Thank you for the opportunity to speak at this important forum.
It comes at a time when the world hopefully eyes each "green shoot" as a possible turning point in what has become a long international economic nightmare.
Australia outperforming amid the global slump
Despite these "green shoots", international economic activity is still predicted to shrink by 1.4% in 2009, the first negative since the Second World War.
Even the recessions of the early 1980s and 1990s still saw positive economic growth across the globe, unlike the current circumstances.
The United States has just reported its fourth consecutive quarter of negative growth and the United Kingdom its fifth.
The European economies collectively have also recorded five consecutive quarters of negative growth, shrinking by a disturbing 2.5% in the three months to the end of March. But we have seen more positive signs from both France and Germany in recent days.
The one thing we know for certain is that Australia has withstood the economic crisis better than any comparable nation. Our economy has managed to stay out of technical recession, recording one quarter of negative growth last year, before returning to growth in the March quarter. In fact, we had the highest growth rate of any economy in the OECD in those latest figures.
While advanced economies contracted by an annualised rate of 8.1% overall, our economy grew by an annualised rate of 1.5% in the March quarter.
The Australian government's response
There is, of course, a combination of reasons for Australia's comparable resilience.
Australia's financial sector has not been the hindrance to growth that other nations have experienced in recent years. A combination of world class prudential regulation, conservative lending practices, a market structure underpinned by four pillars and the government's determination to institute an early and comprehensive bank guarantee have meant that our financial sector has remained sound.
More generally, Australia's employers and employees have shown admirable flexibility in reaching accommodations to deal with slowdowns in activity without resorting to mass layoffs, perhaps remembering that Australia a short time ago was facing a dramatic skills crisis.
Of course, also vitally important was the government's fiscal response.
There are those who derided the government's measures as "cash splashes" and "sugar hits", calling on the Friedmanite permanent income hypothesis to posit that the government's stimulus payments would not be as effective a stimulus as permanent tax cuts.
In the face of the results of the government's stimulus payments, I would contend this argument is unsustainable.
It is also, in my view, inarguable that such an approach would have led to a permanently higher budget deficit as opposed to the targeted and temporary stimulus chosen by the government.
This is despite the fact that the people who called for the adoption of tax cuts are the same people who now complain the deficit is too high.
Moreover, the bonus payments to low and middle income households spurred retail spending, represented in solid retail sales figures.
Household consumption represents around 55% of GDP and the retail sector employs about 11% of the working population so, by supporting that sector, the government also crucially kept Australians in jobs.
Our unemployment rate, while still trending upwards, is well below that of comparable overseas economies.
And business and consumer confidence figures released over the past week show business confidence at its highest level in around two years and spending on the rise.
Without the bonus payments, Treasury figures show Australia would have gone into technical recession, with the national economy contracting in the March quarter, as it did in virtually every other advanced economy.
At boardrooms I visit, there is a common story I hear.
That is that 18 months ago, they were being told by their overseas head offices that it was a matter of time before Australia would follow the rest of the world into severe recession.
In many cases, requests for additional investment to facilitate local expansion were denied because Australia was simply seen as lagging behind the rest of the world in suffering a severe contraction.
There is now a different view in head offices, governments and economic think tanks around the world - a realisation that actually Australia has, through a combination of private and public sector action, avoided the type of debilitating slowdown experienced elsewhere.
The government's budgetary projections, not too long ago, were criticised for being overly optimistic. This is not a criticism we commonly hear now.
But we can not get ahead of ourselves. There remain significant challenges ahead.
Ongoing challenges
With 8 of our top 10 trading partners in recession or contracting over the last year (and with the other 2 experiencing a significant fall away of growth), it would be foolish to think for a moment that Australia will not be further impacted by this crisis.
To keep the unemployment rate steady, it is necessary to create between 15,000 and 20,000 jobs a month and grow the economy at 3% a year - a huge challenge in this international environment. Hence the government's continual warnings that there is further to go before we can safely say our economy is through this episode.
That is why we say it is imprudent to talk of withdrawing fiscal stimulus at this stage of the cycle.
As the IMF said earlier this month, our "timely and significant macro policy response cushioned the domestic impact of the global financial crisis".
The fiscal stimulus is also clearly prudent, even fiscally conservative.
Deficit and debt
The need to step in to fill the pull-back in investment by the private sector coincided with a major fall in government revenue, meaning temporarily running a budget deficit.
Once economic conditions improve, the Rudd government is committed to returning the budget to surplus. As a member of the Expenditure Review Committee, I know the budget rules we have set to do so are tough but we are determined to hold to them.
