House debates
Wednesday, 4 February 2009
Questions without Notice
Economy
2:28 pm
Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source
My question is to the Treasurer. Will the Treasurer update the House on the retail trade figures released this morning and their implications?
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
The Nation Building and Jobs Plan that we announced yesterday and, of course, the Economic Security Strategy that we put in place last October do demonstrate how Australia can get through this global recession in better shape than most other advanced economies, because we can use our strengths in fiscal policy and monetary policy to stimulate demand in this economy and to support jobs. That is precisely what we are doing, and that was precisely the intention of the Economic Security Strategy last October. If these retail trade figures today demonstrate anything, they demonstrate how out of touch the Leader of the Opposition and his entire frontbench are with what is actually happening in Australia, because, contrary to the Orwellian language of the Leader of the Opposition earlier, what these retail trade figures show is that the Economic Security Strategy gave a significant boost to demand in December last year, supporting employment, particularly in the retail sector. The December retail trade figures show that retail sales increased by 3.8 per cent in December. You know, that is the biggest monthly increase since August 2000.
Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source
Mr Laming interjecting
Harry JenkinsWayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
But consider the backdrop to this, because it goes to the core of the inaccuracy of what the opposition has been saying in this place over the last 48 hours.
Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source
Mr Laming interjecting
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
The backdrop to this is, in December, the sharpest contraction in global demand seen in the history of the modern market economy. In other countries around the world, what you saw were substantial falls in retail sales. If you go through them, in the US retail sales fell by 2.7 per cent in the month of December, in Japan sales fell by two per cent in December, in Germany they fell by 1.2 per cent and in the UK they fell by one per cent.
It is also instructive to look at the data as to where the sales were biggest or where they increased the most, because there is this allegation from the other side that Australian families are out there wasting it; that is the implication of what they are saying. Let us just look at where it was spent: department stores had an increase of 8.3 per cent; clothing, 5.8 per cent—
Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source
Mr Laming interjecting
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
and other household goods, 9.9 per cent. This is occurring in the midst of the carnage on global stock markets and the collapse in demand and growth right around the world. This is a very substantial achievement, and it has been a very big boost to employment in this economy at a critical time for so many Australian families. I would say it certainly demonstrates the wisdom of the government’s approach in targeting our assistance, particularly to those who are credit constrained and who are on lower incomes, and it demonstrates why most of the economists around the world and most of the official bodies back our view that making these payments to people who are credit constrained and on lower incomes, and doing it in a lump sum, works. It works. Of course, we get this from the IMF most particularly. Just look at what John Lipsky had to say on 17 November—he is the deputy chief of the IMF, the former chief economist. He said:
For example, measures to support low-income households would be particularly helpful in boosting demand, and would be targeted at those most in need.
You can even go to the Business Council of Australia and their budget submission, and I could go on and on—
Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source
Mr Laming interjecting
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
quoting economists around the world, including Nobel laureates, who provide a very sensible source of advice which common sense tells you is correct: if you target your support at those who need the assistance most then their propensity to spend will be highest. Of course, that is the orthodox position. It is not the position, of course, articulated by the Leader of the Opposition or by the Deputy Leader of the Opposition. It now brings us to this point, and it is very important to consider it in this light: by refusing to support the package that we have brought forward and by being so critical of the consumption measures that we have put in this package, if they were successful in their endeavours, they would leave a gaping hole in our economic defences against the contraction in demand that is occurring on a global basis. This government does not intend that to happen. We are intent on putting in place this jobs plan—this package to support employment in the Australian economy for Australians right now—and anyone who will not support it is simply supporting higher unemployment and is utterly irresponsible.