanced economy suffered a deep recession, our stimulus has ensured that that did not happen in this country. As a consequence Australia has had the strongest growth of 33 advanced economies—the only one to have grown through the year to June.

Because we acted quickly and we got in early we have been able to limit the worst effects of this global recession on Australian businesses, families and, of course, the economy. This is a view which is shared by economists and representatives of business. This is what the director of the Australian Chamber of Commerce and Industry had to say to the Senate inquiry last month. He said:

The Australian government was right to take this path and in fact to act more quickly and decisively than most … the scope and scale of stimulus was entirely warranted.

And that has been backed very strongly by business economists like Rory Robertson. At that same Senate inquiry he said:

In terms of the formulation, there may not have been a more sensible package.

He said that Australian policymakers, like most of their counterparts across the world, moved macroeconomic policy ‘sharply in the right direction’.

Had it not been for our economic stimulus, and particularly our investment in infrastructure, the Australian economy would have been in recession. The fiscal stimulus was designed to have its maximum impact in the middle of this year, in June, and then to be gradually withdrawn from that time on. The stimulus, therefore, has already peaked and is gradually tapering away.

It is this in-built withdrawal which the Governor of the Reserve Bank referred to last month when he made this comment, which I think is pretty relevant to all of those opposite. He said:

Such an outcome would mean that fiscal and monetary policy would be acting broadly consistently, as they did when they were moved in the expansionary direction when the economy was slowing.

That statement was made only on 28 September. So I think it is the case that economists and business groups all agree that the stimulus is important. They also agree that its job is not finished, because withdrawing stimulus overnight would be simply devastating to tens of thousands of small businesses in this country and to tens of thousands of their employees.

That is why Dr Peter Burn of the Australian Industry Group had this to say on 28 September:

We are very wary of calls for the fiscal measures to be wound back ahead of the in-built schedule for their withdrawal. We think that this could undermine the recovery that appears to be taking hold.

That is a complete repudiation of the position of opposition members in this House. We know that opposition members in this House have been voting against the economic stimulus in the House and then going out into their own electorates and supporting it there and trying to claim credit for it.

I guess we are pretty used to that hypocrisy, but today I think I can reveal another chapter in that hypocrisy because on 12 March the shadow minister for families said in this chamber about the government’s response to the global financial crisis, ‘We are against the government’s stimulus package.’ Again on 5 February he said, ‘What this government is doing is too much and too soon.’ I can report to the House that the shadow minister for families went down to Canberra Grammar on Tuesday to address students and give them his views about life. This is a shadow minister in the opposition—the shadow minister for families. He went down there and do you know what he said? He said that the Rudd government ‘handled the global financial crisis well.’ So one thing in this House and entirely another outside of the House. He was pretty quick to tell all the assembled students that he would not be able to make that comment outside the classroom because the media might get onto it. We can understand his embarrassment because we can understand the embarrassment of all of those opposite. The hypocrisy of all those opposite is now clear for everybody to see.