Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 29 October 2009
Page: 7641


Senator PRATT (3:17 PM) —It seems to me that senators opposite actually wish that we were in recession—that Australia was facing recession right now—because, without the fiscal stimulus, Australia would be in recession right now and hundreds and thousands more Australians would be out of work. For interest rates to be where those opposite would like them to be could only mean one thing: recession. The RBA has flagged more interest rate rises to come, but we should not forget that those interest rates are four percentage points below their peak last year and are still providing a substantial boost to household budgets. It is a good thing that the Australian economy is out-performing other advanced economies. Many economists will see the interest rate rises as the inevitable consequences of our recovery. At the Senate inquiry into the stimulus package, the Reserve Bank Governor, Treasury business economists and business groups all said that our stimulus was the right course of action and that it has helped keep Australia out of recession.

Why is this so important? You talk about interest rate rises and the pressure that that puts on people, but what I want to talk to you about is unemployment. When we are in recession, it means greater levels of unemployment. We have already seen a huge spike in unemployment here in Australia, and it has risen very rapidly in Western Australia. Unemployment in WA stood at 2.7 per cent last year. It has risen every month, including last month. That means that there are more than 70,000 unemployed in WA—which is more than double what it was a year ago. That figure would be much, much higher without the stimulus. So I ask you about the pressure of paying a mortgage and how you pay your mortgage if you are out of work—because that is what the stimulus debate is really about. Unemployment can scar the lives of individuals permanently. They lose skills, they lose the opportunity to gain experience, they lose confidence and they lose hope. We have young people in Australia who are suffering severe unemployment at the moment, and that impact on them is severely pronounced. It has a profound impact on people’s working lives—and that has been the major reason that the Rudd government has supported the stimulus package. That is what senators opposite fail to appreciate.

Every Australian knows that interest rates went up 10 times under the Liberals, despite their promise to keep them at record lows. You ignored 20 warnings from the RBA on the need to invest in critical infrastructure and skills—critical infrastructure and skills that Australia now so desperately needs in order to build up its economy. Under your management, inflation rose to a 16-year high and interest rates went up 10 times. We need a dose of reality in this interest rate debate. You talk about not wanting to invest in stimulus and I talk about the need for a stimulus to avoid recession.

Senator Williams compared us and our interest rates to overseas countries that are all in recession. Australia’s response to the global financial crisis has been declared the global success story. It is the kind of approach that other countries are now wishing they had taken. Last week we saw a great example of how foolish the scare campaign of those senators opposite is. The opposition claimed that there was evidence that a Labor government meant high interest rates. But where are interest rates now? They are 350 basis points lower than their peak under the Liberals—lower, not higher. (Time expired)