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

In 2007-08, China was Australia’s largest trading partner and Australia’s second largest export partner behind Japan. The shadow Treasurer interjected before, ‘What about Australia?’ If I am talking about the state of the Chinese economy and the state of Chinese demand for imports from around the world, and if Australia has as its second largest export market the People’s Republic of China, I would have thought that even the shadow Treasurer could have concluded it was of some material relevance to jobs in Australia. But, again, that does not suit his political strategy.

Service exports to Australia have grown at around 26 per cent since the start of the decade, as one simple indication of the significance of the Chinese economy to employment in our country. Furthermore, we have seen reports of a fall in Australia’s thermal coal prices, with prices down 44 per cent on last year. Again, I would draw the shadow Treasurer’s attention—given that he regards this matter as irrelevant to jobs in Australia—to the following possibility: as a result of that, earnings from coal and iron exports could decline by up to $35 billion from 2008-09 to 2009-10. That is sucking out $35 billion from the Australian economy. Therefore, you are faced with a very clear alternative: either you sit back, watch, wait and see, do nothing and seek to take political advantage from a global economic crisis—which is the political strategy of those opposite—or you engage in an economic strategy to reduce the impact on Australia. This government’s resolve is to engage in such a strategy.

Of course, other governments around the world are engaged in similar strategies. Again, I would draw the House’s attention to the statement on Thursday of last week by the Chinese government that it had announced a projected deficit in its budget of 950 billion renminbi for 2009, a deficit of some three per cent of GDP for 2008. This is the highest fiscal deficit since 1979, including the deficit following the Asian financial crisis.

These are the global economic realities with which every government around the world, including Australia, has to contend. Our strategy is straightforward: firstly, to stabilise Australian financial markets through the provision of our bank guarantees; secondly, the immediate stimulus through the provision of payments to pensioners, carers, farmers and others who need support, and through that the provision of support for the retail sector in Australia and the 1.5 million Australians who are employed in the retail sector; and, thirdly, longer term economic stimulus. That is the government’s strategy; that is the one that we are embarked upon.

I would simply say this to those opposite as they ask one politically driven set of questions after another: why do they have any problem with such a basic proposition that, as the rest of the world goes into recession, Australia is somehow not immune from world events, that it will affect Australia? Believe me, it will. How could they possibly disagree with a basic proposition like that? There will be an impact here in Australia and there will be an impact around the world. Therefore, that underpins the necessity for us prosecuting a strategy to deal with these circumstances.

In recent times we had a statement to this effect—and I quote the member for Higgins because he is a person of some relevance to recent debates within the Liberal Party. In 2002, the member for Higgins said:

But the idea that somehow Australia is immune from world events, that the rest of the world can go into recession and it won’t affect Australia, believe me it does.

That was the member for Higgins as Treasurer of Australia in 2002. Let us just look at what was happening in the world in 2002. What was world growth in 2002 when the member for Higgins was Treasurer and saying that Australia could not be immune from world events as the rest of the world goes into recession? World growth was 2.8 per cent in 2002 whereas, today, according to the IMF and the World Bank, growth in the world will be less than zero.

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