Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline to the House why it is so important that the Reserve Bank and the government have been working together to cushion Australia from the full force of the global recession?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Calwell for her question. It is very important that fiscal and monetary policies do work together to stimulate our economy, to support vital employment in the economy, to support the business community and to support the rural community. Indeed it is doing that. We had the statement today from the Reserve Bank that they have decided to keep official interest rates unchanged at three per cent—the lowest in almost 50 years. This follows rate cuts totalling 4.25 per cent since September last year. That has seen the standard variable home mortgage interest rate fall to 5¾ per cent, which is delivering savings of $750 per month to a family with a $300,000 mortgage. Lower interest rates, combined with the government’s stimulus, are helping to cushion Australians from the very worst of the global recession. I will quote from the statement from the Reserve Bank today. The statement said:

Monetary policy has been eased significantly … Fiscal measures are also providing considerable support for demand.

So monetary policy is working with fiscal policy. Fiscal policy has been put in place in three waves: firstly, to support households; secondly, through shovel-ready investments in infrastructure projects right across the country; and, of course, the third phase was delivered in the budget, which is investing in the longer term nation-building infrastructure that those opposite oppose. As the Reserve Bank statement points out, this is very necessary because of the evidence occurring in the international economy, which is contracting, and has contracted sharply, particularly in the March quarter.

Last night we received further evidence of the impact of this global recession, with Canada reporting that its economy had contracted by a further 1.4 per cent in the March quarter—a very dramatic contraction for that country. This means that something like 19 of the 21 advanced economies have recorded growth outcomes which went backwards in the March quarter. That means that the March quarter was a particularly bad quarter internationally. It demonstrates the very strong case for the economic stimulus put in place by this government: responsible borrowing to support employment, to support Australian businesses and to support Australian families. That is the support that is required now, given the circumstances that have been imposed on this country by the rest of the world. It is absolutely incomprehensible that those opposite could sit in this House and oppose vital measures that support employment right across the community, that support demand and that support Australian businesses.

Louise Markus (Greenway, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Treasurer, isn’t it the case that within four years the annual cost of interest alone on Labor’s debt, at $7.6 billion, will be more than the total annual spending on veterans?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

It is the case that the government is borrowing responsibly to support employment in the Australian economy. It is now absolutely the case, and it has been demonstrated time and time again, that every one of those Australians who has been supported in employment are opposed by those opposite. This has been made very clear. Unemployment would have been much higher if it had not been for the responsible course of action this government embarked upon to support employment in the Australian community.

There is some discussion from those opposite about paying off debt. I can tell you one thing: all of those people out there with families are very appreciative of the fact that their families are in employment because we had the common sense to borrow and support employment and business in the Australian community. We have had the capacity to do so more than just about every other advanced economy in the world, and we have taken the responsible course of doing that to protect our communities. We understand the human cost of unemployment. We understand the economic cost of unemployment. We understand the social cost of unemployment.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order that goes to relevance. The Treasurer was asked about the interest bill of this irresponsible borrowing by this government.

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

The member for Dickson will resume his seat. The Treasurer will respond to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I was just explaining the case for responsible borrowing. Of course, those opposite want to pretend that if they were in government now they would not be borrowing for the $210 billion revenue collapse. They would not be borrowing for stimulus. The Leader of the Opposition was asked about this on the Insiders program on the weekend.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Speaker, I again raise a point of order on relevance. On two occasions you have sat the Treasurer down for being irrelevant and for refusing to answer the question. Could you direct him—

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

The Treasurer is responding to the question. I will be listening carefully.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Yes, Mr Speaker, it was a question about borrowing. It was a question about debt, and on the weekend the Leader of the Opposition was asked by Barrie Cassidy to give a precise idea about how much he would borrow. He said, ‘It isn’t possible.’ So the truth is, and we know it now, their debt would not be a cent less than ours and they would not pay it off a day earlier—or perhaps maybe by just a little, because Joe would just go for $25 billion less. This is a farce.

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

The Treasurer will bring his response to a conclusion.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

The truth is that those opposite are shameless opportunists who would happily watch Australians lose their jobs if it helped them politically.