Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the ongoing economic challenges Australia faces and what it will take to meet them?

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

I thank the member for Chisholm for her question, because Australia is performing well at the moment in what is a very difficult global environment, and it is certainly very clear that our stimulus is having a significant beneficial effect on the economy. You can see it in terms of retail sales, up 5.2 per cent since November last year. You can see it in the forward indicators in the housing market. You can see it in the consumer confidence figures, up 27.8 per cent in the last three months alone and the highest since the series began in 1975. But of course you can also still see the weakness in the global economy, and, as Governor Stevens said last week:

The global economy could suffer another setback of some kind. We think the likelihood of that has declined, but the possibility nonetheless remains.

We had the statement from the Treasury secretary yesterday where he made the point that the rest of the world is not out of the woods and it is possible that there will be a second shockwave.

These are timely reminders that global economic conditions remain volatile, and it is not easy to predict the path to recovery. Of course, that is why the government’s stimulus has been so instrumental in providing support to our economy at a time of global weakness. The governor and others have supported that proposition. The governor had this to say last week:

… fiscal measures have supported demand …

Dr Henry has made the point that it is reasonable to conclude the cash payments did succeed in supporting the economy. But, of course, the challenges do remain. The challenges remain in terms of the reduction in the terms of trade. The challenges remain in terms of a reduction in business investment. And all of this points to the importance of our economic stimulus and, most particularly points to phase 2 and phase 3, and their importance over the next year and the year after that.

But, of course, just about everybody in Australia knows that the economic stimulus is working, everybody knows the job is not finished and everybody knows there are still challenges ahead—that is, of course, except those who sit opposite. Everybody else can get on and work with the government on the very big task of supporting employment, the very big task of supporting small business and the very big task of supporting employment in those small businesses—something that is not understood by those opposite, because what we have had is just another monumental misjudgment from this Leader of the Opposition and the shadow Treasurer in opposing the stimulus. They have turned that misjudgment into an art form. So people are entitled to question their motives when they have been so spectacularly wrong about what has been going on in our economy. Given that history, nobody will believe their desperate fear campaigns.