Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for Calwell for her question. It is very important that fiscal and monetary policies do work together to stimulate our economy, to support vital employment in the economy, to support the business community and to support the rural community. Indeed it is doing that. We had the statement today from the Reserve Bank that they have decided to keep official interest rates unchanged at three per cent—the lowest in almost 50 years. This follows rate cuts totalling 4.25 per cent since September last year. That has seen the standard variable home mortgage interest rate fall to 5¾ per cent, which is delivering savings of $750 per month to a family with a $300,000 mortgage. Lower interest rates, combined with the government’s stimulus, are helping to cushion Australians from the very worst of the global recession. I will quote from the statement from the Reserve Bank today. The statement said:

Monetary policy has been eased significantly … Fiscal measures are also providing considerable support for demand.

So monetary policy is working with fiscal policy. Fiscal policy has been put in place in three waves: firstly, to support households; secondly, through shovel-ready investments in infrastructure projects right across the country; and, of course, the third phase was delivered in the budget, which is investing in the longer term nation-building infrastructure that those opposite oppose. As the Reserve Bank statement points out, this is very necessary because of the evidence occurring in the international economy, which is contracting, and has contracted sharply, particularly in the March quarter.

Last night we received further evidence of the impact of this global recession, with Canada reporting that its economy had contracted by a further 1.4 per cent in the March quarter—a very dramatic contraction for that country. This means that something like 19 of the 21 advanced economies have recorded growth outcomes which went backwards in the March quarter. That means that the March quarter was a particularly bad quarter internationally. It demonstrates the very strong case for the economic stimulus put in place by this government: responsible borrowing to support employment, to support Australian businesses and to support Australian families. That is the support that is required now, given the circumstances that have been imposed on this country by the rest of the world. It is absolutely incomprehensible that those opposite could sit in this House and oppose vital measures that support employment right across the community, that support demand and that support Australian businesses.

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