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Australia's Economic Management of the Global Financial Crisis

Updated: Jul 17, 2022

Journalist Alan Austin has provided the friendlyjordies team with a database of 160 experts testimonies and quotes regarding Australia's economic management during the Global Financial Crisis (GFC).

Former Prime Minister, Kevin Rudd, with the text "Australia's Management of the Global Financial Crisis" in the foreground in front of a background of an image of the Australian continent overlaid with financial graphs.

According to Mr. Austin:

"The most pervasive and destructive myth in Australian politics is that Labor cannot manage the economy. It is actually the opposite of the truth, as economic outcomes over recent decades clearly prove. The problem, of course, is that most of Australia’s media do not report the economy accurately. They routinely ignore critical outcomes inconsistent with their narrative, concoct ‘information’ which is not true, and distort much that is true.
As a resource to combat this misinformation, Friendlyjordies presents the testimony of impartial observers on how Australia’s Rudd and Gillard Labor Governments from 2008 to 2013 managed the global financial crisis (GFC) – the worst economic downturn since the 1930s – and thereby generated the world’s best-performed economy."

These 160+ economists, global leaders, peak bodies and other commentators are independent of Australian political parties. You can click on the name of each person for the original source document.

160 Experts Agree: Australia’s Labor Government managed the Global Financial Crisis (GFC) best in the world

“Australia has navigated the global recession brilliantly. It's interesting how surprised people have been about the Australian performance, but there's no other developed country that's done half as well. If you made a list of the developed countries that have done well in this recession, Australia is at the top, and then – well, it's not a very long list, because everyone else is in recession.”

~ Anirvan Banerji, Economic Cycle Research Institute, New York, September 2009


“Australia is the only developed country to avoid recession. It is a unique achievement in the midst of the sharpest global downturn since the Great Depression of the 1930s.”

~ Justin Lin, Chief Eonomist, World Bank


“Kevin Rudd realized that it was important to act early, with money that would be spent quickly, but that there was a risk that the crisis would not be over soon. So the first part of the stimulus was cash grants, followed by investments, which would take longer to put into place. Rudd’s stimulus worked: Australia had the shortest and shallowest of recessions of all the advanced industrial countries.” ~ Professor Joseph Stiglitz, Colombia University, Nobel Prize winner


“International financial institutions strongly endorsed Australia's response to the GFC. IMF commended the 'quick implementation of targeted and temporary fiscal stimulus'. The OECD concluded that Australia's fiscal stimulus package 'was among the most effective'. It attributed this to both the size of the stimulus measures and the speed with which it was introduced.”

~ Professor Stephen Martin, CEDA chief executive, Vienna, March 2012


“It’s now been 25 years since Australia had a recession. We came damn close in 2009 but avoided one thanks to the timely actions of the Reserve Bank, Kevin Rudd and Wayne Swan. We like to bag our politicians, but a quarter century without knowing the misery, the dislocation and waste of human life that comes from high unemployment is something to be very proud of.”

~ Bernard Keane, Crikey senior politics reporter


“Australia's high level of political stability and governance is maintained, which supports the country's attractive business climate ... Australia has remained one of the strongest performing economies in the AAA universe since the global financial crisis began”.

~ Fitch credit rating agency, London and New York, March 2013


“Labor returned to government in 2007 and saw Australia through the Great Financial Crisis without a recession. Prime minister Kevin Rudd and treasurer Wayne Swan immediately announced a $10.4 billion stimulus package when the financial crash took hold, followed by another $42 billion when it became obvious how deep the crisis was.

They saved the country. Australia was the only developed nation not to go into recession during the global financial crisis.”

~ Pádraig Collins, economics writer, Irish Times, July 2017


“We had decided that this financial crisis was far deeper than people had imagined it to be, that there had to be coordinated international action to deal with it ... which eventually became the G20. Kevin [Rudd] was absolutely central to these discussions.”

~ Gordon Brown, UK prime minister (video, 34 mins 35 secs)


“The Australian government led the world with its response to the crisis. What happened in Britain was we lurched to austerity, the American's lost impetus and only Australia carried on. I don't think there is any doubt internationally. "

~ Ed Balls, UK Minister for Financial Services


“This was the prime minister of Australia, a long ways away coming into my office and wanting to have a serious discussion. And he [Kevin Rudd] understood not just the politics. He understood the economics.” ~ Henry Paulson, US Treasury secretary 2006-09, the man at the epicentre of the GFC (video, 28 mins 05 secs)


“I think Prime Minister Rudd is incredibly, is A+ on these issues. If we did what he advised [in 2008], we'd all be in a better place.”

