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Wednesday, 26 November 2008
Page: 11516

Mr TURNBULL (Leader of the Opposition) (2:49 PM) —My question is addressed to the Prime Minister. I refer to the Prime Minister’s admission a moment ago that the government is preparing to go into what he describes as ‘a temporary deficit’. Given that the last time a federal Labor government went into a temporary deficit it lasted over six years, how many years will the Rudd government’s temporary deficit last?

Mr RUDD (Prime Minister) —My response to the honourable member’s question is that what I said was that current circumstances do not require any such course of action. I referred to the deterioration of the global economic environment and the fact that global leaders have a view of these circumstances which suggests that the situation is going to get worse rather than better.

I also note a statement from the honourable member’s old bank, Goldman Sachs, which says the government should:

… pick up the baton of stimulating economic growth in 2009. If conditions deteriorate the government should advocate the need for a deficit and build a catalyst for economic recovery. The combination of aggressive central bank easing and judicious fiscal stimulus will leave Australia better placed than its global peers in avoiding a deep and prolonged recession.

I suppose, though, if you have already made your motza out of Goldman then you do not have to listen to what they say anymore. The key thing is this. I said clearly in my statement to the House just before that the current circumstances which prevail in Australia do not require any such course of action. I have simply reported to the House the consensus emerging from global leaders both at the Washington G20 meeting and at the APEC leaders meeting that the global economic conditions are deteriorating further. I reported further that a large number of economies—in fact, all of those of the G7, bar Canada—have entered into deficit financing. I have indicated that for the future Australia must remain vigilant and, I say this again, take whatever action is necessary to support growth and jobs.