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

I thank Senator Bishop for the question. The Treasurer today in the House outlined the crisis in Europe and talked about the increas­ing financial market volatility, which is undermining global confidence and weaken­ing global growth prospects, with Europe now expected to fall into recession this year. This has obviously been reflected in the IMF's downgrades to global growth, which echoed our own midyear update last November. The fact is that no country is immune from the fallout from the troubles in Europe.

Australians have every reason to be confident in our strong fundamentals, which make us better placed than most advanced economies to deal with global instability. We have an economy that is growing. There is solid growth, with the economy expected to grow at trend this year, over three per cent. We have low unemployment— almost half the rate seen in Europe—at 5.2 per cent. In the United States, it is 8.3 per cent. We have contained inflation. The cash rate is at 4.25 per cent, well below the rate left by John Howard and the coalition. We have an unprecedented investment pipeline, with $455 billion in resources alone. We have very low debt, peaking at 8.9 per cent compared to 92.9 per cent for advanced economies. Also, we have a AAA credit rating from all three rating agencies for the first time in our country's history.

Because of this great strength, we are determined to ensure the budget gets back into surplus. We are working hard at it. We are holding real growth in spending to two per cent a year until the budget returns to surplus. At the same time, we are keeping taxation as a share of GDP below the level for 2007-08, when it was 23.5 per cent. We have provided savings to the budget over four years of $100 billion.