~ Timothy Geithner, US Treasury secretary, 2009-13


“I think it is extremely likely that he [Kevin Rudd] was better prepared for this stuff than any political leader anywhere else in the world ... We went for weeks, when the Australian banks ... were simply unable to get hold of the funds to lend to the Australian household sector to continue with mortgage lending ...

“The best thing to do was to make sure you got cash in the hands of households as soon as you possibly could. And it couldn’t be a small amount of cash. I did say ‘Go early, go hard, go households’.

“At the end of the day, somebody has to make the judgements. In the political system we have, that person has to be the prime minister. I said to Kevin subsequently that I thought his instincts were better than mine. And I still think that.”

~ Dr Ken Henry, Australian Treasury secretary through the GFC (video, 36 mins 10 secs/39 mins 50 secs/40 mins 35 secs)


“Too few of the people blathering on about the stimulus spending understand that need for compromise and the clever way Rudd and Treasurer Wayne Swan tackled it ... Many people believe most of the stimulus spending has gone on ‘cash splashes’. In truth, cash bonuses account for only $22 billion, a third of the $67 billion, with capital works and infrastructure accounting for most of the rest. So it is not surprising that, in the Organisation for Economic Co-operation and Development's review of the stimulus applied by the developed countries, it judged Australia’s efforts as among the most effective.”

~ Ross Gittins, Economics Writer


“Down Under was the only developed country to avoid technical recession. The stock market has bounced back almost 30 percent since mid-July. And housing? Home prices are actually higher now than in the summer of 2007 ... Americans, Europeans and Japanese watched, enviously. Not only did the Aussies have the easiest time during the recession; they were the first to escape.”

~ Phil Dobbie, Economics Commentator, October 2009


“Interestingly, the ranking by median wealth is slightly different, favoring countries with lower levels of wealth inequality. As was the case last year, Australia tops the table by a considerable margin, with Japan, Italy, Belgium, and the UK [coming next].”


“Australia, famously, was virtually alone among International Monetary Fund advanced economies in not experiencing a recession during this period, and had the strongest growth of any of these economies in 2009. This performance merits examination for what it can tell us about the contribution policy decisions made to this outperformance.”

~ Chris Barrett, Former Australian Ambassador to the OECD


“The Australian economy has weathered the storm that followed the global financial crisis (GFC) better than most other OECD countries. The reasons for this are complex, although the fiscal stimulus measures introduced by the federal government in 2008 and 2009 boosted domestic consumption and investment and helped to sustain economic growth.”

~ Peter Saunders, Faculty of Arts and Social Sciences, UNSW Sydney

~ Melissa Wong, Social Policy Research Centre, UNSW Sydney


“Australia’s economy grew in the first quarter 2009, defying a global slowdown to become one of the few developed nations to have sidestepped a technical recession. In the second quarter the nation’s economy grew significantly, reducing any threat of recession. GDP grew at the fastest pace, 0.6 percent, among the globe’s thirty-three advanced economies.”

~ Jerry Martin Rosenberg, The Concise Encyclopedia of the Great Recession 2007-2012


“We are convinced that the stimulus package was the major factor in keeping Australia out of a recession. The package was very well organised, very well planned. The timing was really good.”

~ Raja Junankar, Professorial Fellow in Economics, University of New South Wales


“By any standard, the GFC was a remarkable episode in Australian public policy. The sheer scale of the crisis response moves that were made continues to impress ... These were audacious moves, outright ‘policy gambles’ under conditions of radical uncertainty.”

~ Stephen Bell and Paul ‘t Hart, Utrecht University, the Netherlands


“Of developed economies around the world, Australia has emerged as amongst the least affected by the global financial crisis. March quarter 2009 GDP growth of 0.4 percent suggested that Australia had largely escaped the world-wide recession.”

~ Kevin Davis, Professor of Finance, University of Melbourne

~ Christine Brown, Associate Professor of Finance, University of Melbourne


“The Australian Government acted quickly in response to the global financial crisis by stimulating spending and acting to restore confidence in the financial markets ... The fact that Australia is the only one of 33 OECD countries which averted a recession is testimony to the success of the stimulus initiative.”

~ Christopher Bajada, Associate Professor of Economics, University of Technology, Sydney

~ Rowan Trayler, Senior Lecturer, School of Finance and Economics, University of Technology Sydney


“Even though many countries moved quickly to enact large fiscal stimulus packages, these packages generally have not had a strong effect in cushioning the initial decline in employment caused by the crisis, although Australia is a notable exception.”

~ John Martin, OECD Employment Director, Paris, September 2009


“The Australian case demonstrates the significant political power of crisis framing and how, when harnessed well, crisis could be wind in the sails of the government ... As the crisis continues to demolish the political capital of Western governments, their leaders can only look upon Kevin Rudd with envy.”

