Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, my question is to the Assistant Treasurer, Senator Sherry. Is the Assistant Treasurer aware of the latest analysis from the International Monetary Fund on exit strategies from the global recession? Can the Assistant Treasurer inform the Senate on how this independent analysis of the global response to the world’s worst synchronised economic downturn in 75 years relates to the Rudd government’s timely, targeted and temporary response to the crisis?

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

Senator Abetz interjecting—

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

Senator Abetz would do better to look at the performance of Senator Barnaby Joyce this morning in the media. I understand it is well worth a look. The IMF, a very respected international economic forecaster and analyser, has released a document called Exiting from crisis intervention policies. The executive directors of the IMF noted:

The bold and extraordinary measures taken in response to the crisis have helped lessen the severity of the global recession and stabilised financial markets, allowing normality to return in many countries.

That, of course, would be the bold and decisive action that the Rudd Labor government took to introduce stimulus at the onset of the crisis.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

With Peter Costello’s money.

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

And I should not forget the support of the Greens, Senator Fielding and Senator Xenophon—but the strong opposition of the Liberal and National parties to that stimulus package. The IMF also cautions in its report that ‘available data does not advocate a broad based withdrawal of stimulus’. It is warning against too rapid a withdrawal of stimulus. It also notes that the ‘recovery still appears sluggish’, Senator Joyce. It still appears sluggish ‘especially in advanced economies, and there is little evidence that private demand is self-sustaining’. Importantly, the IMF says:

Letting the fiscal stimulus expire should be straightforward from a technical standpoint because much of the stimulus has consisted of temporary measures.

That is true of Australia. Our stimulus peaked last year and has a phase-out within it. As the Rudd government has said from day one, stimulus measures have been timely, targeted— (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Does the IMF report on how governments should deal with their debt commitments and what do the debt levels outlined in this analysis say about Australia’s public debt compared with that of other advanced countries?

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

Thank you for that very important question. The IMF points out that the global economic crisis has resulted in the largest worsening of the fiscal accounts—that is, government debt—since the Second World War. General government gross debt—and that is gross debt, Senator Joyce, not net debt; you got a little confused this morning in the media—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Don’t be so arrogant!

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

If Senator Joyce is going to go out in the media and talk about gross debt and net debt he should understand these concepts. His performance this morning is well worth a look. The IMF points out that the ratio of gross debt to GDP in advanced economies will rise to 73 per cent in 2007—

Opposition Senators:

Opposition senators interjecting—

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

The time for debating this is at the end of question time. Senator Sherry, continue.

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

Government debt will rise to 73 per cent in 2007 and to 109 per cent in 2014. The IMF recommends that there should be debt reduction to 60 per cent of GDP. Of course, Australia has the lowest government debt of any advanced economy. (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Does the IMF state what fiscal measures government should take to reduce their debt levels? Are there obstacles to the Rudd government’s plans for fiscal restraint—in particular, the Rudd government’s initiatives to help Australia meet the challenges of a growing and ageing population?

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

As far as the IMF is concerned, it is the Rudd government that has ensured that Australia has the lowest level of government debt of all the advanced economies in the world. Of course, there is some nostalgia on the other side for Mr Costello. Where is he? Where is Mr Costello? He has been replaced by Senator Joyce. He has been replaced by Mr Hockey and Mr Abbott, who thinks economics is boring. So where is he, for those on the other side who are revelling in their nostalgia? I can tell you one thing: I will give Mr Costello a compliment. If you look at Senator Joyce, if you look at Mr Hockey and if you look at Mr Abbott, Mr Costello is a three-time winner of the Nobel Prize for Economics. I will give you that, but where is he? Revel in your nostalgia, and look at what has replaced him. (Time expired)