Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

Previous Speakers have ruled against frivolous point of order and have warned honourable members for that sort of stunt. The honourable member for Fadden, who denigrates Professor Stiglitz, might want to hear what Professor Stiglitz went on to say. He said:

That package was delivered early, with cash grants that could be spent quickly followed by longer-term investments that buoyed confidence and activity over time. In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost.

In Australia the stimulus helped avoid a recession and saved up to 200,000 jobs. And new research shows that stimulus may have … actually reduced government debt over time. Evidence from the crisis suggests that, when the economy is weak, the long-run tax revenue benefits of keeping businesses afloat and people in work can be greater than the short-run expenditure on stimulus measures. That means that a well-targeted fiscal stimulus might actually reduce public debt in the long run.

I quote that at some length because it is an important contribution. I simply make this point: if Australia had gone into a deep and prolonged recession, as was likely without government intervention, that would still have seen government revenues fall, government expenditure increase and Australia go into deficit, and the country would be dealing with the overhang still at this point.

It is not just Professor Stiglitz who the honourable member for Fadden chooses to denigrate; it is also the OECD. He might choose to denigrate them in a moment. The OECD said of Australia's response:

The stimulus package was among the most effective in the OECD and is estimated to have boosted growth by some two percentage points in 2009.

Are we going to denigrate the OECD as well? Are they Keynesian lefties as well? The OECD endorsed Australia's response during the global financial crisis. And in an open letter to TheSydney Morning Herald more than 50 of Australia's leading economics professors said this:

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the economy from a deep recession and prevented a massive increase in unemployment.

The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.

We hope that the economic achievements of the Australian Labor Government will be recognized by the population.

That is 50 economists, professors of economics. What would they know compared to the vast economics knowledge of the member for Fadden?

Richard Goyder, managing director of one of Australia's largest companies, Wesfarmers, said:

I think they—

he is referring to the stimulus payments—

were very effective. They helped turn what was potentially a second quarter of negative growth into a quarter of very small positive growth. I reckon the psychological impact of going into technical recession versus not going into technical recession made a big difference to the Australian psyche and economy.

So this is the record: not just Professor Stiglitz, as eminent as he is; not just the OECD, as considered as they are; not just the International Monetary Fund, as respected as they are; not just 50 economics professors, as respected as they all are—but also Australian business. I chose to quote Richard Goyder. There were plenty of others at the time who recognised the impact of the stimulus in ensuring that their businesses remained viable, comparatively, in those very difficult economic times.

We have heard a lot too about the state of the budget and no doubt will hear again more today. I am simply going to make this point. I am not going to belabour it but I am going to make the point. We have seen the previous Labor government stimulate the economy when necessary—something we do not apologise for, something we are proud of—but then put in place measures to ensure that spending was reduced as economic growth returned. A 2013 IMF paper, having reviewed government spending in Australia since the 1960s, confirmed that the only profligate period of spending was not during the GFC, not the stimulus payments, but was under the Howard government.

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