Amanda Rishworth (Kingston, 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 the OECD’s report on unemployment around the world? How does the OECD’s characterisation of the impact of Australia’s economic policies differ from other characterisations?

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

I thank the member for Kingston for her question. Yesterday the OECD released a report on the employment outlook for 2009, and it makes for sobering reading for the global economy, particularly on employment. It says that OECD economies are facing a jobs crisis, and goes on to note that 15 million people have joined the ranks of the unemployed across the developed economies since the end of 2007. It says specifically that the experience of previous severe economic downturns suggest that unemployment will continue to rise for some time, even after the recovery begins, and that it will take a long time to re-absorb the upsurge in unemployment.

The OECD forecasts unemployment reaching nearly 10 per cent by the end of 2010 across the developed economies. If those projections are realised, that will mean that unemployment will have risen by some 25 million across the developed economies since the beginning of this crisis. It is a sobering reminder as to who pays the price in a global financial crisis. When you have unrestrained greed and unregulated financial markets, those who pay the price are working families everywhere.

The OECD indicates that stimulus has had an important impact on the macroeconomic response to this crisis worldwide. It says:

Job losses would be significantly larger if vigorous macroeconomic measures had not been taken.

Indeed, it is estimated that the OECD area employment will be 0.8 per cent to 1.4 per cent higher in 2010 than would have been the case had national governments not adopted sizeable, fiscal stimulus packages. The OECD also says that the Australian stimulus has been particularly effective in saving jobs. It says:

Even though many countries moved quickly to enact large fiscal stimulus packages, these packages generally have not had a strong effect in cushioning the initial decline in employment caused by the crisis, although Australia is a notable exception.

So says the OECD in its reflections on developed economies everywhere. It goes on to say:

Australia’s fiscal stimulus package seems to have had a strong effect in cushioning the decline in employment caused by the global economic downturn.

In particular, the OECD suggests the jobs impact in 2010 of Australia’s fiscal stimulus package will be 1.4 to 1.9 per cent. This is around 200,000 jobs—confirming, therefore, Treasury’s analysis.

The OECD’s conclusions on this matter stand in stark contrast to the observations which have been made from time to time by those opposite about the impact of economic stimulus and fiscal stimulus on the real economy. The Leader of the Opposition has criticised the government’s stimulus package for ‘not creating one job’—that is what he said. He has also said of the stimulus package: ‘No discernible impact on our economy’; ‘It hasn’t created a job’; and ‘It hasn’t stopped us from going backwards in terms of economic growth.’

However, with the production of this most recent report, the opposition did have a chance to rise to the occasion and to help build the Australian economy up rather than simply continue to talk it down. But they chose instead to continue to talk the economy down. When the Leader of the Opposition was asked this morning on this question about the conclusions of the OECD report on stimulus and what it had to say about Australia, he had this to say: ‘Well, it’s only a very little report. The OECD has not taken into account a number of factors in that very short little paper.’

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Two pages! You are being sloppy again! You are lying!

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

This report is 300 pages, Joe. That is a 300-page analysis of the global economy. We are one member of the OECD. This is an analysis of the global economy and this is that very short little paper to which he alludes.

The Australian government has, through its stimulus strategy, sought to build up the entire economy. We have therefore, as a consequence of our actions and the engagement of the entire Australian economy, produced one which among the major advanced economies is the fastest growing. We have the second lowest unemployment, the lowest debt and the lowest deficit, and we are the only one not to have gone into recession. This is not, however, the time for complacency. We have challenges ahead to build long-term productivity growth for the Australian economy for the recovery and, on top of that, to engage our colleagues in the G20 with the long-term task of medium-term exit from these extraordinary stimulus measures and building long-term sustainable economic growth. That is the government’s strategy. I would encourage those opposite to get on board and help build the Australian economy up.