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

My question is addressed to the Prime Minister. I refer the Prime Minister to today’s news that unemployment has reached a four-year high, with nearly 600,000 Australians out of work; that another $26 billion is to be borrowed to fund his misconceived Ruddbank venture; and that a fourfold increase in the number of days lost to industrial disputes was recorded in the first year of his government. What does the Prime Minister have to say to working families now that he has delivered this terrible trifecta of higher unemployment, higher debt and more strikes? How much closer are we to the Rudd recession?

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

As the head of the IMF said yesterday, we are confronted with a global economic recession. A term which he has used to describe it is ‘the great recession’, from which no nation—including Australia—is immune, as reflected in the increase in unemployment in the numbers produced today. From the government’s perspective, the loss of any job in Australia is the loss of one job too many. We do know that, had the government sat back and done nothing and just watched, the unemployment numbers produced today would be much worse.

I also say to the Leader of the Opposition that, while it may not fit his political script, the unemployment numbers across the rest of the world today bear some taking into account. Across the OECD, the 30-member Organisation for Economic Cooperation and Development, the January unemployment figure was 6.9 per cent. Of the major seven economies in the world—the G7—it was 6.8 per cent, in the European Union it was 7.6 per cent and in the euro area it was 8.2 per cent. If you go to individual economies, the unemployment rate in Canada was 7.2 per cent, in Germany it was 7.3 per cent and in the Irish Republic it was 8.8 per cent. If you turn to other economies, the United Kingdom was 6.3 per cent, as most recently produced, and the United States was 7.6 per cent.

I draw the honourable member’s attention to the fact that this is a global economic recession with implications for economies right across the world. If the honourable member were to pay attention to those individual unemployment numbers from each of the major economies around the world, he would see that Australia’s economic stimulus strategy is having an effect in reducing the overall impact of the global recession on Australia. As I have said to this House on a number of occasions, no government can stop a global economic cyclone from coming across our shores, but a responsible government seeks to reduce the impact of that damage on Australia’s workers, Australian businesses and Australian families. That is the responsible course of action. The alternative course of action is to sit, wait and see, and do nothing. That is what is being recommended by those opposite.

Kerry Rea (Bonner, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister update the parliament on developments in the global economy and its impact on unemployment in Australia?

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

I thank the honourable member for Bonner for her question. If we look at the release of further economic data from around the world, it paints a fuller picture of the extent of the global economic recession and the contributing elements to it. Yesterday it was announced that China’s trade surplus narrowed to $4.8 billion in February, approximately one-eighth of the previous month’s surplus.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

What about Australia?

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

In 2007-08, China was Australia’s largest trading partner and Australia’s second largest export partner behind Japan. The shadow Treasurer interjected before, ‘What about Australia?’ If I am talking about the state of the Chinese economy and the state of Chinese demand for imports from around the world, and if Australia has as its second largest export market the People’s Republic of China, I would have thought that even the shadow Treasurer could have concluded it was of some material relevance to jobs in Australia. But, again, that does not suit his political strategy.

Service exports to Australia have grown at around 26 per cent since the start of the decade, as one simple indication of the significance of the Chinese economy to employment in our country. Furthermore, we have seen reports of a fall in Australia’s thermal coal prices, with prices down 44 per cent on last year. Again, I would draw the shadow Treasurer’s attention—given that he regards this matter as irrelevant to jobs in Australia—to the following possibility: as a result of that, earnings from coal and iron exports could decline by up to $35 billion from 2008-09 to 2009-10. That is sucking out $35 billion from the Australian economy. Therefore, you are faced with a very clear alternative: either you sit back, watch, wait and see, do nothing and seek to take political advantage from a global economic crisis—which is the political strategy of those opposite—or you engage in an economic strategy to reduce the impact on Australia. This government’s resolve is to engage in such a strategy.

Of course, other governments around the world are engaged in similar strategies. Again, I would draw the House’s attention to the statement on Thursday of last week by the Chinese government that it had announced a projected deficit in its budget of 950 billion renminbi for 2009, a deficit of some three per cent of GDP for 2008. This is the highest fiscal deficit since 1979, including the deficit following the Asian financial crisis.

These are the global economic realities with which every government around the world, including Australia, has to contend. Our strategy is straightforward: firstly, to stabilise Australian financial markets through the provision of our bank guarantees; secondly, the immediate stimulus through the provision of payments to pensioners, carers, farmers and others who need support, and through that the provision of support for the retail sector in Australia and the 1.5 million Australians who are employed in the retail sector; and, thirdly, longer term economic stimulus. That is the government’s strategy; that is the one that we are embarked upon.