In the meantime, our budget deficit this year - equivalent to 4.9% of GDP - is less than half the collective deficit being run by major advanced economies.
The most recent IMF report emphasised the responsible budgetary position we have taken.
"The shift into deficit was justified in current circumstances," it said.
The IMF also noted that government debt remains low compared to other advanced economies.
Our net debt will remain far lower than any of the major advanced economies - peaking at 13.8 per cent of GDP in 2013‑14, compared to 90% for major advanced economies.
Our objective has been a stimulus - targeted and temporary - with no long-term burden on the budget, to cushion Australia and also to make an important contribution to our long-term economic reform agenda.
Long-term planning
Our education revolution, for example, is about providing future generations of Australians with the skills and knowledge to ensure this country remains smart, productive and able to meet the needs of an evolving economy.
The projects the government is embarking on now are also partly an effort fix things that may have been broken for a while but neglected by the previous government. There are certain cracks - be they regulatory, social or infrastructure - that our prosperity papered over but which have since been exposed.
The government's three-stage stimulus strategy, of which the bonus payments were only stage one, is so much more than a plan to stabilise the economy in the short term.
Rahm Emmanuel's memorable phrase "you should never let a crisis go to waste" has been quoted many times.
He meant, of course, that a crisis can present opportunities for reform that might be difficulty in better times. In our case, we have not let this crisis go to waste in terms of infrastructure spending - so important for productivity.
Because we know that getting through this crisis is one thing - but productivity will be the key to longer term growth and prosperity.
And so, of course, 70% of our stimulus package is dedicated to infrastructure.
Roads, rail and ports are important in this program. Also, as you know, are schools.
Language laboratories, new classrooms, science blocks and libraries and, yes, school halls. As someone who has stood many times under a leaky awning on a rainy day in a school in my Western Sydney electorate with no school hall, talking to children about pursuing further education, I can tell you school halls are important to education outcomes and long-term productivity.
Just because, unsurprisingly, much of the time and energy of economic ministers has been devoted to getting us through this crisis does not mean that we have not been attending to the longer term.
That has also meant cleaning up the inefficient burden of regulation that often arises from businesses having to comply with eight different sets of state and territory regulation and expanding Australia's productive capacity over the medium-term through competition reform.
We are a middle sized economy.
Unharmonised regulations make our economy smaller, when our aim needs to be to make it larger.
For many years, Australia suffered from the tyranny of distance - the thousands of kilometres that separated us from the major markets of the US and Europe.
The re-alignment of the world economy with rapid growth in Asia means the tyranny of distance is no longer such an issue.
One of the major impediments to our economic growth is now the tyranny of difference. Tackling different styles and methods of regulation across state and territory border creates an unacceptable regulatory burden for businesses operating, or seeking to operate, across state and territory borders.
Tackling this in areas as diverse as occupational health and safety, licensing, and weights and measures has been a priority for the government, especially my colleagues Lindsay Tanner and Craig Emerson.
In my former portfolio of consumer affairs, a key priority was the development of a uniform national consumer law, which the Productivity Commission has estimated will benefit Australians by $1.5 to $4.5 billion a year.
The government is doing the same in relation to consumer credit and we have already introduced several pieces of legislation designed to give effect to COAG agreements, including regulation of trustee companies, margin lending and a national register of personal property securities, which will replace 70 separate registers.
In total, we have a list of 27 areas of business regulation requiring regulatory reform that we are working through and 8 priority areas of competition reform. These priority areas include transport, energy and infrastructure access reform.
In other reforms, our Budget night announcement to abolish the inefficient Foreign Investment Fund rules and instigate substantial reform of the controlled foreign company rules may not have made the front pages of the daily newspapers but the importance of these reforms should not be underestimated.
Abolishing FIF and reforming the CFC rules are estimated by Treasury to save business, primarily in the financial sector, up to $80 million per year in compliance costs. I believe these changes will come to be seen as important steps in our efforts to ensure the tax system does not hinder Australia's competitiveness as a financial services hub or the expansion of Australian companies into new and emerging markets.
Conclusion
In conclusion, having a strong economy means so much more than "a beautiful set of numbers".
As the Minister for Human Services, I spend a lot of time in Centrelink offices. I know that every statistic represents a human story, that every percentage point of unemployment represents not just lost productivity but also thousands of people struggling to make ends meet.
That is why the government is committed to the jobs, hope and economic benefits supported by our stimulus program, and the long-term prosperity that follows for future generations of Australians.