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

I thank the member for Brisbane for his question. We have various developments in terms of the global economy which are of relevance, of course, to the unfolding strength of the Australian economy and the impact which flows on the question of jobs.

It is important as we work our way through the implementation of the government’s Nation Building and Jobs Plan that we are always mindful of the fact that we are in the midst of a global economic recession. UK GDP contracted by 1.5 per cent in the fourth quarter, German GDP contracted 2.1 per cent in the fourth quarter—the largest contraction since reunification in the early 1990s—and trade data from Japan showed a fall in Japanese exports of 45 per cent.

President Obama addressed congress last night on the economic challenges facing the world and the United States. President Obama correctly called this ‘a moment in history’ because it is necessary for us all to be seized of its absolute importance, of as much as possible coordinated government action across the world. He described it as a day of reckoning and said that ‘the time to take charge of our future is here’. President Obama outlined his fiscal stimulus plan to invest US$787 billion into the US economy. He said that over the next two years this plan will save or create 3.5 million jobs.

President Obama also recognised the growing threat to prosperity, which lies in our credit markets. The President noted the flow of private credit is essential. He said:

… even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.

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The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.

You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.

President Obama is absolutely right because what he is describing in his address to the United States congress is the challenge, of course, that we face right across the world, and that is the problem of global private credit supply. That is why in Australia we have acted in relation to particular challenges within individual credit markets, actions which, by and large, have been uniformly attacked by those opposite in relation to car dealership finance, in terms of the commercial property market and also in terms of residential mortgage-backed securities.

That is why acting to restore the flow of lending to the private sector will be a key priority for the G20 leaders’ summit on 2 April. We, together with others, are working hard with other G20 members to find an effective global solution to the problem of these banks’ bad assets, as we are on restoring global growth and strengthening the regulatory framework for the financial system so as to minimise the prospect of future crises. These actions are necessary globally. The problem at present is that we see a range of uncoordinated, individual national actions in relation to the restoration of the health of private credit markets, and that continues as a core of the global economic challenge.

This will be a difficult period ahead for the global economy. When we discuss job losses in Australia, which we will do a lot in this parliament as the year progresses, action can be taken nationally to support, stabilise and normalise Australian credit markets and to restore—to the greatest extent possible—private credit flows. We can act nationally also when it comes to nation building and jobs investment through a Nation Building and Jobs Plan—which each one of those opposite has voted against. I would recall, for the benefit of those opposite, the comments this morning by former Woolworths boss Roger Corbett, who said the following in relation to recent tactics by the Liberal and National parties in opposition to the stimulus package before the parliament:

… delay …is very, very counter-productive to the end result …

He said:

I think, generally, economic theory, sensible theory is that a package is needed and I think the community expects our governments operating in this crisis situation to act in a bipartisan way.

He went on to say:

I would like to call on the opposition here in NSW, (Opposition Leader) Barry O’Farrell and the federal people to pull together to close this gap because speed is of the essence.

Roger Corbett from the business community, former CEO of Woolworths and, of course, with Reserve Bank experience, is a business person making plain to those opposite in his direct remarks that what is required here is for the nation to pull together in response to a Nation Building and Jobs Plan to provide the fiscal stimulus necessary to see Australia through the crisis.

I heard the comments earlier today and last night from the shadow Treasurer calling for hope and optimism. Calling for hope and optimism is one thing; the monstrous contradiction between such a person doing so on the one hand and then predicting an economic recession 12 months later, I leave to one side. But calling for hope and optimism is a dead letter in the absence of a concrete strategy and plan for action. That concrete strategy and plan for action is represented by our $42 billion nation-building plan. This government has an economic strategy to see Australia through this crisis. Those opposed to us—the Liberal and National parties—have a political strategy that seeks to take political advantage from this crisis. Therein lies the difference.

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