Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister update the House on recently released reports on the Australian economy? Will the Prime Minister compare the performance of the Australian economy through the global recession relative to other countries?

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

I thank the honourable member for Solomon for his question, because the Northern Territory and Darwin, being export oriented, are directly affected by the impacts of the global recession on growth and on jobs—therefore his community, like those across the entire nation, is deeply concerned by what actions can be taken to reduce the impact of this recession.

The current global economic recession is the worst set of economic circumstances Australia has faced in three-quarters of a century. And Australia, despite this challenge, is doing better than most other economies. Last night two key international economic reports were released—firstly, the latest Economic Outlook from the OECD and, secondly, the IMF’s Australia 2009 Article IV Consultation Concluding Statement. These reports indicate that the Australian government’s early and decisive action concerning the economy helped cushion the Australian economy from the worst impacts of this global recession.

Furthermore, what these reports and other data underpin are the following four propositions. We currently, among the major advanced economies, have the fastest growth. We also have the second lowest unemployment. We have the lowest debt. We also have the lowest deficit.

That is where we stand—on the basis of this most recently released data—against the major advanced economies. On the fastest growth, the OECD still projects that Australia’s economy will contract by 0.4 per cent in 2009. This is the mildest contraction of any of the 30 OECD economies and compares with contractions of 2.8 per cent in the US, 6.8 per cent in Japan and 4.8 per cent in the euro area. This confirms the information from Australia’s own national accounts that Australia is the fastest growing economy in the OECD.

We also have the second lowest unemployment. The OECD forecasts that unemployment in Australia will rise to 7.9 per cent by the end of 2010. This is substantially lower than the 9.9 per cent predicted for the OECD as a whole. This is the second lowest of any of the major advanced economies. I would say again that any job lost is one lost job too many. This government will continue to inject every effort into supporting employment at a time of grave global economic difficulty.

In terms of the state of deficit across the major advanced economies, the OECD forecasts Australia’s budget deficit for all levels of government to reach five per cent of GDP in 2010. This is nearly 60 per cent lower than the 8.8 per cent of GDP deficit for the OECD as a whole. Again, it is the lowest of all the major advanced economies. Also, we know from other data that Australia’s debt is the lowest of all the major advanced economies. The OECD itself says:

The infrastructure development program announced in the 2009-10 budget is welcome and should strengthen fiscal policy impact.

The OECD report also notes that we are by no means out of the woods yet. The OECD warns that the ensuing recovery is likely to be both weak and fragile for some time and that the negative economic and social consequences of the crisis will be long lasting. Furthermore, it has stressed the importance of governments implementing stimulus measures promptly and fully. It says:

Because of the weakness of the expected recovery, the OECD argues that governments need to implement announced stimulus measures promptly and fully. These tax breaks or spending measures should not be withdrawn at a pace which jeopardizes the recovery. Similarly, better regulation of financial markets to guard against future crises is now urgent.

This is the government’s strategy. It is nation-building for recovery. It has been shown by the data which has come in from the OECD, the IMF and, most recently, our national accounts that it is having an effect—that is, we have managed so far to avoid a technical recession. We are not out of the woods yet. We also have the fastest growth of the major advanced economies—and the fastest growth of all the advanced economies, as released most recently in other documents.

Part of the reason this has been possible is that we the government, in partnership with state and local governments, believe that it is important for us all to act together, because we are all in this together. That is why I particularly welcome the representatives of most of our 565 councils and shires who are here in Canberra today for the second Australian Council of Local Government meeting.

The reason I say this is that the councils represented here today have been in the business of nation building for recovery. Through initiatives announced by the Minister for Infrastructure, Transport, Regional Development and Local Government we have had an $800 million investment in community infrastructure projects. And I am advised that some 3,300 of these projects are rolling out across the country. More than 100 community projects have already been completed, thanks to the Regional and Local Community Infrastructure Program. I am advised that this includes such projects as the new spectator facilities and change rooms at the Renmark oval in South Australia, which received investment of $374,000; the new kitchen that has been installed at the Conargo Memorial Hall, in regional New South Wales, with $40,000 from the government; and the city of Kalgoorlie-Boulder, in Western Australia, using part of its funding to upgrade the war memorial. These are just a few of the projects from the many thousands of projects in which 500 or so local governments are now participating with the Australian government in supporting across the nation.

I formally today as Prime Minister of the country publicly salute the critical role of local government in being partners in Australia’s nation building for recovery plan. Local government, together with other levels of government, are doing their bit to pitch in to make a difference. That is what is important here. They believe that governments should be in the business of performing a positive role, they should be in the business of performing a constructive role, they should be in the business of building the nation up, not talking it down. Whatever our politics may be, in each of the elected councils attending this conference here in Canberra today the unifying mission is this: what difference can we make to build this economy up when the global economic recession is seeking to tear it down? We are all in this together, and I salute the role of Australian local governments here in this building today.