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

I was talking about what is happening elsewhere in the world, in other advanced economies—the very deep and sharp and sudden contractions that have occurred across these economies, not only in the December quarter but they have been repeated in the March quarter. Germany in March contracted by 3.8 per cent; France contracted by 1.2 per cent; Canada—only this week the figures came out—contracted by 1.4 per cent. All up, the major advanced economies contracted by 2.2 per cent in the March quarter. So, while every advanced economy is going backwards, Australia is going forwards. It has the strongest growth amongst all of those advanced economies.

Today’s figures do show that economic stimulus payments have helped to cushion Australia from the global recession. Despite the further deterioration in the global economy, household consumption, as the Prime Minister said before, rose by 0.6 per cent in the March quarter. Without the cash stimulus payments which were made to pensioners, which were made to families, which were made to veterans, which were made to carers, Treasury estimate our economy would have contracted by around 0.2 per cent in the quarter. That is the difference that those opposite simply do not understand, because what that means is fewer jobs lost and thousands of families saved from the loss of a breadwinner. To us on this side of the House, that is what counts—supporting working families, supporting business and supporting demand in the economy precisely at the time that the global economy is contracting so sharply.

But of course, as the Prime Minister said before, we are not out of the woods yet. There is a rocky road ahead, and there are figures published today which point to that, so we have to be vigilant and we have to continue with the economic stimulus. We can see from the new business investment figures that new business investment fell by 6.3 per cent in the quarter as businesses have begun to scale back spending in the face of sharp falls in global demand and weaker profits. This reinforces the need for our nation-building investment in roads and rail and ports, clean energy and the shovel-ready projects which are going on now—35,000 right across the country, all supporting jobs, all supporting business, all supporting the Australian community. And, of course, we have got the impact of the collapse of the terms of trade. Global commodity prices have fallen by 7.8 per cent in the quarter. That is the largest quarterly decline in 35 years, and that has hit our export earnings hard. While volumes have held up, export earnings fell by $6 billion in the quarter. That is the third biggest fall on record.

So we know the full impacts of this global recession that has still got some way to run and that will continue to impact on employment at home. It will mean more jobs will be lost because of the global recession. But what we are doing here is putting in place phase 1, phase 2 and phase 3 of the economic stimulus to support employment in the Australian economy. Today’s welcome figures bear that out. What we are doing is addressing the challenges that lie ahead for us by putting in place our battle plan for the economic stimulus, which is supporting Australian families at their time of need.

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