Former Prime Minister’s Primary School GFC Lesson

Former Prime Minister Kevin Rudd delivers a lesson on how his government tackled the global financial crisis in this video of his appearance at Wellers Hill State School in Brisbane.

The relevant section begins around the two-minute mark.

What Caused The Financial Crisis?

The global financial crisis is “a crisis of credit markets”, says Malcolm Edey, Assistant Governor (Economic) of the Reserve Bank of Australia.

In an address to the Foundation for Aged Care Business Breakfast in Sydney, Edey traced the origins of the financial crisis, discussed its effects and looked at responses to the crisis.

Text of Reserve Bank Assistant Governor Malcolm Edey’s speech:

I’ve been asked to talk this morning about the current financial crisis: where it came from, and the effects that it’s having on the economy.

What we refer to as the global financial crisis is, at its core, a crisis of credit markets, centred particularly in the United States, the UK and Europe, but with significant spill-over effects to the rest of the world.

Over the last year or so, financial institutions in the major economies have reported losses on a large scale. Some of these institutions have become insolvent, or have had to be taken over or rescued by their governments. Associated with all of that has been a massive swing in the appetite of world financial markets for risk, and in their capacity to accept risk. The result has been a shift from easily available credit to tight credit. [Read more…]

Economic Growth Declines 0.5% In December Quarter

Australia’s Gross Domestic Product (GDP) declined by 0.5% in the December quarter, according to the latest National Accounts figures.

The 0.5% contraction was lower than most commentators had predicted. Two consecutive quarters of contraction (illogicially known as “negative growth”) is defined as a recession.

Speaking in Canberra today, Treasurer Wayne Swan said the decline was to be expected but that Australia was cushioned to some extent from the global financial crisis by its stronger financial system.

Swan also argued that an increase in household savings in the quarter was a result of the 3% reduction in interest rates which had led to consumers paying down debt and restructuring their finances. [Read more…]

Rudd Announces $42 Billion Stimulus Package

The Prime Minister, Kevin Rudd, has announced a new package of measures worth $42 billion to stimulate the economy.

At a press conference in Canberra, Rudd announced a series of direct payments to individuals and families, coupled with a program of infrastructure funding for housing and schools.

A home insulation program will be introduced, as will a program of new and upgraded buildings in schools, to be called Building the Education Revolution. A $950.00 one-off cash bonus will be provided to support jobs. There will be a black spots, boom gates, regional roads and community infrastructure program.

Full details of the stimulus package are shown below.

  • Listen to Rudd’s press conference (29m – transcript below)
  • Watch an extract of Rudd’s press conference (3m)

Text of statement released by Prime Minister Kevin Rudd.

$42 billion nation building and jobs plan

The Rudd Government today announced a $42 billion Nation Building and Jobs Plan to support jobs and invest in future long term economic growth. [Read more…]