Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What are the main take-outs from the national accounts released last week? What do they say about the state of our economic recovery and the importance of responsible economic management?

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

I thank the member for Longman for his question. I was just wondering whether we could send out a search party for the shadow Treasurer, who seems to have disappeared. I would be delighted if he came in to listen to this very important question about the national accounts last week. I can say to the member for Longman and to all of those, certainly, on this side of the House that the Australian economy continued to outperform the rest of the advanced economies right around the world.

I know that is welcomed by many on this side of the House because we know that what it means around Australia is that there are businesses with their doors open that would have otherwise closed. This is a consequence of the measures that have been put in place and working with the Australian people to boost our economy during calendar year ‘09. What it means is that there are tens of thousands of tradies out there in small businesses working on projects that otherwise would not be in existence right now and they would be out of work as well.

Our economy grew by 0.9 per cent in the final quarter of 2009 and by 2.7 per cent over the year. That is an exceptional figure, considering what a devastating year it was in calendar year ‘09 in the global economy. It was the worst since the Great Depression and the second worst in modern global economic history. So it is an exceptional outcome. I think all Australians are proud of these numbers because this is something that we as a country did together: employers and workers came together, and businesses and their employees came together. Community groups all got behind a united effort not just to support jobs and business but to underline the importance of confidence. At the end of the day, that is what is so exceptional about Australia as we have come through this episode.

The strength of confidence in our community and our belief in ourselves is something that we should value and it is something that we need to work with as we move forward. This is why this country needs the sort of reform of our health system that we have been talking about today, the sort of reform of our skills base that we have been talking about today and the serious reform of infrastructure and so many other areas of our economy, so we can maximise the opportunities and the wealth creation capacity of this country as we move forward to take advantage of the Asian century.

In year average terms we grew by 1.4 per cent in 2009, and we ought to measure that against what occurred collectively in other advanced economies. They went backwards by 3.2 per cent—1.4 per cent in Australia and minus 3.2 per cent for other advanced economies. The fact that we grew for every quarter of 2009 is exceptional when all of the other countries that we compare ourselves to contracted. Of course, part of this message here is stimulus. Stimulus was supporting jobs and small business. Without that stimulus we would have contracted for three of the four quarters in 2009 by something like 0.7 per cent. That is the report card of calendar year ‘09 that we saw in the national accounts from last week.

There are just a couple of areas I want to draw attention to because they do point to opportunities and challenges as we move forward. The accounts point to the importance of infrastructure stimulus because it is certainly doing an exceptional job in areas of the economy that are soft. Our nation-building investments in our schools, roads, railways, ports and housing drove a 10.2 per cent increase in public investment in the quarter. This helped offset weakness in private building and construction activity, which fell by more than 20 per cent.

What that means is that in so many communities around this country without that essential investment, many of those tradies who are pulling up each morning outside those school construction sites would not be pulling up anywhere else because of the weakness of private sector activity. So you have a very vivid demonstration here of the importance of the pipeline of activity to confidence and activity as we move forward. As we know, it is the policy of those opposite to cancel those contracts. What they will be doing is fracturing that pipeline of activity which is so important to wealth creation, so important to small business and so important to the employment outcomes that we are getting. It is simply stunning that in the last little while something like 180,000 jobs have been created in this country. And we celebrate every single one of them. However, we are not complacent about that because, while unemployment is at 5.3 per cent, we know there are many people in the community who are working fewer hours than they would like to work. Of course, that means a cut to their income. So we should not be lulled into a sense of false security by that one figure because the number of hours that are reduced in our community is the equivalent of 260,000 full-time positions. That means there is still spare capacity out there in the labour market.

That investment—that infrastructure investment that this side supports and which is opposed by those opposite—is so important in securing those outcomes. Strong, sensible, well-judged economic policies are at the core of this outcome. And, of course, what we did not have when community groups got together and when employers came together with their employees, was the support of the opposition. I, for one, remember vividly the activities in this House last February when every one of them over there voted against the February stimulus package and then it was voted down in the Senate. In our hour of national need they went back to this negative, carping, oppositionist tone. If that had prevailed, they would have failed Australia. Fortunately for Australia, it did not prevail. The stimulus was put in place. The stimulus which they said would not create one job has created 180,000 jobs by the ABS figures. So it has been proved that they have comprehensively misjudged the Australian economy, just as we are seeing them comprehensively misjudging the very critical issue of paid paternity leave in this House. They are not able to fund it, they are not able to explain how they are going to fund it and they are not coming to grips with the fundamental incentive structures that are required to drive investment in this community, as well as having family friendly work practices and policies to support it. We have had today another demonstration of the monumental misjudgement of the Leader of the Opposition, his Shadow Treasurer and the shadow finance spokesman. They should be condemned for their irresponsibility.