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

It is quite plain that the strategy of those opposite would be to fiddle while Rome burned. Our strategy as a government was to act, and to act on the front foot, and to take concrete decisions in the economy in order to make a difference. What I still cannot grasp is why this Leader of the Opposition, however temporarily he may be there, is still of the belief that the intelligent thing for him to do, both politically and economically, is to continue to talk the economy down. Why he believes that it is good for sentiment in the economy to run a negative and dishonest scare campaign on debt and deficit leaves me completely mystified because those opposite are abdicating any real level of responsibility.

The first part of the Leader of the Opposition’s question went to the reasons why the Australian economy has maintained positive growth in the first quarter. The Leader of the Opposition is not reflecting on the fact that in the answer I gave to the first question in the House today, and earlier in a press conference and in what the Treasurer said as well, we paid direct tribute to the fact that business, small business, workers, tradies, families, communities, and local government are out there acting, despite the negative sentiment being generated by the global economic recession, and making a difference for Australia. They are being positive, in contrast to what the Leader of the Opposition is doing, which is being negative.

Secondly, on the question of net exports, the Leader of the Opposition should also be familiar with the point just made by the Treasurer about the impact that we face in the future on the terms of trade. It is quite plain that we are under a significant challenge when it comes to changes in the terms of trade and that that will work its way through the economy over time. That is why we must continue to work on all the drivers of economic growth. That is why we have been out there investing in housing, social housing as well as the first home owners boost—one of the big drivers of total final demand. That is why we have been out there investing in consumption through the work that we have put into providing cash payments to carers and to pensioners and to others. That is why we have been out there unveiling a public investment strategy for the future to support infrastructure, because that, too, is one of the drivers of total final demand. That is why the government is acting on all these fronts, including the challenge we face with private fixed capital investment. That is why the government in the budget announced an increase from 30 per cent to 50 per cent in the special investment allowance for small business through to year’s end to encourage small business to get out there and to take on additional plant and equipment in the period ahead. All these are drivers of total final demand in the economy. We are proceeding across multiple fronts.

What I find absolutely extraordinary in the negative attack which continues to be launched by those opposite is that they cannot even agree among themselves. Once again we have the member for North Sydney and the Leader of the Opposition proceeding in different directions. Asked this morning this question about the impact of the government’s economic stimulus strategy, the Leader of the Opposition said, as follows, that there has been:

… no discernible effective positive economic impact—

of what we have done. Everyone else disagrees with the Leader of the Opposition. Everyone else who has been asked about this disagrees with the Leader of the Opposition. But that is what he says: no discernible positive economic impact. The same morning, the member for North Sydney was asked this question: ‘So, Joe, are you saying no job has been saved or protected by government policy in relation to the world economic downturn?’ His response: ‘Of course there have been jobs that have been created.’

So we have the member for North Sydney, the Treasury spokesman, admitting publicly on this day of the national accounts numbers that there has been a direct impact of the government’s measures on jobs and we have the Leader of the Opposition saying that there has been no positive impact whatsoever. I would suggest that those opposite at least got their script together. The member for North Sydney should also reflect on the fact that he did not get the strategy right on the day after the budget, when he said that their strategy was $25 billion less than ours on debt and deficit. He has not got the strategy right today, when he says that our strategy is creating jobs and the Leader of the Opposition says that it is not creating jobs. I draw their attention to comments today from Paul Brennan, the economist at Citigroup, who said this morning, ‘Front-loaded stimulus to households helps avert technical recession.’ Michael Blythe, the chief economist at CommBank, says:

The Q1 readings provide further evidence that the economic policy is gaining traction in Australian.

The economist at the ANZ Banking Group said:

Today’s solid result suggests that fiscal and monetary policy stimulus has overall been effective in softening Australian economic downturn.

Westpac’s economic update said:

The cash transfer from the Commonwealth government to households last December enabled households to boost spending as households largely spent the December cash payment with household savings were able to jump to 6.9 in Q4 fell back to 1.8 per cent.

You have all these third-party economists coming out today, not only welcoming the fact that we have had positive growth in this quarter but directly attributing it to what the government has done by way of supporting the economy through cash payments to households on the way through. Again I say to those opposite: why is it that, on a day when Australia has positive economic news, there are only two Australians—the Leader of the Opposition and his Treasury spokesman—who are unhappy? The reason they are unhappy is that it does not fit with their political script to talk the Australian economy down. Our strategy, National Building for Recovery, is to build the Australian economy up and we will continue to implement that strategy.

See this speech in context