Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

If the shadow Treasurer is realistically arguing that fiscal stimulus had no impact on economic growth in Australia over the last two years, then my answer to him is: no, we will beg to differ. We will beg to differ because I think anybody who is an objective and considered analyst of these events would acknowledge that fiscal stimulus had a clear impact on economic growth. I know that the shadow Treasurer and his opposition colleagues, who were sitting by and hoping that Australia would go into recession, because it was a good way to ride back into government, would be disappointed with the fact that Australia avoided a recession and that the stimulus actually worked.

The stimulus worked in two ways. It had an impact on economic growth directly through stimulating expenditure. It also had a very important impact on confidence. I remember that the honourable member’s colleague the former Leader of the Opposition used to rise in the chamber and lecture us about how important consumer and business confidence was and how it had collapsed, and he said that that collapse was all down to the efforts of the Rudd Labor government. Then of course we had the stimulus and consumer and business confidence rose in Australia by a greater level than in any other comparable economy. Then the former Leader of the Opposition went very quiet.

Economic stimulus has impacts in two ways: it has the direct impact and it has the indirect impact through the impact on confidence. As the Treasurer has often put it, very eloquently, it is worth more than the sum of its parts, because of that impact on confidence. So I do not share the premise of the shadow Treasurer and I am sure he will understand that I will want to check his characterisation of the Treasury’s evidence before estimates, because many of his colleagues sometimes choose to verbal bureaucrats. I want to check that he has accurately characterised their comments, because I think that would be the appropriate thing to do in fairness to those Treasury officers.

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