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

Because of the significance of this day 12 months ago, I thought it was important to inform the House what has been done in response to a virtually unprecedented economic crisis. I have outlined two meetings of the G20; I will now come to the third. That is the Pittsburgh agenda, which looms next month.

Whatever national actions have been undertaken by the parliament and by the government of Australia in our national stimulus strategy, they pale into insignificance against global actions which have been taken through the agency of the G20. Firstly, the stimulus measures that I referred to before need to continue to be implemented, as affirmed recently by the G20 finance ministers. Secondly, there is the question—as proposed by a number of governments—of how to coordinate effective medium-term exit strategies from the extraordinary interventions which all governments have had to engage in, in fiscal policy but also in the monetary policy actions undertaken by our respective central banks. Thirdly, there is the issue of the development of a long-term new sustainable growth model for the future of the global economy which does not simply rest on a return to business as usual—in terms of high levels of North-East Asian and Middle Eastern credit exports, as surplus economies, to high levels of debt driven consumption in economies such as the United States—as that is unlikely to occur. This poses the core question for anyone seriously engaged in this debate around the world, which is: where will the next increment of global economic growth come from? That should seize the attention of all honourable members, because, unless that question is answered globally, actions taken nationally will again pale into insignificance.

Finally, we need to implement the agenda of financial market regulation reform which was initiated both in Washington and in London in terms of three specific areas where work is being concentrated: (1) the capital requirements of financial institutions, in particular the largest ones with systemic significance for the global economy; (2) executive remuneration in financial institutions around the world; and (3) how to deal with what is described by the Financial Stability Board and others as financial institutions too big to fail. These are important areas of reform. Pittsburgh, it is hoped, will achieve progress in each of these categories, and it is important that this reform agenda be continued into the future.

For the benefit of the House’s attention, I have spoken on these matters at length today for this reason: 12 months ago, with the implosion of Lehman’s, we all teetered at the abyss. In the 12 months since then—in substantial measure because of the leadership shown by the United States of America, through the convening of the G20, and the coordinated global actions undertaken through that agency—this global economy has come back from the abyss. As a result of those actions coordinated by the United States, Australia’s interests have been well served by American leadership through the G20, and I would have thought that all members of this House would have been united in a positive response to this strong exercise of US global leadership.

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