No place for PM’s ‘political pride’ in economic rebuild: Kevin Rudd

By Grace Ormsby

September 17 2020
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The former prime minister who steered Australia away from recession back in 2008 has weighed in on the “basic things” he believes the current government needs to do to improve national confidence in the economy.

Speaking at the Yahoo! Finance All Markets Summit, Kevin Rudd said there are two basic things that Prime Minister Scott Morrison and his government need to do to ensure Australia’s continued economic viability in the face of continuing COVID-19-induced uncertainty and a global recession.

The first, Mr Rudd flagged, is a continuity of the JobKeeper stimulus, and subsequent guarantee of its continuance.

He considered it as a form of “treading water” as uncertainty continues.

“Otherwise, consumer confidence – to the extent that it remains – will fall off a cliff and into a chasm.”

Secondly, but of equal importance, according to the former prime minister, is the need for “a national economic visionary statement”.

This is “a national infrastructure plan, which has multiple elements to it, which is an investment in the country’s infrastructure future, which creates employment opportunities at all levels across the country”.

“Clean energy is one part of that, but there are other parts as well,” he considered.

According to Mr Rudd, the whole point of such a narrative is to rebuild business confidence around such a plan.

“If we don’t do that, we’re just going to go back to – in fact, incur the same level of debt – continuing to apply the band aid.”

The former prime minister said such a vision works not just because of what it objectively injects into the economy, but because it has a subjective impact on “nation psychology, which brings us back to consumption”.

“What Mr Morrison needs to do is swallow his political pride and embrace a national infrastructure strategy, because it is the central piece of the economic narrative which our country is missing at present – and if at present we’re seeking to re-instill confidence in Australian consumers, that’s precisely what needs to happen,” he exclaimed.

Emphasising the need for a “credible economic narrative”, Mr Rudd said a challenge for Australia in the period ahead is the development of such a plan, “which the Australian people can have confidence in”.

Reflecting on his own plan during the global financial crisis, the former prime minister said his government had delivered a “global and national economic narrative, which was the nation building and jobs plan”.

“We did long-term infrastructure projects, medium-term projects, short-term infrastructure projects – 1.5 per cent of GDP invested in building state of the art libraries in every Australian school – this stock creates jobs across the country.”

“And then, it is a parallel vision to that carefully calibrated with short, medium and long-term projects, which causes people to psychologically conclude ‘there is a plan’, and second, materially in each local community generates real activity.”

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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