| 26.07,09. 09:17 AM |
Prime Minister Kevin Rudd sees tough, bumpy recovery
July 25, 2009
PRIME Minister Kevin Rudd has warned Australia's recovery from the economic downturn will be tough and bumpy.
Mr Rudd, in a lengthy essay published today, said families would face financial pressures such as rising interest rates and higher prices for food and petrol.
But the nation’s economy would emerge stronger, Mr Rudd wrote.
He warned the government would have to make some tough budget decisions.
“Australia is performing better than most other economies, with the fastest growth, the second-lowest unemployment and the lowest debt and deficit of all the major advanced economies,” Mr Rudd wrote.
“And we remain the only advanced economy not to have gone into recession.
“The economic recovery, however, will be a long, tough and bumpy road with many twists and turns.”
He said the government would also have to make painful budget decisions while unemployment, interest rates, petrol costs and food prices rose.
“These four pressures will hit Australian families just as they begin to feel the first benefits of recovery,” Mr Rudd wrote.
“However, despite the fact that the recovery will be long and tough, with lots of bumps along the way, the government is confident Australia will emerge with a stronger, more stable and more prosperous economy.”
Mr Rudd also lashed out again at what he called the “ideological hypocrisy” of the right and neo-liberal free markets.
“This fundamentalist ideology of self-regulating markets has imploded comprehensively with the current crisis,” he said in the essay, which was published by Fairfax Media.
“We have seen spectacular market failure requiring equally spectacular government intervention in the economy to effectively save the system from itself.”
There was a strong case, Mr Rudd wrote, for the G20 to play a leading role to co-ordinate a successful exit from fiscal and financial market interventions that governments have undertaken.
“But it is a delicate balancing act,” Mr Rudd said.
“An early withdrawal of stimulus can endanger confidence and economic recovery.”
Opposition leader Malcolm Turnbull said the prime minister had failed to grasp the vital role small businesses would play in Australia's economic recovery.
“The small business is at the very frontline of any economic recovery ... (yet) Kevin Rudd has nothing to say about that in 6100 words,” Mr Turnbull told ABC Radio.
“It is truly extraordinary and just shows how out of touch he is with the real economy, with what really is driving jobs and preserving jobs at the moment.”
Australian Associated Press