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Monday, 8 February 2010
Page: 600


Ms SAFFIN (2:05 PM) —My question is to the Prime Minister. Will the Prime Minister please update the House on recent information relating to the impact of the stimulus provided by the Nation Building and Jobs Plan on the Australian economy and Australian jobs?


Mr RUDD (Prime Minister) —I thank the member for Page for her question. The government are committed to building a stronger Australian economy and one that protects jobs and delivers for working families. That is why, in the face of the greatest global economic challenge since the Great Depression, we implemented a national infrastructure stimulus strategy, which is right now supporting more than 34,000 projects around the country. The result is that Australia (1) has been kept free of recession and (2) is the only one of the advanced economies that generated positive economic growth in the period 2008-09.

I draw the House’s attention to what the Reserve Bank had to say in their Statement on monetary policy last Friday. It contains new numbers on strengthening employment and on the issue of a strengthened economy. Firstly, on the growth point, it informs us that growth numbers have been revised up by the bank to two per cent for 2009-10 and 3.5 per cent for 2010-11. This is good news for the Australian economy.

The government’s overriding objective is how we protect jobs in the face of this global economic recession. On employment, the RBA states that it now looks likely that the unemployment rate has peaked at around 5.75 per cent. If that number is realised, it is very good news indeed for Australian working families. The core objective of the government’s economic plan is to protect Australian jobs, and that is why we have 34,000 projects out there, underway through the national economic infrastructure stimulus plan.

Let us look more broadly at the impact of what we have done in Australia on jobs here, relative to other countries, to put it into context. Since the global recession began, the United States has lost 6.8 million jobs; the UK, 496,000; Germany, 136,000; Canada, 270,000; Japan, almost one million; France, 447,000; and Italy has lost 406,000 jobs. By contrast, Australia has gained 112,000 jobs over the last 12 months. The other thing I would say is this: contrast the performance on jobs with what has happened in previous international recessions. Here I think it is important as well to look historically at how governments have responded to this challenge. In the international recession of the early eighties, the unemployment rate in Australia peaked at 10.4 per cent. That was with global growth still positive at nearly one per cent. Then, in the international recession of the early nineties, we had the unemployment rate peaking at 10.9 per cent despite global growth still being positive at 1.5 per cent. In this current global recession, where we have the economy actually contracting, Australia has generated an unemployment rate of 5.8 per cent. What this demonstrates is that the policies of this government affecting jobs have been better than what we have seen in most other economies around the world and better than what we have done in response to previous recessions as well.

The other thing I would say in conclusion about the Reserve Bank’s statement last Friday is this: it pointed particularly to the impact of infrastructure stimulus as ‘an important offset’ to the weaknesses in several areas of the economy—a very important and significant finding. Furthermore, it said that the overall stimulus is currently being withdrawn, while noting that the pick-up in demand around the global economy is still patchy. And we note the IMF’s warning from last week which says that there should be no premature withdrawal of stimulus because the global economy is still in fact in a difficult situation.

To conclude, can I just say this: there is no clearer contrast between the government and the Liberal and National parties on the question of the economic management of the global recession and recovery. Those opposite—led by the Leader of the Opposition, who says he has no interest in economics and who made the extraordinary decision to appoint Senator Joyce as the alternative finance minister of Australia; leave that to one side—on the core of policy said this: they said we should never have had a national infrastructure stimulus strategy. Had we followed that advice, we would now be in recession and 200,000 Australian jobs would be lost. But the second point is this: on the question of judgment, the Leader of the Opposition, not learning from that mistake, now says, for the future, we should pull out another $20 billion worth of investment in national economic stimulus expenditure. That would also send us down the gurgler.

On the question of economic management, the government’s approach is clear-cut. We have responded to the global recession in a cogent way. What we have seen from the Leader of the Opposition is poor judgment last year in saying we should not have a stimulus strategy, and poor judgement again in saying that we should pull the rug out from under the recovery for the stimulus strategy which lies ahead.