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 outline recent global and domestic economic developments and the government’s response?

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

I thank the honourable member for her question because it reminds us of the global economic forces which are at work in Australia and across the various states of Australia as well. Before the Leader of the National Party interjects, I again draw his attention to something he has not yet responded to: do you support the remarks by Mr Springborg that the global financial crisis is peripheral to the state economy of Queensland? Do you support that? For the record, the Leader of the National Party and the Leader of the Liberal Party in this House are silent and refuse to endorse the remarks by the Leader of the Liberal National Party in Queensland.

When it comes to the ingredients of the global economic crisis, there has been further data released in the last 24 hours of which honourable members should be apprised. US stocks fell this week to their lowest level since 1996. This has erased 12 years of stock market gains. Furthermore, if you look at the US confidence indicators, the US Conference Board’s index of consumer confidence fell to its lowest level since data began in 1967. Of course, economic data continues to unfold from Europe as well. Industrial orders in the Euro area fell 5.2 per cent from November and 22 per cent on the year earlier. German business confidence fell dramatically in figures released overnight. The IFO Institute, in Munich, said its business survey had fallen to 82.6, from 83 in January, making for the worst reading since 1982.

These clear pieces of global economic data from the No. 1 economy in the world and the No. 3 economy in the world are of direct relevance to what happens in this economy as well. They are of direct relevance also to what happens in the Queensland economy. Therefore, the challenge facing the House is the strategy which we are prepared to embark upon in this country to reduce the impact of these global economic forces. Our response in this country is clear: when it comes to fiscal stimulus, that which we have announced, against that which has been embraced in other countries, is in fact relatively small. Look, for example, at the United States and President Obama’s fiscal stimulus package of 6.9 per cent of GDP, or $787 billion. I quote Fed chairman Bernanke, who said:

To break the adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilise financial institutions and financial markets.

A combination of fiscal stimulus through budget action on the one hand and continued action to stabilise financial markets on the other is the way all governments around the world at present are seeking to deal with this problem, which has been visited upon our shores as well. What we know for sure is this: more jobs will be lost in Australia if no action is taken by government to support growth and to support jobs in the economy. That is an absolute, clear-cut fact. There again I return to the clear contrast between the two of us, government and opposition. You either have an economic strategy, as the government does, to see Australia through this global economic crisis—that is our approach—or the alternative, from the Liberal and National parties, which is a political strategy to seek to take political advantage of this global crisis. It is almost as if each time job losses are announced in this country you can hear the champagne corks pop in the Liberal and National parties’ party room.