Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister update the House on the government’s response to the global financial crisis?

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

The government has acted responsibly both on the question of guarantees to bank depositors in Australia and guarantees for the term funding arrangements of our banks operating internationally to secure lines of credit for the Australian private sector and on what has been necessary to do for the fiscal stimulus of this economy, despite the best efforts of those opposite to talk this economy down throughout the course of this year.

Opposition Members:

Opposition members interjecting—

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

I seem to remember that earlier this year the member for North Sydney was doing precisely that, followed by others in their public remarks. I say to those opposite that, at difficult and delicate times like this in the global economy and the Australian economy, confidence is important, dealing effectively with the challenges we face is important and acting responsibly in accordance with the advice the government has received is the right course of action rather than short-term politics.

The Federal Reserve chairman in the United States, Chairman Bernanke, referring to the United States economy overnight, said ‘We are in a very serious slowdown in the economy which has very serious consequences for the public.’ Furthermore, Chairman Bernanke went on to call for a fiscal policy response, saying:

With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate.

That is what we see in governments around the world at present. Given the challenges which have occurred coming off the back of the global financial crisis and the impact which it has had on credit markets, stock markets and the real economy, growth and jobs, we have seen governments elsewhere around the world now debating what to do in terms of the fiscal policy stimulus—that is, to provide the economy and growth in jobs with a further level of support. Last Tuesday this government acted with its statement on this matter: the $10.4 billion Economic Security Strategy. Given recent developments not just in the United States but elsewhere in the global economy, and the wash-through effect which this has over time on growth and jobs in this economy, this has been a responsible course of action. I also again emphasise recent statements coming out of the People’s Republic of China about growth there slowing somewhat and the need therefore for the government to boost consumption and to support job creation. Again, I refer to the statement of the governor of the Chinese central bank on 15 October to that effect.

That is why this government, mindful of what is coming down the railway tracks towards the global economy, of which we are a part, over the 12 months coming, has acted sternly and decisively on the Economic Security Strategy we have put forward to the Australian people and which has received little more than backbiting comment from those opposite as opposed to full-hearted support. In fact, the measures we have taken are of direct support not only to long-term growth and jobs in the economy but also to pensioners, carers and seniors, families, first home buyers and those needing additional trading places. Of course, we look forward in December to the acceleration of our nation-building agenda. The need for this package has been reinforced by observations that we have seen in recent times by the economic commentators and also by decisions by our own central bank. I draw the attention of honourable members to the decision not long ago to reduce interest rates by 100 basis points. All these measures are necessary—fiscal policy and monetary policy moving in the same direction—in order to ensure that this country has the greatest chance possible to continue to maintain positive growth into the future and to continue to generate jobs growth into the future as well.

We have been able to act because this government is in a strong budget position. Information overnight demonstrates the strength of our position relative to a number of our peers around the world, where you see various governments in considerable difficulty on the budget front. This is why the government, in its May budget, brought about a significant budget surplus to provide us with a buffer for growth for the future, and the time to use and draw down on that budget surplus has arrived. I also say to the country and to the House how important it is to have made provision for that budget surplus earlier this year. We can deliver this $10.4 billion stimulus package to the economy while continuing to provide a budget outcome for Australia which remains comfortably in surplus. This represents decisive action on the part of the government in dealing with the challenges Australia now faces—

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

It’s hype!

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

challenges which do not, may I say to the honourable gentlemen who will ask the next question, add up to hype as he says. I would say to the Leader of the Opposition that the superannuation policyholders around Australia do not regard the global financial crisis as hype. The pensioners of Australia do not regard the global financial crisis as hype. Those millions of Australians who have investments directly and indirectly on Australian stock markets do not regard the global financial crisis as hype. Those concerned about the impact of the global financial crisis on long-term growth and jobs growth in this country do not regard it as hype. I believe the use of that term by the Leader of the Opposition demonstrates just how far out of touch he has come with the real concerns of Australians facing the uncertainties which come to this country off the back of this global financial crisis.