Aust PM address to the nation over global financial crisis

Updated October 14, 2008 20:45:53

The Australian Government is to hand out bililons of dollars across the community in a hope that spending will help provide a buffer against the current global financial crisis. The move comes as world markets continue to gyrate, and governments work furiously to end the uncertainty. The Prime Minister has addressed the nation describing the financial crisis as the worst Australians will see in their lifetime.

Presenter: Michael Cavanagh

Speaker: Australian Prime Minister Kevin Rudd, Treasurer Wayne Swan, Craig James, Commonwealth Securities

RUDD : There will be tough times ahead, but the government remains determined to take whatever action is necessary in the future to steer the economy through this global financial crisis and I have absolute confidence that as a nation we will get through these tough times together.

CAVANAGH : Part of Australian Prime Minister Kevin Rudd's televised address to the nation, as the global financial crisis continues to toss and turn. It's just under a year ago that the Australian Labor Party led by Mr Rudd won office painting itself as economic conservatives, determined to reassure the public that if elected it would be fiscally responsible. Earlier this year the Government in delivering its first budget was able to point to a surplus of around fifteen and a half billion US dollars as an example of its economic conservatism. However all this has changed as the financial crisis has governments reeling. Now the Australian Labor government has dipped deep into that budget surplus to stimulate the economy and provide a buffer against the economic meltdown. It is injecting around seven point three billion US dollars into the economy...

RUDD : The government remains determined also to take whatever action is necessary in the future to continue to maintain the stability of the Australian financial system and to continue to support positive economic growth in the economy.

CAVANAGH: Mr Rudd earlier explaining why the measures have been taken. These include three point four US billion dollars for pensioners, such as the elderly, those with disabilities and veterans. How times change, until the crisis hit, the government has been resisting calls for a pension increase arguing that it would not move till a review was completed next February. Now single pensioners will receive a lump sum payment of just under one thousand US dollars, couples just under 15 hundred US dollars. Eligible families with children a one off payment of around 700 US dollars , first home buyers just under 15 thousand US dollars. These and other measures such as increased spending for training which the Prime Minister says is to help counter the "economic equivalent of a rolling national security crisis." As Mr Rudd outlined the package, his Treasurer Wayne Swan stood next to him as they endeavoured to paint a picture of calm and being in control.

SWAN : It is the case that we are in the midst of the worst financial crisis ever to confront the modern market economy and the sooner that governments act to protect their people the better. That is the lesson that I learnt in Washington and New York in recent days. That is the lesson that other world leaders have learnt in their economies. The situation is moving very fast and it does require decisive, decisive action.

CAVANAGH: The government already has guaranteed all deposits in banks and other financial institutions such as credit unions for the next three years. The Central Bank shocked the markets last week with a one percentage point cut in official interest rates, markets were expecting half that. The economic package saw the Australian dollar kick along to just above 70 US cents, after being just above 63 US cents several days ago. Chief economist at Commonwealth Securities Craig James says while the government may be seen as possibly reacting a bit too early, the conditions call for action.

JAMES: Now we are seeing very much desperate times and its a case of desperate measures for desperate times I still think that the government can live up to its reputation as being economic conservative but really when you are faced with a crisis the magnitude of something in the late 1980's or even the Depression of the late 1920's early 1930's you have got to basically take all the actions that are responsible.