Member for Isaacs

Stop campaigning against our economy

01 November 2011

Australians are proud of their economy and so they should be - it is one of the strongest in the advanced world.

The Dreyfus Files - The Age

Australians are proud of their economy and so they should be - it is one of the strongest in the advanced world.

We have very low levels of public debt (less than a tenth of the level across the major advanced economies) low unemployment (around half the level of the US), and a massive pipeline of investments, particularly in resources.

So as people around the world watch the latest economic upheavals in the US and Europe with some trepidation, in Australia we approach this period of uncertainty in a much stronger position than other nations in the world.

When the global financial crisis hit less than three years ago, we heeded the warnings from the international community that it would extremely hard for any economy to recover from a recession that was induced by this event, and we acted to avert a recession at home.

The actions that we took during the GFC, along with the hard work of the Australian people, have earned us a strong outlook, strong job growth and a strong fiscal position. It's meant that despite the fact that we've been hit hard by natural disasters, we today sit in one of the most enviable economic positions in the developed world.

These facts have not stopped acting opposition leader Warren Truss and shadow treasurer Joe Hockey, who in moments of frenzied hyperbole, have attempted to shoot us down by comparing Australia's economic position with the crisis in Greece.

It says a lot about Joe Hockey - a bloke who wants to be Treasurer himself - that he managed to work comparisons between Greece and Australia into an interview last week. There's little doubt that he'd rather see the government fail than the country succeed. This alone should disqualify him for high office in this country. It is an indictment that he sits at the head of the Coalition's economic team - arguably the worst economic team presented to the Australian people in modern political history.

The situation in Greece over recent months has shocked the world. The country was so deeply indebted it was at risk of immediate default. The International Monetary Fund and the European Union had to step in to bail them out. And the budget cuts that the Greek Parliament has introduced to scale back the debt have led to widespread rioting in the shadows of the Parthenon.

The fact is, Greece's debt is about 125 per cent of the country's Gross Domestic Product (GDP). In comparison, Australia's is about 7 per cent.

Because the fundamentals of our economy are strong, we have kept our rolled gold triple A credit rating, while Greece's rating has been downgraded to CC, a rating so low it's often referred to as ''junk'' status.

To compare Australia to Greece is reckless in the extreme, and coming from these two senior members of the opposition, runs the risk of undermining confidence across our economy.

It's worth putting this picture in the broader perspective. The list below shows the forecast peaks of net debt as a proportion of GDP of several advanced economies - that is, the year in which their debt will reach its predicted maximum. It illustrates how well the Australian economy shapes up.

  • Average of major advanced economies - 91 per cent in 2016
  • Japan - 164 per cent in 2016
  • Italy - 101 per cent in 2011
  • US - 86 per cent in 2016
  • France - 82 per cent in 2013
  • UK - 80 per cent in 2013
  • Euro area - 69 per cent in 2013
  • Germany - 55 per cent in 2012
  • Canada - 36 per cent in 2013
  • Australia - 7.2 per cent in 2012

Just this week the IMF gave a big tick to the Gillard government's economic management. It has confirmed that our nation's outlook remains strong despite renewed concerns about the weakness of the global economy. As the Treasurer Wayne Swan said, ''When I sit around the table with my G20 counterparts, there is not one that wouldn't trade places with me. That's because they know, and the world knows, that Australia's economy is in very good nick compared to other advanced economies.''

I was also happy to hear the IMF also join the long list of credible voices that endorse the introduction of a carbon price.

The past few months have shown that the opposition are incapable of having a responsible conversation with the Australian community. Instead they have repeatedly chosen to reject the advice of the Treasury, reject the advice of economists, and reject the verdict of the IMF that Australia's actions during the GFC averted the recessions suffered by advanced economies around the globe.

To be fair to all Australians - business, industry and the community - it is time for the opposition to stop campaigning against Australia's economy, tell the truth about Australia's economic position and reject the cynical politics that seeks to undermine our well-earned confidence.