House debates

Tuesday, 27 September 2022

Questions without Notice

Economy

2:04 pm

Photo of Sam LimSam Lim (Tangney, Australian Labor Party) Share this | | Hansard source

My question is to the Treasurer. What is the outlook for the global economy, and what impact does this have on Australia's economy and on our budget?

Photo of Jim ChalmersJim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | | Hansard source

I thank the member for Tangney not just for the question but, really, for the quite remarkable spirit that he brings to this place. I know that I speak for everyone on this side when I say what an honour it is to serve with the member for Tangney. I appreciate his question today.

In between the parliament rising at the end of this week and it returning at the end of October, I'll be heading to Washington, DC for a short trip to confer with my international counterparts about the difficult and dark days that lie ahead for the global economy. Last night the OECD showed in pretty stark detail the downturn that they are anticipating in the world economy, with substantial downgrades to the growth outlook for almost all of the world's major economies and almost all of our major trading partners as well.

For the benefit of the House: the OECD has wiped 0.6 percentage points off the global growth projection for 2023, predicting no growth at all for the UK next year, negligible growth in the United States and slower growth in China than previously expected. Now, the factors contributing to this aren't a secret to anyone: intensifying inflationary pressures, escalating energy security shocks, Russia's illegal war becoming more entrenched and extreme uncertainty over the future. Here in Australia we do have things going for us that will help us with withstand the worst of what we're confronting in the global economy, but these global challenges are deepening, not disappearing, and there's no use pretending that they won't be felt here in some form. The OECD has touched on that, too.

There's no avoiding the reality that the economy we inherited isn't as resilient as it could be to help us through these shocks, nor is the budget as well placed as it needs to be either. These are the costs and consequences of that wasted decade that Australians are paying the price for now, with falling real wages, flatlining productivity and a budget heaving with $1 trillion of debt without an economic dividend to show for it.

This combination of challenges is the backdrop for the budget that we will hand down from this place at the end of next month. We will provide cost-of-living relief in the budget, which is responsible, which isn't counterproductive, in areas like cheaper childcare, which those opposite have still not told us whether or not they will support. We need to start investing in the potential of our people and the capacity of our economy: fee-free TAFE, cheaper and cleaner energy and a future made in Australia. We will begin trimming some of the waste that was a hallmark of the budgets handed down by the previous government.

This is just the beginning, not the end of our work to build the better future that Australians deserve. It will take multiple budgets and it will involve some hard choices, but, despite everything that's been thrown at us, Australians have every reason to be optimistic about the long-term prospects of our economy and our country. We've got some tricky terrain to navigate together in the meantime.