Recession admission not a distraction: Swan

Treasurer Wayne Swan denies that the government\’s admission that Australia will be dragged into recession is an attempt to deflect attention away from Labor\’s border protection policy.


Prime Minister Kevin Rudd told an economic forum in Adelaide on Monday that it was “inevitable” Australia would be dragged into recession.

The economy recorded its first quarter of negative growth in eight years during the final three months of 2008 and the March quarter economic growth reading will be released on June 3.

But Mr Swan dismissed opposition claims the government was acknowledging a recession after months of avoiding the term to deflect attention away from the issue of boat people.

“That is completely ridiculous and demonstrates just how desperate the opposition has become,” Mr Swan told ABC Radio on Tuesday.

He said Labor had been warning the Australian public of an impending recession for some time. Economic growth forecasts from the International Monetary Fund (IMF), due out on Wednesday, as well as next month\’s budget growth predictions and national accounts figures were likely to further downgrade growth in the domestic economy, Mr Swan said.

“What I can be is frank with the Australian people about the magnitude of the global recession,” he said. “The fact that seven of our 10 largest trading partners are already in recession, about the fact that the IMF is about to further downgrade its growth forecasts.”

But Mr Swan said the Australian economy was still the best positioned of those in the developed world to weather the global financial crisis.

“It\’s also important … we underline the strengths in the Australian economy because out of all of the developed economies in the world there is one that most people would want to be in and it still remains the Australian economy.”

Political debate on boat people was sparked by last week\’s boat explosion near Ashmore Island off the northwest coast of Australia, in which five asylum seekers were killed and dozens more injured.