Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline to the House the estimated cost to the economy and the budget of not acting to support up to 210,000 jobs?

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

I thank the member for Forde for his very important question. It is the case that the No. 1 priority of the government is jobs—to support Australian jobs in the face of this most savage global recession. Of course, the economic stimulus that we have put in place is expected to reduce the forecast peak in the unemployment rate by 1½ percentage points and it will support up to 210,000 more jobs over the period ahead. That is something the government is very proud of. It is important for us to invest in nation-building infrastructure, to support employment and to support business given the fact that there is a withdrawal of private investment and given the collapse in the terms of trade—the dramatic reduction in national income. All of those reasons make it very important that our stimulus, through phase 1, phase 2 and phase 3, continues. That means we do need to borrow responsibly to support employment and to support Australian businesses. The fact that 210,000 Australian families with breadwinners benefit from that is very important. We should not underestimate the cost to the economy if the unemployment rate were to go up even higher.

Treasury estimate that, without economic stimulus, total employee incomes over the next decade would be around $100 billion lower. As a result, budget revenues from less income tax alone would be about $23 billion lower. Of course, spending on unemployment benefits would be about $4 billion higher over the next four years and of course the number of long-term unemployed would be higher. All of those things come at a tremendous cost to the economy.

But, in this discussion about stimulus and what it does, we should also focus on the human cost of unemployment—what cost is passed on to the economy through the break-up of families and through the impact on local communities. Every job lost is one too many, which is why the government is so determined to put in place its economic stimulus to support employment and to support businesses. We have heard in the House, particularly from the Deputy Prime Minister earlier, just how important the investment is in schools and just how important the investment is in social housing, in clean energy and so on—to support employment while at the same time leaving a lasting legacy for the country. This government is absolutely determined to be on the front foot, to put in place positive plans for the future so that it can support employment and make our economy and country a far better place.