Belinda Neal (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Human Services and the Minister for Financial Services, Superannuation and Corporate Law. What role has the government stimulus package played in supporting investor confidence in the Australian economy? Why is it important that the government stimulus package remains in place and what risks are there to this not occurring?

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

I thank the honourable member for her question. The government stimulus package has helped employment and economic growth in the most difficult economic environment we have faced since the Great Depression. Important in this is consumer and investor confidence. The House will recall the numerous guest lectures from the Leader of the Opposition about the importance of consumer and investor confidence when confidence was falling. He has been strangely silent on this issue more recently and I cannot think why that might be the case. It might be because consumer confidence in Australia has increased by 46 per cent since October 2008, prior to the announcement of the government’s first fiscal stimulus package. This compares to an increase around the world and the OECD of two per cent over the same period.

Today I can inform the House of indicators of investor confidence that are also responding to Australia’s economic performance and the government stimulus package. The Investment and Financial Services Association today released the Quarterly Investor Sentiment Research Report, a survey taken across 700 different investors. In the first quarter of this year the index stood at minus 22.3 per cent. It now stands at positive five per cent for the third quarter.

It would be foolish for anyone to declare victory in the war against the economic crisis. It would be foolish and negligent in the extreme to declare that we can pull the rug from underneath the recovery and withdraw the stimulus. There are significant challenges that lie ahead, and these are underlined in some data out today. The housing finance figures and the retail trade figures out today indicate that there are still very significant challenges ahead for the Australian economy. To keep the unemployment rate steady it is necessary to create around 20,000 jobs per month and grow the economy at around three per cent a year—a huge challenge in this international environment. This underlines the need for the stimulus package to remain in place.

To declare victory and withdraw the stimulus is actually to concede defeat on unemployment, to say 0.6 per cent growth is enough, consigning thousands of Australians to an unemployment rate higher than that which is unavoidable. This is not just the government’s view; this is also the view of the Australian Chamber of Commerce and Industry, not an organisation necessarily famous for supporting government intervention. Yesterday the chief executive of ACCI said:

… there are considerable downside risks to any sudden or immediate withdrawal of the economic stimulus measures.

That recovery is not yet here. Therefore, those economic stimulus measures need to be maintained.

Perhaps it has been said best by Craig James, the chief economist with CommSec, who said:

The stimulus put in place by government spending and low interest rates has certainly done the trick of insulating the economy from global doom, but it is too early to declare victory.

While Australia is doing better than any other developed economy, we are still well below where the government would want to be and where as a nation we need to be in relation to long-term trend growth. It is far too early to declare victory in the fight to support jobs and economic growth.

I was very interested to hear the Leader of the Opposition declaring victory on the economic front. He is a bit like an armchair general a thousand miles behind the front line: he has opposed all previous attacks for the economy and now he declares victory. ‘We’ve won,’ he says, when he did not turn up to the battle. He says, ‘It’s all over; the war’s over.’ The Leader of the Opposition and the shadow Treasurer are engaged in a very tricky political manoeuvre. I like to call it the reverse ‘I told you so’. They have gone from arguing that the stimulus would never work to arguing that it has worked too well and now must be withdrawn. These guys make Janus look consistent. They lurch from saying, ‘Why isn’t the government acting?’ to ‘Why is the government acting?’ They go from saying, ‘The economy will be unaffected by the stimulus’ to ‘The stimulus is overheating the economy.’ They go from beating their chests and saying, ‘We’ll have nothing to do with this deficit-financed investment,’ to saying, ‘Where do we get the invitation to the library opening?’ They go from saying, ‘This will all overheat the economy,’ to saying, ‘Make sure you get my good side at the photo opportunity at the opening.’ They go from the ridiculous to the sublime, and today we saw the worst of it, with the revelation of the Robert doctrine, which says—

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. I refer to standing order 104 on relevance.

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

The minister is responding to the question. The minister should commence to conclude his answer.

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

I do tend to agree that the member for Fadden is normally irrelevant, but he is relevant today because we see the Robert doctrine, which says, ‘If you cannot find a fact to support your argument, just make one up.’

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

Order! The minister is in continuation, but he should conclude his answer.

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

Those opposite should start voting and talking the way they position themselves at infrastructure photo shoots—that is, in support of the government’s stimulus package, continuing to support jobs and, most importantly, underwriting our continued economic recovery.