Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank Senator Abetz. The government will do everything possible in these difficult global conditions to support both growth and the surplus. As global conditions deteriorate, that task will become tougher and tougher. As I noted yesterday, already a number of developed economies, including the US, the UK, Japan, France, Italy and Germany, have forecast a deficit and negative growth for 2009. And the OECD’s latest economic outlook report provides yet another sobering assessment of the difficult global conditions that we face and the impacts the global financial crisis is having on advanced economies everywhere.

If global conditions continue to worsen, there will be a further slowing of growth and a further impact on budget revenues. If that slowing occurs, we have said it would be the responsible thing to draw down further on the surplus and, if necessary, use a temporary deficit to invest in the economy. Any such action would be temporary and consistent with the budget discipline of maintaining a surplus across the economic cycle. This cycle takes into account times when the economy is strong and times when it is confronting serious challenges like those we are now facing in the global economy. The length of the cycle will depend on the types of shocks that are buffeting the economy. (Time expired)