A day after saying Australia would inevitably slip into recession, the prime minister has warned that unemployment will rise but said next month\’s budget would increase stimulus for the economy.
But Kevin Rudd\’s press conference ended minutes before he could be quizzed on Reserve Bank governor Glenn Stevens\’ declaration that Australia was now in recession.
Mr Stevens today went further than the prime minister, saying Australia was now in recession.
“Whether or not the next GDP statistic, due in early June, shows another decline, I think the reasonable person, looking at all the information available now, would come to the conclusion that the Australian economy, too, is in recession,” Mr Stevens told a lunch in Adelaide.
Mr Rudd is in Western Australia hosting a jobs forum in the state, which has seen its powerhouse economy slow dramatically as the global financial crisis bites.
Mr Rudd said it was necessary to act locally, nationally and globally to reduce the impact of the global recession on Australia.
“The truth is this – the global economic recession makes it inevitable that we\’ll have a recession in Australia which means that, as we frame the budget, we\’re going to have to make even stronger our economic stimulus strategy because unemployment will rise even further,” Mr Rudd told reporters in Perth.
“As prime minister of Australia, I can\’t wish this global economic recession away.”
Mr Rudd said the federal government working with local communities could make a huge difference to the impact of the global recession on Australia.
“If we don\’t act together, then the impact of this recession will be greater than need be the case,” Mr Rudd said. Mr Rudd\’s press conference ended minutes before Mr Stevens\’ declaration.
Yesterday, Mr Rudd finally conceded the economy will be dragged into a recession for the first time since the early 1990s. Previously, he and Treasurer Wayne Swan had avoided using the “R” word.
Mr Rudd rejected Opposition Leader Malcolm Turnbull\’s claims he was shifting the focus from border protection issues to the global recession.
He said it was quite clear from the economic data from China and a range of other countries that a recession was inevitable in Australia.
“Australia is not an island, Australia is directly impacted by global economic factors in the first quarter of 2009,” Mr Rudd said.
“Most of the economic data coming out of those economies which directly affect Australia were negative, therefore, as night follows day, it affects Australia,” he said.
“Therefore, the global economic recession is making it inevitable there will be a recession (in) Australia.”
Mr Rudd said his comments were made in anticipation of a report by the International Monetary Fund (IMF).
He said the federal government had maintained a consistent strategy of economic stimulus through payments since the end of 2008 and its focus would be on job creation through infrastructure projects including the national broadband network.