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

Here at home, we have seen sobering unemployment data released today. The unemployment rate increased substantially, from 4.5 to 4.8 per cent in January, the largest monthly increase since October 2001. The number of unemployed persons increased by 36,800, to 540,200 persons. The Deputy Leader of the Opposition and Treasury spokesperson for the Liberal Party described this jobs result as strong:

Today’s data clearly demonstrate the strength of the Australian labour market despite a worsening international economy. This supports the Coalition position that the Government’s $42 billion spending spree is simply too big …

The Liberal Party is demonstrably out of touch. It is demonstrably out of touch with the challenges facing the Australian economy now and the challenges facing those 36,800 Australians who, in the most recent jobs data, have lost their jobs. The Australian Chamber of Commerce and Industry today described today’s jobs data in very different terms to those employed by the Liberal Party. The Australian Chamber of Commerce and Industry said today:

Today’s employment data is the latest evidence of the need for urgency.

…            …            …

The decision by the Senate this afternoon to not pass the Australian government’s Nation Building and Jobs Plan is a blow to business confidence and investment certainty.

That is from the Australian Chamber of Commerce and Industry.

How does the quantum of the stimulus package proposed by the Australian government compare with those which are being recommended elsewhere? The Leader of the Opposition today described the government’s plan as too large, a package of spending that represents an enormous percentage of GDP. The size of the stimulus package is entirely appropriate to the challenges we face. This package delivers 1.1 per cent of GDP in 2008-09 and 1.4 per cent of GDP in 2009-10, for a total of 3.4 per cent of GDP over the forward estimates, two per cent being delivered in calendar year 2009.

The size of this plan is also modest in relation to what other governments are doing abroad. For the benefit of the House, President Obama’s stimulus package is six per cent of GDP, Italy’s package is 5.2 per cent of GDP, Canada’s package is 3.7 per cent of GDP, Korea’s package is 8.4 per cent of GDP, Germany’s packages come to 3.4 per cent of GDP, Japan’s packages total 2.3 per cent of GDP; and, again, that which is contained within the Australian package translates into two per cent of GDP in calendar year 2009.

The Leader of the Opposition has also argued, as has the Liberal Party more broadly, that this $42 billion stimulus plan advanced by the government will result in too much borrowing. Average net debt across the OECD is estimated to be 45 per cent of GDP in 2010. In 2009, net public debt in the following countries is expected to be as follows: 50 per cent of GDP in the United States, 48 per cent of GDP in the United Kingdom, 24 per cent of GDP in Canada, 44 per cent of GDP for the Euro area and, I repeat, 45 per cent on average across the entire OECD. As a consequence of the government’s proposed package and dealing with the borrowing requirement which comes from the collapse in revenues occasioned by the global economic recession, the Australian package and the borrowing associated with it for this collapse in revenues will result in five per cent of GDP as net debt. The OECD average, therefore, is nearly 10 times that of the Australian proposed average. Let us put that into context.

Secondly, let us go to the argument about debt in general and examine the Liberal Party’s hypocrisy on the question of debt. Prior to 1996—and some honourable members will recall this—the Liberals said that they would reduce foreign debt. I quote the former Prime Minister, Mr Howard, who said, ‘I can promise you we will follow policies which will bring down the foreign debt.’ Let us examine the factual record. In 1996, foreign debt stood at $193 billion, or 37.9 per cent of GDP.

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