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

I thank the honourable member for Bonner for her question. It goes to the national accounts and it goes to important data for the future direction of the national economy. As the Treasurer outlined in his answer to the House before, the Australian economy grew by 0.1 per cent in the September quarter and 1.9 per cent through the year. It is important in the midst of a global financial crisis to place this performance in context. That is, if we look at that figure of 1.9 per cent growth across the year, it demonstrates that the Australian economy grew more rapidly than any of the G7 major economies. I draw the attention of honourable members to these facts: the US grew by 0.7 per cent through the year to September; Japan grew by zero per cent in the year to September; Germany grew by 0.8 per cent; France grew by 0.6 per cent; the UK grew by 0.3; Italy grew by minus 0.9; and Canada grew by 0.5.

If you also go to the current state of economies generally around the world, you find that, while this economy in difficult global circumstances has continued to generate positive growth despite the challenges, we have a large number of economies around the world which have already fallen into recession: the United States, Japan, Germany, Italy, Sweden, Singapore, Hong Kong and New Zealand. Beyond that again, if you were to add those economies which have generated negative growth in the September quarter, you would see that occurring not only in the US, the UK, Germany, Italy and Japan but also in other economies. In fact, a large number of economies in addition to those have had at least one-quarter of economic growth registering negative during the course of the most recent period, including the economies of France and Canada.

The reason I draw attention to these figures is to put in context the performance of the Australian economy at a difficult time. We have a huge contraction in global economic growth across the world on the back of an unfolding global economic recession and the Australian economy is still managing to generate positive economic growth. I would say, however, that the challenge which lies ahead will be difficult for the Australian economy, because the roll-on impact of contracting economic growth around the world on real growth and jobs growth in Australia will be very difficult in the year which lies ahead.

I would also draw the attention of honourable members to recent statements by the President of China, Hu Jintao, about the challenges that they are now facing with a slowing of growth within the Chinese economy. We have noted carefully in this House before the statement of economic stimulus delivered by the Chinese government a month or so ago, but it becomes plain that China will continue to do more by way of monetary policy and other measures to continue to support growth into the future.

The member for Bonner also asked the question: what is the government doing to respond to the challenges which arise from the most recent national accounts data? It is simply this: the government’s strategy for the future will be to continue to rely on fiscal policy operating in harmony with monetary policy. Through fiscal policy we have delivered a $10.4 billion stimulus package, referred to by the Treasurer. But beyond that we have also delivered our support to local government, our support to the car industry and, through our $15.1 billion package, our support to the states—necessary for reform but also providing stimulus on the way through. If you aggregate these numbers, it is worth while considering the dimensions. That aggregates to about $32 billion. That equates to some three per cent of GDP.

See this speech in context