Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Hansard source

In the most recent IMF report we have revisions down by one per cent in global growth and revisions down by one per cent in the growth of the most advanced economies. There are also revisions down in Chinese growth, which uniquely the Leader of the Opposition seems to think irrelevant to growth prospects in this economy—a remarkable conclusion. On top of that you should have a close look at what has happened most recently in business and consumer confidence indicators around the world and in Australia. The growth data for Australia is that which was outlined in my answer to the honourable gentleman’s first question—the budget projection for 2008-09 of 2.75, the RBA’s most recent statement of 2.25 and the figure of 2.2 in the IMF’s report. This is the data which is before the government.

What the opposition leader suggests is that what is going on in the global economy in the period ahead is irrelevant to how those growth numbers will be affected in the future. And I say this to the Leader of the Liberal Party: these numbers for the global economy predate the convulsions in global stock markets and capital markets of the last two weeks. Therefore, the logic which flows from this is transparently obvious: if you have a revision down in growth globally of one percentage point, and that is prior to the convulsions in stock markets and capital markets in the last couple of weeks, it is a wise course of action to create a buffer against Australia’s future growth prospects. One per cent of Australian GDP is $10 billion. Therefore if you are seeking to construct a buffer for the future it is within that ballpark that you should be aiming in order to ensure that you are providing a proper buffer for growth in the future.

But let us look carefully at the economic strategy which the Leader of the Opposition is advocating. He is advocating that this government should wait until MYEFO and wait until the new national accounts data emerges to demonstrate what the actual growth numbers for the future will be. I say to those opposite: the response to the global financial crisis is along these lines. You either act early and decisively before there is a problem—

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