Mark Arbib (NSW, Australian Labor Party) Share this | Hansard source

This ideology is important today to how both sides of the chamber are approaching the economic crisis. We all know that this is a crisis that started in the United States with the subprime loans, CDOs and the market derivatives. We all know greed and market capitalism got out of control. There was inadequate regulation in the marketplace and inadequate regulation of public and private bodies, and the result was an economic crisis. As a result this banking liquidity crisis has now become much more serious. In the last three or four months we have seen a banking crisis become a global recession. For Australia things have also become much more serious. Six out of our 10 top trading partners are now in recession. China, our largest partner, making up 15 per cent of our exports, has issued data to show that its growth is going to be cut in half. Japan, our second largest trading partner, is now in recession and is talking about two years just to get out of recession.

Over the last two days the Treasurer and the Prime Minister have been outlining the effect that the global recession will have on our economy. One hundred and fifteen billion dollars has been taken out of government revenue and there is huge pressure on our budget. There are two ways governments can deal with a problem like this. On the opposition side of the chamber it is an easy solution. Do nothing and let the market sort the problem out. Let people suffer until it works its way through the system. Let the scavenger funds go out and pick up a cheap bargain, a cheap property or a portfolio, because that is how the market works.

That is not the Labor way. That is not what we believe in. We are going to intervene in the economy and intervene in the marketplace to ensure that the country has the stimulus it needs to create growth. Today’s $42 billion package is a commitment to taking the action that this country needs to support jobs. We talk a lot about economic figures and we debate theories in here, but in the end a global recession has a huge influence on the livelihoods of everyday Australians. People are going to lose their jobs, people are going to lose their homes and small businesses are going to close.

In relation to the package today I think it has gone down brilliantly. For what we can expect, do not listen to me; let us listen to the experts. Macquarie senior economist Brian Redican today said:

It’s much bigger than most people expected.

It looks like they are bringing forward infrastructure spending to make it more timely and the fact they are forecasting big deficits for 2009/10 and 2010/11 means they are serious about doing all they can to support the economy.

Listen to ICAP senior economist Adam Carr:

It’s a pretty decent package. When you look at monetary and fiscal stimulus, one can only assume that inflation pressures are going to build through the economy and any talk of deflation is preposterous.

The government has a very powerful influence over the economy. If they choose to spend such a large amount, it will provide employment, it will get money flowing through the economy and it will increase GDP.

This is what the experts are saying and the same was said by the Commonwealth Bank. And it is not just the government; today the Reserve Bank also acted and cut interest rates by one per cent to help families and mortgage holders. (Time expired)