Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the outlook for the global economy and the government’s efforts to cushion the impact of the global recession on the Australian economy?

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

I thank the member for Petrie for her question, because we have received further news today about the savage consequences of the global recession and its impact on both developed economies and developing countries. We have a further report today from the World Bank that has downgraded its outlook for the global economy. It now expects global output to shrink by 1.7 per cent in 2009. That is more than the World Bank expected just three months ago. It is the case that the major advanced economies are in deep recession, with the World Bank forecasting the US to contract by three per cent in 2009, the Euro area by 4.5 per cent and Japan by a massive 6.8 per cent. This report from the World Bank illustrates the difficult year ahead for the global economy, but I think it also demonstrates the importance of global action in the face of this global recession. The report makes this point:

Extraordinary policy responses by governments around the world have helped save the global financial system from systemic collapse.

It goes on to say that these actions, combined with fiscal stimulus, will ‘help reduce the depth and prospective length of the global recession’. Despite the worst global recession in 75 years, Australia is weathering the storm better than virtually every other advanced economy. That is because the government acted decisively and early to shore up confidence in our financial system and to stimulate the economy to support jobs. You could not get a better example of that than the initiative that we took with OzCar, the bank guarantee and also economic stimulus phase 1, phase 2 and phase 3, because we understand the importance of cushioning our economy from the worst impacts of the global recession. I think we can take some heart from the fact that the combination of our resilience and policy action has allowed Australia to have the strongest-performing economy in the developed world. That is the concern of the government; it is certainly not the concern of the rabble opposite.