Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Conroy. Can the minister update the Senate on any recent commentary about the Australian economy’s capacity to cope with the current global economic circumstances?

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

I thank Senator Moore for that question. The Rudd government have been open and honest about the challenge that our economy faces on the international front. We are now facing some of the most challenging times in global financial markets in more than a quarter of a century. We have consistently made the point that our economy is not immune from those global difficulties. However, we have also consistently maintained that the Australian economy, including our banking sector, is in a strong position to weather these international effects.

The responsible economic policies that the Rudd government are implementing will ensure the ongoing strength of our economy in the long term. This includes our budget back in May, which struck the right balance between eliminating the reckless spending of those opposite, delivering substantial relief to working families and providing that platform to enable investment in future productive capacity. This budget was framed with the difficult global economic circumstances in mind and in the knowledge that working families were doing it tough after 10 consecutive interest rate rises from those opposite. That is why we delivered a strong $22 billion surplus to buffer our economy from global difficulties, take the pressure off inflation and enable responsible nation-building investments.

The International Monetary Fund article IV report on Australia released overnight strongly endorses the government’s economic policy settings. The IMF has provided support for the government’s view that, while we are not immune from global difficulties, we are in better shape than other countries. The IMF stated:

Looking ahead, Directors considered that the sound macroeconomic framework should permit Australia to weather the global downturn and contain inflationary pressures.

That is from the IMF public information notice. Importantly, the IMF commended the government’s budget, noting:

Directors welcomed the support that prudent fiscal policy is providing for monetary policy. They noted that the reduction in public spending growth in the latest budget will help reduce inflation, and the intention to save any further positive revenue outcomes in 2008/09 will allow the automatic stabilizers to work.

That is a direct quote. The IMF also commended our decision to establish three new infrastructure funds for long-term investment in health, education and infrastructure.

We welcome the IMF’s positive assessment of Australia’s economic performance and prospects. It is a ringing endorsement for the Rudd government’s responsible, long-term approach to economic management. However, we cannot rest on our laurels. The IMF has backed the government’s fiscal policy. It is time that those opposite did so as well. I call on those opposite to heed the words of the IMF and to support the government’s budget initiatives. As the IMF has recognised, we are currently facing considerable global uncertainty. The nation cannot afford opportunistic economic vandalism from those opposite. (Time expired)