Australian leaders finally utter the 'R' word
Updated
As the world's economy spirals downward, the word 'recession' has been used by economists and world leaders quite freely - except in Australia. For months the word has not slipped past the lips of Australia's leaders and senior finance officials.
That is up until now, when this week it seems that the word 'recession' has once again been discovered by Australian Prime Minister Kevin Rudd and the head of the Central Bank.
Presenter: Michael Cavanagh
Speaker: Kevin Rudd, Australia's prime minister; Glenn Stevens, head of Australia's Reserve Bank
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MICHAEL CAVANAGH, REPORTER: As unemployment grew and business and consumer confidence plummeted, Kevin Rudd and his ministers did everything to avoid the word 'recession'. Even when the Government put into place two financial stimulus packages, totalling just under $US37 billion, the 'R word' didn't get a run. Now, in the space of 24 hours, Mr Rudd twice has accepted what he describes now as inevitable and he points to more money being made available.
KEVIN RUDD, PRIME MINISTER: The global economic recession means that a recession is inevitable in Australia. Unemployment will therefore rise further and as a result, continued strong economic stimulus will be necessary through the budget.
MICHAEL CAVANAGH: If saying it more than once by Mr Rudd isn't enough, the head of Australia's independent Reserve Bank, Glenn Stevens, is also less reticent while addressing the body that represents Australia's company directors.
GLENN STEVENS, HEAD OF THE RESERVE BANK: I think the reasonable person, looking at all the information that we have available now, would come to the conclusion that Australia, too, is in recession.
MICHAEL CAVANAGH: Growth this financial year is forecast to be 1 per cent, declining to 0.75 per cent for 2009-2010, and by the middle of next year unemployment is tipped to be 7 per cent.
During the time that Mr Rudd was avoiding the word 'recession', he continually pointed to China as being the likely answer to Australia's financial woes. Now that the Prime Minister concedes that there is a recession, it would seem that China is not the savior but possibly is part of the problem.
KEVIN RUDD: It's quite plain that we have seen most recently the economic data from China. It's quite plain that we have also seen the fact that during the first quarter of 2009, a range of datas emerge from various economies around the world which have a direct influence on Australia - that most of that data has been negative.
MICHAEL CAVANAGH: The Reserve Bank boss, Glenn Stevens, paints a slightly more rosy picture of China.
GLENN STEVENS: It's probably not entirely coincidental that the nearest signs of an upward turning point in the economic activity around the world are accumulating in China, though not exclusively there.
MICHAEL CAVANAGH: Judging by public opinion polls, Australians for some time now have accepted that the country was not immune to the region's economic woes. They will probably think that Mr Rudd has finally come to the same conclusion that they arrived at some time ago. Now it will become a battle between the Government and the Opposition parties on how deep the recession is and what should be done to rectify it.
