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Wednesday, 2 June 2010
Page: 4971

Mr HALE (2:14 PM) —Thank you, Mr Speaker, and I feel most fortunate to be given the call.

The SPEAKER —You are very fortunate.

Mr HALE —My question is to the Prime Minister. What do the national accounts figures show about the Australian economy?

Mr RUDD (Prime Minister) —I thank the member for Solomon for his question because the strength of the Australian economy also rests on the strength of the region’s of Australia, including the Northern Territory, which the honourable member so effectively represents in this chamber together with the member for Lingiari and senators as well. I believe there is nothing more fundamental to the responsibilities of a government than to keep the economy strong, because, if you have a strong economy, you can then deliver on the aspirations for working families. You can also then build a fairer Australia and put in place the measures you need to secure Australia’s future.

Today we had revealed and released the national accounts. They point to a strong performance for the Australian economy. Australia’s GDP has grown by a solid 0.5 per cent in the March quarter. The Australian economy continues to be the envy of the developed world. Notwithstanding our strong national economic performance, we should also be mindful of the fact that many families in the Australian community and many Australian small businesses are still finding it very tough, given the nature of the global economic forces still at work on Australia.

The Australian economy, as I said before, continues to be the envy of the developed world. Australia’s growth over the past year has been 2.7 per cent. This compares to 0.4 per cent for New Zealand, minus 0.2 per cent for the United Kingdom, 2.5 per cent for the United States and 0.5 per cent in the Euro area. This becomes an even more stark comparison if we compare Australia’s economic growth performance since the crisis began some two years ago. These figures are worth reflecting on. Australia’s economy since this crisis began has grown by 3.5 percentage points. In the United Kingdom, GDP has fallen by 5.5 percentage points. In Germany, it has fallen by 5.3 percentage points. In the United States, it has fallen by 0.9 percentage points.

But the model for the Leader of the Opposition—remember—is New Zealand. I would ask him to reflect on the fact that in New Zealand they have had something like five consecutive quarters of negative economic growth. That is his recommended economic model, from the man who says that economics bores him, from the man who the previous Treasurer Peter Costello said he could never make Treasurer and whose colleagues have now said, in various publications around the country, would not understand the meaning of the concept of being a fiscal conservative. His model is New Zealand and I would suggest he reflects on New Zealand’s performance.

On the question of the strength of Australia’s performance, I would also draw to the attention of those opposite that this government will be bringing the budget back to surplus in three years time, three years ahead of time, and we will be halving net peak debt. That is this government’s record of achievement. Had we gone the other way and taken the recommendation of the Leader of the Opposition and not had any stimulus, you would have had Australia in recession, you would have had taxation receipts collapsing completely and you would have had very large outlays for unemployment benefits. Had Australia performed like so many of the other economies around the world which generated double-digit unemployment we would have had something like half a million more Australians out of work. That was the script being put on offer by those opposite—tens of thousands of businesses closing their doors and our budget under greater pressure.

The core difference that we made relative to other economies was the size and construction of our economic stimulus strategy. That is what has made the difference in this Australian economy.

Mr Hockey interjecting

Mr RUDD —The member for North Sydney continues to loudly interject. I would ask him to examine the national accounts figures today in terms of the contribution of public final demand to the overall growth performance of the Australian economy and ask him then to reflect upon the wisdom of his interjection that stimulus had nothing to do with it.

Can I say to those opposite and to the House more broadly that stimulus has helped pick up the slack in critical areas of the economy. For example, in the building industry, private activity contracted by 0.6 per cent in the March quarter and is now over 15 per cent below the level it was a year ago. That is why programs such as Building the Education Revolution, the school modernisation program, have been of fundamental importance, together with the social housing program, in providing work for tradies, sparkies, chippies and builders right across the Australian economy. If any of those members opposite were being honest about this and looking in the faces of the builders and the subcontractors in their electorates, including the Leader of the Opposition’s electorate, they should have the courage to front them and say that they would pull the plug from under each and every one of those projects.

This has therefore been a core element in Australia’s strong economic performance. The stimulus measures that we have embarked upon are already in the process of being withdrawn. The first homeowners boost has been reduced, the tax breaks to small business have come to a conclusion, and there is the guarantee scheme for large deposits and wholesale funding and the state guarantee scheme. Over time the withdrawal of fiscal stimulus is anticipated to subtract around one percentage point from GDP growth over 2010.

Here is the core point: those opposite are calling for the cancellation of stimulus now. That is their position. Reflect on that as it would occur and roll out across the ground. The cancellation of stimulus would result in the cancellation of 175 road and rail safety projects right across Australia. It would result in construction being stopped midway on 7,000 major school buildings. It would result in the construction being stopped midway of more than 533 science and language centres across Australia. It would leave 12,500 new social dwellings unfit for occupation, without plumbing or even walls. It would lead to the cessation of the construction of 380 defence homes across Australia, something I would have thought the member for Herbert might take a particular interest in. Further, 130 projects across our universities would be stopped and work also brought to a halt on 125 community infrastructure projects, all backed by Australian local government. That is the practical consequence of what the Leader of the Opposition says would happen if he cancels—as he says he would—stimulus projects across the country. The question for each member opposite is to front their local P&Cs and their local P&Fs and tell them which of those schools is not going to be brought to conclusion.

This government is proud of its achievements in terms of the management of the economy in the worst global economic downturn that the world has faced since the Great Depression. We are proud of the fact that the Australian economy has emerged as the only major economy which has not gone into recession. It is one of only two economies of the 30-plus economies across the OECD not to have gone into recession. This should be cause for confidence on the part of Australians, but it should not be cause for complacency on the part of Australians. That is why we are engaged in long-term economic reform as well—building productivity growth, investing in infrastructure, investing in skills and implementing microeconomic reform. That also includes taxation reform, and that is what we are doing with the resource super profits tax in order to provide long-term reform and a basis for growth for this country into the future.

This side of the House welcomes positive news on the Australian economy. We welcome positive growth numbers for the Australian economy. Is it so far beyond the capabilities of the Leader of the Opposition to stand up today and welcome the fact that this has been the strongest-growing economy of all the advanced economies in the world?