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Wednesday, 4 February 2009
Page: 248

Ms NEAL (3:07 PM) —My question is to the Minister for Trade. How will Australia’s trade policy enhance the economic impact of the government’s Nation Building and Jobs Plan?

Mr CREAN (Minister for Trade) —I thank the honourable member for her question and make the point that the global financial crisis is having a huge impact on trade flows around the world and, despite the fact that Australia posted a strong trade surplus yesterday, we will not be immune. The reason for that is that six out of our top 10 trading partners are already in recession. The IMF is forecasting that trade flows will decline this year by 2.8 per cent, and we are seeing very worrying trends in terms of reversion to protectionist policies, most evidenced by the dairy decision in the EC and the ‘buy America’ campaign emanating from the US congress—both measures which we have strongly opposed.

Because we are not immune, we as a government have to act decisively here as well as in international fora in arguing and taking action for a positive and constructive path forward. That is why yesterday’s $42 billion jobs and nation-building package is an essential part of our response not just for what matters here in this country but also in terms of a global call for those countries that are in a position to spend and inject a fiscal stimulus to do so. The IMF has called for countries that are in that position to spend at least two per cent of their GDP. Yesterday we also saw the Reserve Bank responding not just to the circumstances here but also to the urgings of banking authorities for the central banks to ease interest rate pressures.

Our endeavours in international fora to free up trade are so important to this coordinated approach. The reason for that is simple. It is because trade itself is a stimulus. That is because historically world trade has grown faster than world output. Each time that there has been a successful conclusion to a trade round, that multiplier has increased. So the point that we make is this: what is the point in a coordinated approach to fiscal stimulus unless you are prepared to work on the multiplier as well? That is why we have been advocating the conclusion of the Doha Round not only in the forums of the WTO but also through the G20.

This is a government that has responded and acted in terms of a coordinated action. But who is standing against that action in this country? Those who sit opposite, because they would oppose the stimulus message and the stimulus calls from the international organisations to which Australia has responded. The opposition’s action is irresponsible. It not only flies in the face of what has been called for globally but also condemns Australian working families to the worst excesses of what will happen out of this global recession.