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

I thank the member for Hasluck for her question. Australians can be confident about their long-term economic future because we are weathering this global economic storm better than most other economies. Firstly, the economy is the fastest growing among the major advanced economies. Secondly, we have the second lowest unemployment of the major advanced economies. We have the lowest debt of the major advanced economies and also, unlike the other major advanced economies, this economy is not in recession.

Part of the reason for that is that the government has been on the front foot implementing our nation building for recovery plan. The nation building for recovery plan is being driven in each and every corner of the Commonwealth resulting in some 35,000 construction projects across the country. The alternative of course, recommended by some of those opposite, is to sit on our hands and do nothing. This is not the recommendation of the government nor is it its plan of action.

The depth of the global economic challenge we are facing is underlined by more data which came in from Europe overnight. The European economies lost a record 1.22 million jobs in the first quarter. Employment in the 16-member euro region fell 0.8 per cent from the fourth quarter, the largest decline since 1995, and the European Commission is now forecasting that unemployment across the euro region will average 9.9 per cent this year and 11.5 per cent in 2010.

The IMF managing director, Dominique Strauss-Kahn, also said that there are ‘some green shoots’ out there—and we should emphasise the point—and that the IMF has revised upwards its forecast for 2010 but ‘we have to be very cautious and a lot has to be done to be as sure as possible that the recovery will take place in the first half of 2010’. That is what the IMF had to say. US Treasury Secretary Geithner has echoed a similar tone of caution in his remarks when he said:

Recovery will be slower than we would normally see. This is still going to be an exceptionally challenging period for business and for consumers.

That underlines the depths and the dimensions of the global economic challenge the government faces.

Let us also place this challenge in some historical context. The global economy is forecast to contract by 1.3 per cent in 2009, the first time that there will be a contraction in the global economy since the IMF began keeping records just after the war. Let us put that firmly in mind. Let us also compare it to the two previous recessions we have had in recent times, the global outlook both for the 1990s and for the recession of the 1980s as well. In the 1990s growth fell to positive 1.5 per cent in 1991 at the depths of that particular recession, and growth fell in the 1980s recession to 0.9 per cent in 1982.

The reason I emphasise these figures is to underline the fact that against the measure of the two previous recessions of the eighties and nineties, with which most people are familiar in this country, we are facing a much more difficult set of economic circumstances with global growth being projected to contract for the first time since the IMF began keeping its records just after the war. For us, of the economies on which we depend, our trading partners, eight of our top 10 trading partners are already in recession and China, of course, has halved its growth from two years ago. Across the world only three of the 33 advanced economies have recorded positive growth.

The nation building for recovery plan that the government is implementing has also been complemented by aggressive actions by the Reserve Bank on interest rates. Since the government has been in office, Australian families have benefited from six interest rate cuts. There has been, at the official rate, a cut of 425 basis points and interest rates are now at their lowest point in nearly 14 years. Under the Liberals Australian families suffered 10 interest rate rises in a row, a rise of some 250 basis points.

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