David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer in this place, Senator Conroy. Can the minister update the Senate on global economic developments and the impact they are having on the Australian economy?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank my good friend Senator Feeney for that question. As I have pointed out many times in this chamber, we are facing the most serious global economic downturn since the Great Depression. To put this into some context, in the last three months of last year there was the sharpest downturn in the global economy in living memory. Twenty-one of the 25 OECD countries for which we have figures contracted in the December quarter of last year. Recent data shows that the US economy has shed more than 600,000 jobs a month in each of the last three months. Let us be clear about this: job losses of this magnitude are unprecedented in the 70-year history of the data series.

Last week’s national accounts showed that, like almost all other developed economies, our economy contracted in the December quarter. Our economy contracted by 0.5 per cent in the December quarter to be 0.3 per cent higher through the year. However, it is very important to note that this is a much milder contraction compared to most other countries. It demonstrates the point that the Rudd government has been making consistently: while we cannot completely resist the pull of global economic forces, we are still better placed than other nations.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Thanks to Peter Costello!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

We can see there are those who are still hankering for change. Oh dear, oh dear! (Time expired)

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister outline to the Senate how last October’s Economic Security Strategy helped support growth and jobs, given the global economic environment we all face?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

To compare what happened here to what happened in the rest of the world in the December quarter, just consider the following numbers. Japan contracted by a staggering 3.3 per cent, its largest contraction since 1974. The European and UK economies contracted by 1.5 per cent, their sharpest quarterly contraction since the early 1980s. The US economy contracted by 1.6 per cent, its worst performance since 1982.

The most recent national accounts figures show that our economy has performed better than each of the G7 economies. Of course, we have other strengths. We have one of the strongest financial systems in the world and it has weathered the global financial crisis. It is true that with our Economic Security Strategy in October (Time expired)

David Feeney (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister indicate to the Senate whether the government’s approach is consistent with the advice from international experts?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

The Rudd government recognises the enormous challenges the global recession presents for the Australian economy. It is important in this context that we know just how critical it is to act decisively to support jobs and growth. The considered view of the IMF and respected economists from all parts of the world is that governments must take decisive action—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Even Hanover!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You are just jealous. Governments must take decisive action to stimulate economic activity in the interests of jobs. Last weekend the IMF warned that, given the depth of the crisis, avoiding or postponing action is not a viable option. Further, the Chairman of the Federal Reserve, Ben Bernanke, warned that failing to act would be more costly in the end. He said:

We are better off moving aggressively today to solve our economic problems …

(Time expired)