Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer, Senator Sherry. Can the Assistant Treasurer inform the Senate about the latest economic indicators and forecasts for the Australian economy? What do they show about business community confidence in the state of our economy and the role played in these results by the government’s swift and decisive action in implementing the stimulus package?

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

Thank you, Senator Furner. Business conditions and confidence continue to improve, according to the latest surveys from the National Australia Bank and from Dun and Bradstreet. The D&B business expectations survey for the December quarter shows sales and profit expectations have recorded their biggest one-quarter increase since the survey began in 1998. The NAB business survey for August released this morning shows business confidence has increased to its highest level in six years. The NAB says:

The result is the strongest since October 2003 and indicates that businesses are very optimistic about the economy, monetary and fiscal measures undertaken by authorities to deal with the current global crisis as well as the resultant economic impacts.

The NAB survey also shows business conditions improved to their highest level in more than a year, since May 2008, immediately before the global financial meltdown. Of course, this week we certainly do not celebrate but we observe the events of a year ago in the United States, when the global financial crisis really hit the world economy. Retail, construction, wholesale, mining and finance all reported positive business conditions, with construction taking over from retail as the best-performing industry. Again, I would highlight the contrast between Australia and North America and most of Europe, where activity in these sectors has collapsed. This proves and the survey shows that the phasing—and I want to emphasise that the government’s stimulus package is a phased approach—from direct stimulus payments to investment in nation building infrastructure of the government’s economic stimulus is supporting activity and confidence in our economy. The recovery will need the continued support of our stimulus package. The job is not yet over and we are certain we are not out of the woods yet. (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the Assistant Treasurer advise the Senate whether, in spite of those excellent figures, the Australian economy would still face serious dangers in the event that the stimulus is wound back?

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

To withdraw the stimulus prematurely, as the Liberal-National Party has urged, would pull the rug out from under the recovery. I mentioned yesterday that our annual economic growth is 0.6 per cent—the best of any advanced economy. However, employment growth is not about getting back to one per cent, bearing in mind that we are at 0.6. It is not about getting to two per cent of economic growth. For employment to grow, we have to get back to trend growth of three per cent and more. The NAB survey forecast that domestic GDP for 2009 will rise by 0.6 per cent, 2.1 per cent in 2010, with unemployment peaking at 6.7 per cent in 2010. Unemployment is currently at 5.8 per cent. So there will be jobs lost even with the most optimistic forecast. (Time expired)

Mark Furner (Queensland, 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 what he believes is the greatest risk to the growing signs of optimism that Australia is coming out the worst global financial crisis in 75 years?

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

The stimulus package has and will save some 200,000 jobs. The Liberal-National Party position of saying no to stimulus, sit on your hands and do nothing was effectively a yes vote for more than 200,000 extra unemployed in this country. The greatest danger to Australia’s recovery is listening to people who voted against the stimulus package. If we look back four months, they were the same people who accused the government of being overly optimistic in our budget forecast and now they are saying that we are being too pessimistic. So, four months ago, they had a totally different position about the relative strength of the Australian economy from the one they have now. The greatest risk is having the end of game drinks at half-time. That is the greatest risk to the economy at the present time. All the advanced economies are still in the worst recession in 75 years. (Time expired)