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Monday, 15 June 2009
Page: 5885


Mr CHEESEMAN (2:24 PM) —My question is to the Prime Minister. Will the Prime Minister update the House on the government’s nation building for recovery program to drive Australia out of the worst global recession in 75 years?


Mr RUDD (Prime Minister) —I thank the honourable member for this question. The government has embarked on a course of action based on early and decisive action to support jobs and to cushion our economy from the worst impacts of the global recession.

I refer the attention of the House to what we had produced in the last week in terms of the most recent consumer sentiment index, which was up 12 per cent in June. This is the largest increase in 22 years. Consumer sentiment is now up 20 per cent since the announcement of the government’s first economic stimulus package in October and, furthermore, the consumer sentiment index is now at its highest level since January 2008. That covers consumer sentiment, but then, of course, we have business confidence, which has also risen. Business confidence for May showed the sharpest rise that we have seen since 1989. It has now reached its highest level since February 2008. Furthermore, we saw other positive economic data in the housing sector, with housing finance growing by 3.5 per cent in April. First home buyers in particular represent an increased proportion of that total amount, indicating that people are responding positively to the trebling of the first home owners boost.

I was asked by the honourable member about the economic recovery—that is, our efforts to support an economic recovery in Australia and to lift Australia from the global economic recession. The data suggests that as of now—while there are still many difficulties lying ahead—Australia is performing better than most other countries during this global recession, the worst in three-quarters of a century. Firstly, on the matter of economic growth, if you look at the data itself, Australia has the fastest growth in the OECD. In the March quarter we saw the following growth in some other economies: Japan, negative 3.8 per cent; the UK, negative 1.9 per cent; the US, negative 1.5 per cent; Canada, negative 1.4 per cent; France, negative 1.2 per cent; Germany, negative 3.8 per cent; Italy, negative 2.6 per cent; and Australia grew in the March quarter by 0.4 per cent. Against those measures the Australian economy is performing relatively well.

On unemployment, Australia on the most recent data has the second lowest unemployment of the major advanced economies: in the UK it is 7.1 per cent; the US, 9.4 per cent; Canada, 8.4 per cent; France, 9.1 per cent; Germany, 8.2 per cent; Italy, 6.9 per cent; in Australia it is 5.7 per cent—still too high—and in Japan it is 5 per cent.

On debt, Australia has the lowest net debt of the major advanced economies. To again go through the numbers: Japan, 103 per cent of GDP; the UK, 56.8 per cent; the US, 61.7 per cent; Canada, 26.2 per cent; France, 65.2 per cent; Germany, 70.9 per cent; Italy, 111.9 per cent; and the major economies have an average of 70.4 per cent of GDP. Australia’s debt is currently forecast to be 4.6 per cent in 2009-10 rising to 13.8 per cent.

On the matters of deficits, Australia has a lower budget deficit than the average of the major advanced economies in 2009. The figures are: Japan, minus 9.9 per cent; the UK, 9.8 per cent; the US, 13.6 per cent; France, 6.2 per cent; Germany, 4.7 per cent; Italy, 5.5 per cent; and their average is 10.4 per cent. Canada is at minus 3.4 per cent and Australia is at minus 4.9 per cent.


Mr Pyne —When are you going to sit down?


Mr RUDD —The member for Sturt is obviously not keen on hearing this data. But it is important that the House reflect on the fact that every one of the major advanced economies has fallen into recession and Australia has not. I say to those opposite that, therefore, when it comes to economic growth, Australia is the fastest among the major advanced economies and with unemployment we have the second lowest of the major advanced economies. On top of that our net debt is the lowest of the major advanced economies and our deficit is the lowest of the average of the major advanced economies. These are the data which represent the impact not just of government policy action but also of the decisive contribution by individuals in the Australian economy as well—the men and women of business and small business in particular.

We have some 35,000 construction projects currently underway across the country. These are important projects for the nation. I notice in this respect that there is a debate within the Australian community about the future of the nation’s construction sector. The building and construction sector is critical for the economy. While this sector is full of hardworking and law-abiding people helping Australia to build towards recovery, there are also plainly problems. There has been a history of violence and threats of violence in parts of this sector and these cannot be ignored and nor will they be ignored. There is a determination within the Australian government to get this right. We will honour our election commitments and have indeed a tough cop on the beat. We will honour this commitment in a fair and responsible way for the sector, for the economy and also, most importantly, to support economic recovery.

We are not out of the woods yet. There is much work to be done. The government’s strategy is to lift the economy up through nation building for recovery. I would again contrast that with the strategy embraced by those opposite, which is to continue to talk the economy down.