Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

It is certainly very difficult to please the opposition. We on the government side were criticised by Senator Abetz for making general contributions to this debate in this third reading stage, yet members of the opposition criticised the government for not contributing to the second reading stage. I am not quite sure how we can win on that one. But certainly I am very happy to make a contribution to this debate. We have been hearing some very contradictory remarks from the opposition, who, when it suits them, wilfully fail to accept that there is an international problem with our financial markets and growth in the world’s economies.

I think it is illuminating to hear what Richard Koo, the Chief Economist at Japan’s Nomura Research Institute, had to say on Radio National:

You never become a hero by pre-empting a crisis … and that’s what happened in Japan. Japanese GDP never fell during the last 18 years compared to the peak of the bubble. But that was because of all the pre-emptive fiscal spending … we saw our commercial real estate prices fall 87 per cent from the peak … but we managed to keep our GDP from falling … our unemployment rate never went above 5.5 per cent. All that suggests that Japan was doing the right thing … what the Japanese have proven is that, even with massive collapse in asset prices, as long as you have a pre-emptive fiscal stimulus to keep GDP from falling, then people have the income to pay down debt … Japan has proven that it can be done without first experiencing a massive depression or even a war, which was often the way many countries came out of these recessions in the past.

I think looking at the situation of Japan in the nineties, which did have a massive slowdown in growth—stagflation, it was called—is very helpful to us in this time. Of course this is a massive stimulus by the Rudd government, and the opposition questions whether it is needed. I think it is clear that it is needed, and the Japanese example provides us with exactly that illustration.

The government, and particularly the Prime Minister, have been referring to the need to protect jobs, so I will emphasise again that, as Richard Koo suggests, because of the economic and fiscal stimulus that was undertaken in Japan, the unemployment rate never went above 5.5 per cent. Protecting jobs is one of the key aims of this stimulus package, and one which the opposition also claim to support, but here we have the opposition refusing to agree to this stimulus package without explaining how we should support our economy through these extremely difficult global economic times. We have the example of the way these stimulus packages work in what has happened in Japan over the last 18 years. But the opposition refuse to accept that because it is not convenient for their argument. They continue to talk along the lines of: ‘Why do we need it?’ Why do we need to go into this debt?’ They talk about whether the debt is too large.