No one needs to be told that we in Australia are entering a serious recession due to the world financial crisis. Few need reminding that the crisis was generated in the USA, by unfettered free markets reinforced by the sanctity of the profit motive and sheer greed within the business sector.
We now have a worldwide crisis from which Australia is not immune. We face the spectre of two years of declining production and trade, and rising levels of unemployment. Few would disagree that we need a process of economic revival to address the worst impacts of recession. The question is what form the stimulus should take.
To address this we need to move beyond blaming greedy bankers and businessmen for the recession. It takes two to tango. We need to look at other factors too, in particular profligate consumption and minimally controlled consumer credit. That factor is as much apparent in Australia as subprime housing loans were in the USA.
The decade of growth that Australia experienced prior to the current crisis was fed by a consumption frenzy. Consider the growth in 'McMansions', household goods, must-have fashion, SUVs and more. This was fed in turn by an almost subprime credit system — no deposit, no interest, no repayments for two years. It was all about growth in employment, production, trade, storage, transport, and retail of consumer goods.
All of this at a time when we have seen a substantial crisis in our health system, a deficit of doctors, nurses and other medical staff, problems in education and training from pre-school through to university, a decline in public and affordable housing, unacceptable growth in homelessness, and an unsustainable decline in infrastructure including roads, railways, communications and other social infrastructure related to our health and wellbeing.
So while the recession is, on the one hand, a harbinger of pain and suffering for large numbers of Australians, at the same time it is an opportunity to address serious problems that have arisen in the past and to ensure our future wellbeing.
In that regard, the Government should be congratulated on its multi-billion dollar infrastructure spending program, the largest feature of which is its National Broadband Network announced yesterday. It will likely cost in excess of $40 billion but will have long-term benefits for manufacturing, trade, business, employment, education, health, and many other areas.
The broadband strategy may have arrived a few years late, but the