Australia better placed

Australia enters this downturn from a position of relative strength. The Government acted early to shore up confidence in the financial system, provide stimulus to the economy and cushion the impact on growth and jobs.

As many advanced economies started to crumble, Australia maintained growth through most of 2008 with the December quarter recording the first contraction in GDP since December 2000. In contrast, most other advanced economies were already experiencing a deep recession by the end of 2008.

This starting point, coupled with the timely and substantial policy actions taken to support activity and jobs,

means the contraction in Australia is expected to be much milder than elsewhere.

Advanced economies are expected to contract by 3¾ per cent in 2009, compared to a fall of ½ of a per cent in Australia in 2009‑10.

Australia's financial system remains strong and well regulated, competitive and dynamic. Our banks are considered to be among the safest in the world and enjoy continued access to global capital markets. This bodes well for our recovery as global threats subside.

Australia's strong net public debt position has given us greater scope to take decisive action to stimulate the economy and support the financial

system. Even after taking into account falling revenues and the Government's stimulus response, Australia's net public debt position will remain markedly lower than the major advanced economies.

Investing in the future

The Government is also undertaking significant investment — in essential infrastructure and skills — to position us for recovery.

The Government is investing in road, rail and port infrastructure to lift Australia's export capacity. The Government's COAG agenda provides substantial investment in the areas of education and health to help lift long‑term productivity and growth.