Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer, Senator Sherry. Can the Assistant Treasurer outline to the Senate the latest forecasts for the Australian economy? In particular, what are the challenges ahead, as detailed in the mid-year economic forecasts?

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

Thank you, Senator Farrell, for your ongoing interest in this very, very important issue—the relative strength of the Australian economy. Earlier this month Treasury released its mid-year economic forecasts, which confirm Australia as the world’s best performing advanced economy.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

And why was that? Was it Peter Costello?

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

I will be getting to that in a moment, Senator Abetz—but it was certainly nothing that you have contributed to the debate or the policy picture. MYEFO paints a different and improved picture than was predicted at the time of the budget, with forecasts for stronger growth, lower unemployment and smaller deficits and debt. The Australian economy grew by one per cent in 2008-09 and will continue to be stronger than the other advanced economies, growing by 1½ per cent in 2009-10 and 2¾ per cent in 2011.

All other advanced economies are going backwards—in other words, their economies are shrinking in this calendar year—except for Australia. Unemployment in Australia is now expected to be 6¾ per cent by the middle of next year—substantially lower than the peak of 8½ per cent forecast at budget time. However, the jobs outlook in Australia does remain difficult, but it is especially grim in many other advanced economies. Just look at the jobless rate announced last week in the US—already 10.2 per cent, which I think approximates to some 15 million to 16 million unemployed. There is massive unemployment in the US and many other countries. But we are not immune from the rest of the world and the poor condition that it is in. The improved unemployment forecast for Australia largely reflects the impact of the Rudd government’s stimulus package. It has cushioned against the worst effects of this global recession. It has saved some 200,000 jobs. (Time expired)

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Do the mid-year economic forecasts contain any assessment of what role the government’s fiscal stimulus package has played in countering the worst effects of the global recession? Is it important that the government’s stimulus strategy stays on course as planned?

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

The government believes—and, I think more importantly, a raft of independent experts believe—Australia’s stronger than expected economic performance is the result of community resilience, the success of the stimulus package in Australia, opposed by those opposite, and the combined effects of governments and central banks around the world. The MYEFO refers on several occasions to the success of the stimulus measures introduced by the Rudd government and the Reserve Bank. This is the job-saving and confidence-boosting recession-busting stimulus which the Liberal and National parties opposed. They opposed this stimulus. The consequence of the Liberal and National parties’ policy approach would have been unemployment levels approaching that of the United States—in other words, more than 10 per cent and one million unemployed. That was the approach of the irresponsible and divided Liberal and National parties. (Time expired)

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the Assistant Treasurer outline to the Senate the government’s priorities as it continues to guide Australia safely through the world economic downturn? How is the stimulus strategy continuing to provide the necessary support to keep Australians in work and our economy ahead of the rest of the world?

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

The Rudd government’s priorities have not changed from day one of the global financial crisis, which commenced about a year ago. We acted quickly and decisively at the onset of the crisis. We have acted patiently and with purpose to see the job through to full recovery, unlike those opposite who have continued to oppose major parts of the stimulus package. The government’s stimulus package is a three-stage strategy. It has immediate, medium and long-term elements which are there to support and cushion our economy at this extremely difficult time in the world economy—the worst recession in 75 years. The MYEFO recognises this and makes the point that:

... fiscal stimulus is still needed to support domestic activity. It remains appropriate for stimulus to be withdrawn progressively as private demand recovers, as it is designed to do.

The government’s strategy is going to plan, including returning to surplus within the next five years. (Time expired)