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

I thank the member for Dobell for his question because, as the parliamentary year draws to a close, I think it is worth reflecting on the impact of the global financial crisis on our economy and also on the challenges that lie ahead in the next year or so. It is the case that share markets around the world suffered their biggest decline since the 1927 stock market collapse. It is also the case that we have suffered the sharpest contraction in the global economy since the Great Depression. Something like 12 million workers in advanced economies have lost their jobs and every major advanced economy has fallen into deep recession. Australia was in danger of following suit.

As we are aware, the very prompt and decisive action by the government, the Reserve Bank and the resilience in the Australian community did help Australia withstand the full impact of this global recession. As the IMF said only a few weeks ago:

An aggressive policy response is likely to help Australia escape a contraction in 2009.

I think all Australians can be proud of what we have all achieved together—employers and employees—to cushion the impact on our economy by pulling together and working together at this difficult time. Because we have done that, we have come through in a stronger position than any other advanced economy. This is what the OECD confirmed last week in their report:

Australia has stronger growth, lower unemployment, lower debt and lower deficits than other advanced economies.

The government’s stimulus has meant that we did avoid recession and, in doing that, the destruction on capital, the destruction of skills and the destruction on communities. Of course, there are very substantial challenges that remain. We are under no illusions about that. The government are fairly and squarely focused on the challenges that lie ahead through next year.

The IMF has already indicated that the global recovery is uneven, that it is not yet self-sustaining and that it remains dependent on policy support. As we showed in MYEFO there is still spare capacity. The economy is expected to operate below capacity for some time and unemployment is still expected to rise. We are still feeling the effects on our terms of trade and, of course, on business investment. We can see that today in the capex data. It shows that capital expenditure by businesses fell by 3.9 per cent in the September quarter. While investment plans for 2009-10 have improved somewhat, they remain 7.7 per cent lower than the same estimate for 2008-09. The importance of that is that the government’s investment and infrastructure does remain very important in terms of supporting business and employment in the year ahead. I think it underscores the importance of the economic stimulus.

We are in a better position than we expected earlier in the year. That is a good thing. And we do know that we are better placed than many other economies to meet the challenges ahead. That is why the government are moving to put in place reforms like the Carbon Pollution Reduction Scheme. That is why we are working hard on our productivity agenda and why we are serious about reforming the tax system. The country has some hard yards ahead. Reform is never easy. We have seen that in the House with the reaction by some to the Carbon Pollution Reduction Scheme. What we do know is that there will be difficult reforms ahead. The important thing is that this government have the commitment to put those in place and, in doing that, we do need maximum unity in this parliament. All sides of the House need to work together so that we can maximise the opportunities for the future to make ourselves more prosperous, to support employment and to support business. That is why the government are so focused on our reform program as we go through the year and into the years ahead.

See this speech in context