Foreign Correspondence

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Kevin Rudd and Wayne Swan play down GDP's negative growth
AAP .. March 04, 2009 01:47pm

UPDATE 1.47pm: PRIME Minister Kevin Rudd says Australia can reduce the effect of the global recession, but not stop it.

The national accounts released today showed gross domestic product dropped
0.5 per cent in the December quarter, the first negative result in eight years.

Over the year to December, GDP rose 0.3 per cent.

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The September quarter GDP was unrevised at a rise of 0.1 per cent, meaning the economy
had avoided a "technical" recession of two consecutive quarters of negative economic growth.

Mr Rudd said the figures reflected the effects of the global recession on 17 advanced economies.

"Australia cannot continue to swim against the global economic tide," he told reporters in Gladstone.

"Australia can reduce the impact, cushion the impact, of the global economic tide but we cannot stop it altogether."

Federal Treasurer Wayne Swan says the contraction in global demand has been
"savage" but is adamant Australia will emerge from the financial crisis stronger than ever.

Mr Swan said the inevitable impact of the global recession was clearly evident in today's data.

But he said the Federal Government and the Reserve Bank of Australia had acted swiftly to support economic
activity and jobs precisely at the time in the December quarter when there was a very sharp global contraction.

"There is absolutely no doubt that things in this country would have been far worse had the government
not acted when we did with the economic security strategy announced last October,'' he said.

Mr Rudd said the government's initial economic stimulus package had cushioned the impact, as reflected by the
fact that in the December quarter Australia was among the top five performing economies in the industrial world.

"Had the government not introduced the stimulus package at the end of last year the
impact on Australian jobs and the Australian economy would have been worse," he said.

"This underlines the government's resolve to continue to take whatever
further action is necessary to underpin growth and jobs in the future."

Mr Swan said the national accounts are a "sobering reflection" of an extremely difficult global environment.

Mr Swan said the government's $42 billion nation building
and jobs plan will provide substantial fiscal stimulus.

"I've heard some throwing around a line that somehow the government has spent all this money and it hasn't had the impact.

"The fact is the $42 billion package hasn't begun (to flow) and it is designed to flow
through over the next two years, precisely as it turns out at the time it is needed.''

Mr Swan denied that the figures showed that a large part of the government's stimulus package had gone into people's savings.

The main reason for the boost to savings was the 300-basis points cut in interest rates for the period in question, he said.

"I think the principal cause of the increase in the savings rate ... are people who are at this stage saving
the benefit that has come to them through a very substantial reduction in their mortgage repayments,'' he said.

However, Mr Swan conceded some of the economic security strategy may have ended up in savings accounts.

"Yes it may be that there is some part of the economic security strategy
which has been saved, and we said at the time that wouldn't be a bad thing.''

Mr Swan said it was inevitable that what was happening in the rest of the world would have a dramatic impact in Australia.

He said when growth contracted, it had human consequences.

"You could see it in the eyes of those people who were retrenched from Pacific Brands
the other day. You can feel it and hear it in the voices of people you talk to,'' he said.

"It means a very significant economic challenge for our country.''
http://www.news.com.au/heraldsun/story/0,21985,25137616-661,00.html

Yep, our Labor-Liberal words are almost identical to your Democrat-
Republican words, that's in gov and in non-partial wider debate.