House debates
Tuesday, 11 November 2008
Questions without Notice
Economy
2:08 pm
Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source
My question is to the Prime Minister. I refer to the government’s unlimited deposit guarantee and its consequences: the frozen savings of hundreds of thousands and indeed the hundreds of car dealers that are struggling to finance the sale of automobiles. I ask the Prime Minister: does he take any responsibility for today’s collapse in business confidence, or is it, like all bad news, somebody else’s fault?
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
I thank the honourable member for his question. Firstly, on the question of business confidence, business confidence is bad here as it is in practically every other developed economy in the world. If you look at the surveys of business confidence in the United States, the United Kingdom, France, China, Germany and Italy, as produced in the relevant indices, you will see they are all heading downwards, and that is because of the global financial crisis. The global financial crisis has impacted on global financial markets, which have in turn affected equity markets, which have in turn affected property markets, which have in turn affected the real economy and jobs. Businesses looking at these developments around the world have become pessimistic about the possibility of investment and growth.
The key challenge in responding to that is to ensure that, first of all, we maintain the stability of the Australian financial system. The stability of the Australian financial system was underpinned by the two bank guarantees which we delivered about a month ago—and we did so, I understand, with the complete, bipartisan support of the opposition on that occasion, but I am not so sure that that is the case today. It seems to be a case of their agreeing one day and then disagreeing the next—not looking at what the opposition say but in fact what they then do. They say that they are bipartisan but then, if you look at what they do the next day, they seek to undermine that bipartisanship.
These are tough and difficult economic times, but what is required is, firstly and fundamentally, the stability of the Australian financial system; secondly, governments around the world putting their shoulder to the wheel and supporting appropriate fiscal and economic stimulus for the economies; and, thirdly, governments around the world cooperating on a new regulatory arrangement for the financial systems which landed us in this difficulty in the first place. That is very much the charge which this government has taken on. It is a charge which the government will prosecute into the future. There will be difficult times ahead, not just for Australia but for the rest of the world, but we are determined to act and determined to continue to take all necessary action to ensure that we can do everything possible to support positive growth in this economy in the future, when the rest of the world is already experiencing the ravages of global economic recession.
2:11 pm
Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source
My question is also to the Prime Minister. Will the Prime Minister outline the importance of the government’s Economic Security Strategy as part of Australia’s response to the global financial crisis?
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
I thank the member for Melbourne Ports for his question. The key challenge is what governments do around the world in support of fiscal measures and broader economic measures to support growth at a time when the International Monetary Fund tells us that global economic recession is looming across the major economies. If we look across the world at the stimulus packages which have been embraced by various economies, we begin to see evidence of governments rising to this challenge and taking appropriate action.
Yesterday I made reference to the stimulus package which has been embraced by the government of China. Upon further examination of the detail of that package, this is a major package indeed, one of relevance not just to us but also to the wider region and to the world economy. I support fully the actions taken by the Chinese government, obviously, mindful of their domestic circumstances but, I believe, equally mindful of the importance of their growth to the wider regional and global economy. This is an important economy for Australia—important given the extent to which our external account and our trade account are dependent on future access to Chinese markets and the sale of Australian goods and services into that market. We will continue to work as closely as possible with our friends in China to ensure that we maintain maximum access to those markets in the future. It is of relevance to Australia, of relevance to jobs in Australia, of relevance also to our future prosperity.
Fiscal stimulus action has of course been taken elsewhere in the world as well. You see large fiscal stimulus packages in Germany, €23 billion; in the United States, US$170 billion; in Japan, something approaching ¥40 trillion; and, in Korea, $10.98 billion or KRW14 trillion. You see governments around the world embarking on fiscal stimulus packages, as we have done in Australia.
It is important for the government of Australia to embark upon a war against unemployment because if we look at what is happening around the world we see rising jobless data in many of the developed economies. Unemployment in the United States is already running at 6.5 per cent; in the UK, 5.7 per cent; in France, eight per cent; in Germany, 7.5 per cent; and it is rising in other economies as well. That is why we have embraced an Economic Security Strategy, a stimulus package of some $10.4 billion, and that is why we believe it is necessary in our current circumstances to support growth but also to support jobs. That package of $10.4 billion, we are advised, will help to create up to 75,000 additional jobs over the coming year. It is a $10.4 billion package aimed at helping to create up to 75,000 additional jobs over the coming year.
On top of that, the government announced yesterday a long-term strategy of $6.2 billion in support for the Australian automobile industry. This industry already directly generates a large number of jobs. If you add the indirect generation of unemployment, there are some 200,000 jobs in Australia dependent on the future success and transformation of that industry. That is the second step that we have embarked upon.
The third step, of course, lies in what we will do on infrastructure. Infrastructure investment, both through the Building Australia Fund and more broadly, is very much on this government’s agenda and has been from day one. Infrastructure investment, investment in the future of our auto industry and investment through the payment systems we have provided to families and pensioners for the future as well are designed to underpin growth and jobs growth into the future—all part of this government’s war on unemployment—and that is something we need to embrace more fully.
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
Those opposite seem to think that this is unimportant.
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order! Those on my left will come to order!
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
I regard war on unemployment as the government’s highest priority. Those opposite, presumably, would have us stand idly by as the world at large experiences increased unemployment.
Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source
Mr Ciobo interjecting
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
This government will not stand idly by. It will take necessary action through an economic stimulus strategy and necessary action through our automobile strategy and infrastructure strategy, and we are doing these measures in addition to what is already equivalent to a two per cent interest rate fall in recent months—a two per cent interest rate fall which, if you have an average mortgage of some $251,000, results in a $314 a month reduction in your mortgage.
Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source
Mr Haase interjecting
Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source
Mr Ciobo interjecting
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order, the member for Kalgoorlie and the member for Moncrieff!
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
Those opposite catcall because they obviously do not believe it is necessary for government to act on supporting the economy and supporting jobs in the face of a global financial crisis and in the face of the global economic downturn which flows from the crisis. This government has a course of action for the future. This is the strategy that we are embarked upon and the government remains determined to take whatever additional action is necessary for the future in order to support the economy, to support growth and to support jobs. It is a responsible course of action for the future and I ask those opposite to join us in a bipartisan spirit. I ask those opposite not simply to say one day that they offer the government bipartisan support and then the next day seek to undermine it.
Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source
Mr Haase interjecting
Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source
It would be useful for the first time in recent times for the opposition to actually do what they say, because this nation looks on all of us to provide leadership through what is a period of great economic challenge flowing to our economy off the back of a global economic and financial crisis.