STRENGTHENING THE AUSTRALIAN ECONOMY

The Rudd Government’s fiscal stimulus has been vital to Australia’s standing as one of only three advanced economies to avoid technical recession.

Avoiding recession in Australia has had its costs, but these pale in comparison to the long term costs of recession, including higher unemployment.It is argued by some that future generations are being saddled with unsustainable debt as a result of the stimulus. I would say two things to those people.

First, Australia was voted by the World Economic Forum as the country with the lowest risk of sovereign debt default. The Economist magazine, in its analysis of four different measures of debt sustainability, found that 19 major advanced economies – including the US, Canada, Germany and France – had more unsustainable debt than Australia.  Our net Government debt will peak at 9.6% of GDP in 2013/14, the same time that the average net government debt of major advanced economies will hit 93% of GDP.

Secondly, one of the worst things we could do for future generations would be to leave them a legacy of high unemployment. Recessions don’t just come and go; they have ramifications. The psychological, health, family relationship and social impacts of unemployment can be far reaching and long lasting. In particular, young people affected by unemployment find it very difficult to recover, and in many cases suffer from diminished life earnings.

While unemployment fell by 0.2 per cent in January to 5.3 per cent, there are still 612,000 Australians are still out of work. This number represents real people.So the resilience of Australia’s economy is no cause for complacency, and the Rudd Government will continue to work to strengthen our economy and create jobs by implementing better regulation to drive efficiency and investing in improvements to productivity and growth.

So the resilience of Australia’s economy is no cause for complacency, and the Rudd Government will continue to work to strengthen our economy and create jobs by implementing better regulation to drive efficiency and investing in improvements to productivity and growth.

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