Economy: 19 Mar 2009: Senate debates (OpenAustralia.org)

Senate debates

Thursday, 19 March 2009

Questions without Notice

Economy

2:09 pm

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

My question is to the Minister representing the Treasurer, Senator Conroy. Is the minister aware that the major advanced economies are in recession, including the United States, the United Kingdom, Japan and the European economies; that growth in the key emerging economies of China and India has now slowed dramatically; and that, as a result of these rapidly moving global developments, we have seen global forecasts revised down on almost a weekly basis? Can the minister update the Senate on how the Rudd government is taking action to support jobs and growth in the current economic climate?

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. We are facing the worst economic crisis since the Great Depression. It is worth focusing on just one fact that emerged from the blizzard of statistics at last week’s G20 finance ministers meeting in London, and that is that the advanced economies collectively contracted by seven per cent, annualised, in the December quarter. This just underscores the difficulties of the global environment we now face. The World Bank overnight cut its growth forecasts for China by one percentage point, to 6.5 per cent. This is a halving in China’s growth from its peak two years ago.

The Rudd government has taken decisive action to promote economic stability in Australia, to cushion us against the worst impacts and to protect Australian jobs. In October last year the government moved quickly and decisively to ensure confidence in the banking system through the guarantee of bank deposits. We also took decisive action to stimulate the economy and support jobs with our $10.4 billion Economic Security Strategy and our $42 billion Nation Building and Jobs Plan to support jobs and deliver important investments to strengthen the economy for the future. As I outlined yesterday, we have also taken action to promote economic stability and protect Australian jobs by proposing to establish the Australian Business Investment Partnership, or ABIP.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

It’s a slush fund.

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

ABIP is an important part of the government’s measures to cushion Australia against the effects of the global economic crisis. I will accept that interjection from Senator Coonan, once again displaying a complete ignorance of any economic circumstances—(Time expired)

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

Mr President, I ask a supplementary question. Is the minister aware that pressures on international finances are unprecedented, particularly in the context where we have seen many banks in Europe and the US collapse or be bailed out by their governments, and that the global financial crisis clearly raises the possibility that some financiers, particularly foreign banks, may reduce their level of funding to projects in Australia? Can the minister explain how ABIP will address this problem?

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

Unlike those opposite, the Rudd government is not willing to stand by and do nothing while commercial property prices tumble and jobs are wiped out by developments in global financial markets. The opposition say, as evidenced by Senator Coonan’s question in this place yesterday, that no commercial property projects or jobs are at risk. That is the contention from those opposite. However, foreign banks have been unable to give the Treasury a commitment that they will maintain their current exposures to the Australian economy in general, including commercial property, and there have been reports from the Property Council and others that up to 24 foreign banks may be reducing their lending to the commercial property sector. ABIP is a contingency measure being put in place with a number of safeguards. (Time expired)

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

Mr President, I have a second supplementary question for the minister. Given that the government is putting ABIP in place to support the commercial property sector in the event of the withdrawal of finance by foreign banks—not necessarily because of the viability of these projects in Australia but because of pressures within their own countries—can the minister please explain why it is so critical now that the government supports the commercial property sector?

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

As I said yesterday, the Australian commercial property sector employs about 150,000 people whose jobs will be under threat if the sector is forced to abandon projects due to the loss of finance. So 150,000 Australian workers and their families, honest hardworking Australians—plumbers, builders carpenters and electricians—will lose their income and their livelihoods should the commercial property sector go to the wall, as those opposite seem quite happy to see happen. Those opposite and their leader are short-term political opportunists. It seems that the Leader of the Opposition’s favourite policies to oppose are those that make an effort to support the jobs of Australians. I ask once again, Mr President—

John Hogg (President) Share this | Link to this | Hansard source