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

My question is addressed to the Prime Minister. Given that the OECD, the International Monetary Fund, the Reserve Bank and the government all forecast positive economic growth for this year and next year, why is the Prime Minister continuing to talk down our economy and talk up his plans for a budget deficit?

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

As I indicated to the Leader of the Opposition yesterday following my return from both the G20 summit in Washington and the APEC summit in Lima, the conversations with heads of government at both those meetings indicated that the situation in their respective economies was dire and becoming direr. Furthermore, the data released during the course of the month of November revealed a further significant deterioration in the overall state of the global economy. Therefore, I reiterate what I said to the House yesterday. In the current circumstances it is not necessary for the government to contemplate that course of action. However, if the global financial crisis gets worse and puts the Australian economy more at risk, the government will take decisive action in the national interest including a temporary deficit to stimulate the economy, build infrastructure and support jobs and families. That is the responsible course of action for the future, should it become necessary.

The alternative is to sit around and simply allow jobs to be sacrificed as the global financial crisis unfolds. I would say to the House: our policy on this is clear. We have engaged in a process of fiscal stimulus, beginning with the Economic Stimulus Strategy of October releasing $10.4 billion, some one per cent of GDP. Secondly, we have added to that with further statements designed to provide support for aspects of the Australian economy, including a long-term plan to support the automobile industry in this country to the tune of $6.2 billion. Thirdly, we have indicated our support also for early local government activity in spending and investing in local government areas through the $300 million grant program which was announced by the Minister for Infrastructure, Transport, Regional Development and Local Government at the first meeting of the Australian Council of Local Government here in Canberra last week. The government remains prepared to take whatever further action is necessary to support growth, to support jobs and to support families.

That is our policy and it is clear: to support the economy, to support growth and to support jobs through the mechanisms I have just outlined and those which we stand ready to take into the future. The question which the House would like to have an answer to is: what is the alternative strategy? I have yet to hear any detail on that whatsoever.