Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Hansard source

I thank Senator Sterle for the question because the government acknowledges that the events overnight have reinforced the concern about global economic conditions and the pressure that that will place on the Australian economy as well as on all other nations’ economies. As we know, these events have had their origin in the US subprime market problems of some time ago. But the overnight filing of bankruptcy by Lehman Brothers reinforces how serious this situation is, and there are a range of other companies that seem to be under enormous pressure. We know that Australia will not be immune from these pressures.

We confront very difficult times. Global stock markets have fallen by around 20 per cent since the turmoil began; consumer confidence across the OECD economies has fallen to its lowest point in 30 years. So it is not a question of this government talking down confidence. This is a worldwide reality. Five of the world’s seven largest developed economies recorded zero or negative growth in the three months to June this year. All the economies of this world are facing tough economic conditions and we are no different. But we are confident that with the right policy settings Australia will come through these difficult times in a stronger position than other economies.

The global credit crunch and oil price shock have buffeted confidence in share markets, and there is slowing global growth. Despite all this, we think there is cause for optimism in Australia. We have a very strong surplus, record terms of trade and businesses that are investing in the future with confidence. As the Australian government, we are focusing on the things that we think we can influence. We have built a strong surplus—for good reason. We say the surplus that the opposition say is too large is absolutely necessary to help buffer us against these global pressures and give us the flexibility we need to meet today’s challenges.

We make no apology. We think the surplus that we delivered in our first budget is absolutely necessary to protect Australian families, Australian pensioners and Australian people generally from these pressures. We made room in the budget, though, to deliver support to those families with the $46 billion in tax cuts and the additional support for carers and seniors. We laid the foundation for $40 billion of responsible investment in nation building and growth for the future. We are still investing in our capacity and investing in our growth for the future as well as providing that relief for families.

There are some encouraging signs. The recent unemployment figures were encouraging. You do not want to set too much store by one month’s numbers, but unemployment fell to 4.1 per cent and that was obviously good news. We know that 159,000 jobs have been created since November 2007, almost 55,000 in the last three months. We think there is some room for optimism despite these pressures.

What is clear, though, is that we need a strong surplus to help buffer the economy against these international forces. We need a strong surplus. That is why we delivered a $22 billion surplus. I would urge the opposition and minor parties and Independents to support our budget, to support the surplus and to help us to protect Australian families against the problems that are confronting us from international pressures. Help us deliver the surplus that will put downward pressure on inflation and downward pressure on interest rates. (Time expired)