I would simply say this to those opposite as they ask one politically driven set of questions after another: why do they have any problem with such a basic proposition that, as the rest of the world goes into recession, Australia is somehow not immune from world events, that it will affect Australia? Believe me, it will. How could they possibly disagree with a basic proposition like that? There will be an impact here in Australia and there will be an impact around the world. Therefore, that underpins the necessity for us prosecuting a strategy to deal with these circumstances.

In recent times we had a statement to this effect—and I quote the member for Higgins because he is a person of some relevance to recent debates within the Liberal Party. In 2002, the member for Higgins said:

But the idea that somehow Australia is immune from world events, that the rest of the world can go into recession and it won’t affect Australia, believe me it does.

That was the member for Higgins as Treasurer of Australia in 2002. Let us just look at what was happening in the world in 2002. What was world growth in 2002 when the member for Higgins was Treasurer and saying that Australia could not be immune from world events as the rest of the world goes into recession? World growth was 2.8 per cent in 2002 whereas, today, according to the IMF and the World Bank, growth in the world will be less than zero.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. In terms of the management of the House, yesterday the Prime Minister broke his own world record on the length of his answers—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Sturt will resume his seat.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

by his12 minutes and nine seconds answer to a question—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Sturt will resume his seat.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Pyne interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Sturt is warned!

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

It seems that the member for Sturt and all those opposite are simply provoked by a presentation of the truth, because the truth to which I refer was uttered by none other than the member for Higgins, the Leader of the Opposition in waiting. In the events of 2002, the member for Higgins said that Australia could not be immune from global economic developments as the world goes into a recession. He said so when global growth was at 2.8 per cent. These days, it is running at less than zero, according to the World Bank. He said so when US GDP growth was running at 1.3 per cent in the June quarter of 2002. US GDP growth is now running at minus 1.6 per cent. He said so when unemployment in the United States was running at 5.8 per cent in May 2002. These days, it is running at 8.1 per cent.

Under those circumstances, which were considerably less stressed globally than they are today, the member for Higgins, on behalf of the Liberal government at the time, said, ‘The idea that Australia was somehow immune from these world events, that is just fanciful.’ I would draw those opposite to a close and careful study of the member for Higgins’ observations in times when we did not have a synchronised global economic recession, the great recession which we are now presented with the challenge to deal with. This government is getting on with the job. We have a strategy in place to reduce the impact on Australia. Those opposite have a political strategy, instead, just to take political advantage from the crisis. The contrast to the Australian people is absolutely clear.

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 the Prime Minister to a comment he made on 14 October 2007 and I quote:

When it comes to an unemployment number with a three in front of it, we believe that is a right goal for Australia too.

How will the Prime Minister reduce the unemployment rate from 5.2 per cent to a number with a three in front of it, or is high unemployment the inevitable outcome of the rising risk of the Rudd recession?

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

It is good to see that the Liberal Party focus groups have been at work, as they seek to again take political advantage of the global economic crisis when the government is seeking to implement an economic strategy to reduce the impact of that crisis on Australia. I would say to those opposite: reflect on the unemployment numbers in every significant economy in Europe that I referred to before. I would also say to those opposite: when it comes to dealing with the challenge of unemployment, you can either engage in the political rhetoric to which those opposite are now committed or you can get on with the job of doing something about it.

This government has a clear-cut economic strategy. Firstly, we have sought to stabilise domestic financial markets by providing a guarantee to all Australian deposit holders, despite the fact that those opposite refused to provide such a guarantee, despite having received warnings over multiple years to do so. Secondly, we have provided direct stimulus to the Australian economy which has been supported by every peak business organisation in the country. The only organisation opposed to it is the Liberal Party. Thirdly, we are engaged in the direct implementation of short-term infrastructure building—in schools, in housing as well as energy efficiency in Australian owner-occupied dwellings. Those opposite, it seems, stand opposed.

What continues to stun me is this: when this government implemented its economic stimulus strategy last October, the strategy which the Leader of the Opposition, or the temporary Leader of the Opposition, said that he supported at the time, for reasons of absolute political convenience, three months later, he turns around and says that he opposed it all the time. Well, I would say this to the Leader of the Opposition: one thing people require in politics, one thing people require when faced with a genuine threat to Australia’s national economic self-interest, is consistency of policy and consistency of approach. On these things, we cannot see a skerrick of evidence on the part of the Liberal leader.