Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Sherry, the Assistant Treasurer. Can the Assistant Treasurer inform the Senate about the latest international efforts to help the world recover from the global recession, especially in light of the G20 finance ministers meeting in London over the weekend? How is Australia faring compared to the rest of the world? What is the view of the G20 on winding back stimulus strategies?

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

Thank you for the question. This is the first parliamentary sitting since the release of the latest national accounts. It is important to highlight that the Australian economy grew by 0.6 per cent in the June quarter and 0.6 per cent for the year. The Australian economy is the best performing advanced economy in the world. It is the only one to record positive growth over the past year. There is no doubt that the Rudd government’s swift and decisive action, including the stimulus package, played a critical part.

Let’s contrast Australia with the rest of the world. In the US, the economy shrunk—it went backwards by 3.9 per cent; in the Euro area, 4.7 per cent; in the UK, 5.5 per cent; and in Japan, 6.4 per cent. If we look at the latest unemployment figures released just a few days ago in the United States, their jobless rate has increased to 9.7 per cent—that is, some 14.9 million people out of work—the highest level in 26 years. It has increased by seven million since the recession hit late in 2007. Australia has avoided this recession, but unfortunately most of the world has not.

The G20 countries—I might say, including many right-of-centre political governments—met in London and they have called for the fiscal stimulus to continue until the job is done. The German finance minister is well known as a particularly conservative finance minister from a right-wing government. He said:

Everyone is convinced that we have to support the financial markets by all measures and stimulus packages which are necessary ...

The Australian government agrees. (Time expired)

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I thank the minister for informing us that the Australian economy is the best performing economy. In light of that, can the Assistant Treasurer inform the Senate what would have been the consequences for the Australian economy if the Rudd government had not taken the swift and decisive action of implementing the stimulus package?

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

At least more than 200,000 Australians unemployed. Without that stimulus package we would have borne the full brunt of the world financial and economic crisis. The Rudd Labor government has taken decisive actions to cushion the Australian economy. But we are certainly not out of the woods yet and it is certainly no time to celebrate, because, despite the fact that the Australian economy is the only advanced economy that grew by 0.6 per cent, you need growth of 3.5 per cent to keep unemployment steady. Certainly, 0.6 per cent is well below 3.5 per cent, so unemployment will continue to go up here because of the world financial and economic crisis. Unemployment will continue to rise. There are some ongoing challenges. (Time expired)

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the Assistant Treasurer inform the Senate of other important measures the Rudd government is prepared to take to guide Australia through the global recession? What risks does Australia face from the short-sighted and opportunistic calls to wind back the stimulus at this time?

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

The Rudd Labor government saw the need to deliver a fiscal stimulus to cushion the Australian economy against the worst recession in 75 years. We acted quickly and decisively, but we did not just act with respect to the short term; we also acted with respect to the medium and longer term investment in the Australian economy. That will be very important—it will be critical—as the Australian economy recovers from the impact of this world financial and economic recession. Seven dollars out of $10 of the stimulus package is invested in infrastructure—in building long-term investment, productive investment—in the Australian economy in areas that were sorely neglected by the former, Liberal government: roads, railways, ports, broadband. So the medium to longer term fiscal stimulus will ensure a stronger Australian economy as the world— (Time expired)