Senator JACINTA COLLINS (2:33 PM) —My question is to the Assistant Treasurer, Senator Sherry. Minister, isn’t it the case that over the last year we have seen a wave of unprecedented economic turmoil stemming from the subprime crisis in the United States, the global credit crunch, the global financial crisis and the combined challenges these have presented to the international and Australian economies? Can the Assistant Treasurer advise the Senate of any new information announced overnight in relation to the global recession and Australia’s economic performance? What has the government done to protect Australians from the full impact of the global crisis, and how does the Australian economy compare to other developed economies?

Senator SHERRY (Assistant Treasurer) —Thanks to my colleague Senator Collins for that very important question. As we generally know, perhaps other than the Liberal-National Party opposite, the world is confronting a financial and economic crisis, the worst that has been seen in the 75 years since the Great Depression. This has spread into a deep worldwide recession. We saw overnight the release by the Organisation for Economic Cooperation and Development, an independent and respected leading international economic forecaster, of an updated report on the state of the global economy. Unfortunately, the report indicates that, of the OECD countries, the average negative decline in economic growth will be just 4.1 per cent, which is one of the worst records of negative growth the world has seen in a very long time. In contrast, it is estimated that the Australian economy will contract by 0.4 per cent. So, in contrast to the average of negative 4.1 per cent amongst OECD countries, Australia is 0.4 per cent. This is the best performance of any economy in the world.

Importantly, the OECD report also refers to government budgets having provided a ‘very important cushion for economic activity in the downturn’. So here we have another respected and independent international economic forecaster acknowledging the important initiatives and interventions of this Labor government to support and cushion the economy in the face of this world economic recession. (Time expired)

Senator JACINTA COLLINS —Mr President, I have a supplementary question for the minister. Assistant Treasurer, you have outlined new data announced last night about the forecasted performance of the global economy, but isn’t it the case that these numbers are a sobering reminder of the difficult challenges facing the global economy ahead? Do they confirm that Australia is outperforming all other advanced economies? Can the Assistant Treasurer point to any reasons why the Australian economy has performed so well, by contrast, in the circumstances, and is there any independent endorsement of the government’s actions?

Senator SHERRY (Assistant Treasurer) —As I have indicated, the OECD report says that the Australian economy is the best performing in the world in the current very difficult circumstances. As I have quoted, the decisive interventions by the Labor government—the budget $42 billion stimulus package, the bank guarantee and the range of other decisive interventions—have been acknowledged by the OECD as having a significant cushioning impact for Australia in the face of this world financial and economic crisis.

Senator Joyce —You don’t believe that!

Senator SHERRY —By way of interjection Senator Barnaby Joyce claims that he knows everything, and that, of course, he knows more than the OECD. If we look at the average negative of 4.1 per cent, the US is negative 2.8 per cent, Europe is negative 4.8 per cent—(Time expired)

Senator JACINTA COLLINS —Mr President, I have a further supplementary question for the minister. I note that the Assistant Treasurer has highlighted that the Rudd government has acted in the best interests of Australians by moving swiftly and decisively to secure Australian jobs and to protect the Australian economy. But can the Assistant Treasurer advise the Senate of any alternative policies to deal with the impact of the global recession on the Australian economy and how they compare to the Rudd government’s actions? Have these alternative policies been implemented by any other governments in the developed economic world and what have the effects of such policies been?

Senator SHERRY (Assistant Treasurer) —As I have indicated, the OECD report has provided strong support for the decisive policy actions of the Rudd Labor government. But it is not just the OECD; the International Monetary Fund has also endorsed the Labor government’s stimulus approach and the important role it has played in cushioning the Australian economy. I think it is important to note that both the OECD and the IMF have endorsed in general principle government stimulus packages. We have seen that around the world not just from labour governments from the centre left but also from right-of-centre governments. In fact there is only one political party in the world that does not support government intervention via stimulus packages, and that is the Liberal Party of Australia. There is only one political party in the world—they have no idea, they have no policies— (Time expired)