Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer, Senator Sherry. Can the Assistant Treasurer advise the Senate how the government’s stimulus packages have worked to help Australia in these difficult times? How have they been structured to provide immediate, medium- and long-term support for our economy? Can the Assistant Treasurer inform the Senate how we in Australia have compared with other major advanced economies?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I thank Senator Hutchins for his very important question. There is no doubt that the government’s stimulus strategy has shielded and cushioned this economy from the worst of the global recession. The Rudd Labor government recognised the dangers that the world financial and economic disaster presented for Australia and we acted decisively to implement a three-stage stimulus program.

The first stage stimulus payments to consumers have had an immediate impact by increasing consumer spending. For example, retail sales in Australia are 5.2 per cent higher than the levels of last November, whilst in comparison in most other counties of the world they have fallen—they will fall by an average of 1.4 per cent. In comparable economies retail sales have collapsed. In Australia, that has not occurred, and I would point out that there are well over one million workers in the retail sector in Australia.

The immediate part of the stimulus totals some $27 billion. In the medium term we will spend some $35 billion on vital infrastructure—local community projects, the largest school modernisation in our history and social housing. The long-term stimulus will concentrate on major rail, road, port, education, clean energy and broadband. All up, these stages represent a $77 billion investment in Australia’s future and they will protect Australia from the present danger of the global recession, the worst in some 75 years. These important investments also underpin long-term productivity growth.

The stimulus sustained growth of 0.4 per cent in the Australian economy in March. The consequence is that there will be some 200,000 Australians kept in jobs who would otherwise have lost them. (Time expired)

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the Assistant Treasurer advise the Senate what the chances are of a second shockwave hitting our economy as alluded to by the Secretary to the Treasury, Dr Ken Henry, in his address to the Australian Industry Group yesterday? In light of this risk, is now the time to wind back the stimulus?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The Liberal opposition is arguing that the stimulus should be ceased and therefore the investments that I have outlined—important road, rail and broadband investments—should be discontinued.

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! Senator Sherry, resume your seat. On both sides there needs to be order so that I can hear Senator Sherry.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The Liberal opposition argue that these sorts of important long-term productivity investments should cease. The Secretary to the Treasury, Dr Henry, pointed out yesterday that there are still dangers in the world economy and still challenges that Australia has to take account of in terms of maintaining the stimulus packages that we have outlined. Just last week another major bank fell over in the United States. In the state of Alabama, the $25 billion Colonial Bank, a US bank, has become the largest US bank to fail this year and the sixth largest bank in history. These are factors we have to take into account when considering the importance of the— (Time expired)

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the Assistant Treasurer aware of any credible alternative policies to the government’s strategy of fiscal stimulus to keep the economy growing and safeguard the jobs of Australians?

Opposition Senators:

Opposition senators interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The only clear policy—and we had some noisy interjections from those opposite—for example, on tax, was from Mr Hockey, the shadow Treasurer, arguing that we should have broken our promise, and of course the former Liberal government’s policy, and reneged on the tax cuts. We delivered them in full and we are proud to do so. The only other strategy we have had from the opposition Liberal-National parties was the one outlined by the previous shadow Treasurer, who argued that in the face of the worst recession in 75 years the government should sit on its hands and do nothing. That was the strategy of those opposite—no stimulus package to cushion the Australian economy, no stimulus package to save 200,000 jobs and no stimulus package to keep the worst recession in 75 years away from Australia. (Time expired)