~ Matthew Laing and Karen Tindall, Economics Researchers, Australian National University


“Australia’s response to the global financial crisis was among the best in the world. We were one of the few developed countries to avoid recession.”

~ Andrew Wear, Australian Financial Review


“The great merit of the (Labor) government was to adopt a strongly counter-cyclical fiscal policy stance. The fiscal expansion that started in 2008 was the right move at the right time … There are simply no empirical foundations to the statement that Rudd and Gillard mismanaged the economy. In fact, the data tell exactly the opposite story.”

~ Fabrizio Carmignani, University of Glasgow

~ Graham White, Associate Professor, School of Economics, University of Sydney


“The Australian response to the [2008 global financial] crisis was well-judged and highly successful. It’s depressing, though understandable, that the Australian public doesn’t realise what a good job was done and what a bullet we dodged.”

~ Professor John Quiggin, School of Economics, Queensland University


“Moreover, just as the severity and simultaneity of the global downturn was unprecedented, so was the speed and strength of the policy response. The economy appears to be weathering a very large storm pretty well, and the community’s confidence about the future has improved commensurately.”

~ Glenn Stevens, Governor of Australia’s Reserve Bank, 14 August 2009


“Regardless of how uniquely conducive the circumstances were, Australia’s response to the global financial turbulence was a remarkable episode in economic policy history. The sheer scale of the crisis response cannot fail to impress ... These were audacious moves under conditions of radical uncertainty.”

~ Alan Fenna, Professor of Politics, Curtin University

~ Paul ‘t Hart, Professor of Public Administration, Utrecht School of Governance


“The fiscal stimulus has clearly helped. Australia went hard and went early and put resources in the right places. As a result, Australia was the only advanced country to have reported positive through-the-year growth to June 2009. It's no wonder the international commentators have been talking about Australia's ‘miracle economy' going from ‘down under to down wonder’.”

~ Tim Harcourt, Australian Trade Commission Economist

“Who would have thought it? The nation Paul Keating dubbed ‘the arse end of the world’ has the rest of the West green with envy. As the New Year approaches, we are basking in glory as the wonder from Down Under, the Aussie miracle, the nation that rode out the GFC without a recession, the number one performer among the world's advanced economies.”

~ Stephen Long, ABC News Economics Writer, 23 December 2009


“While European countries implemented austerity measures worsening social conditions of their population and pushing the economy into a fallacious fiscal adjustment, the prompt reaction of the Australian government limited the possible negative effects caused by the macroeconomic shock and favoured the process of economic recovery.”

~ Dr Bruno Martorano, University of Florence, 2012


“I look at Australia as a model that others can follow. The many reforms that you have taken on in the last 20 years have paid off. This is a recovery but there are still frailties and there is still the risk of unemployment that we need to be concerned about.”

~ Juan Jose Daboub, World Bank Managing Director, November 2009


“I am very much impressed with the resilience of the Australian economy. We should be learning from Australia."

~ Christine Lagarde, Finance Minister of France, September 2009


“During the global financial crisis, Australia suffered from plummeting demand for its products. But a nicely designed fiscal stimulus ... helped the country regain its footing rapidly and avoid the mass economic pain found in so much of the world.

~ Neil Irwin, Senior Economics Correspondent, The New York Times

“Australia was one of a handful of OECD economies that did not experience a major breakdown in its financial institutions and avoided an economic recession during and after the crisis. Dodging the danger, the economy managed to maintain its remarkable run of continuous economic growth.”

~ Andrew Hindmoor, Professor of Politics, University of Sheffield, UK

~ Stephen Bell, Professor of Economics at Park University, Missouri, USA


“Australia provides an intriguing case study in relation to the global financial crisis. At first sight, at least, Australia appears to have withstood the crisis remarkably well, living up to its famous description as ‘the lucky country.’ This has been the source of numerous laudatory statements by government officials and others throughout the global financial crisis.”

~ Eilís Ferran, University of Cambridge,

~ Niamh Moloney, London School of Economics and Political Science

~ Jennifer G. Hill, University of Sydney

~ John C. Coffee Jr, Professor of Law, Columbia Law School


“It is greatly to the credit of Kevin Rudd, Treasurer Wayne Swan and Treasury head Ken Henry that they threw out the neoliberal rule book and reverted to classic Keynes. They spent, and they did it by putting money directly in struggling peoples’ bank accounts and by investing in infrastructure. They ran up the Government deficit. They guaranteed bank deposits. It worked. There were no bank runs or failures. People were reassured and continued to spend. GDP growth paused, then resumed.”

~ Dr Geoff Davies, Scientist and Commentator


“Advising Rudd and Swan, Henry argued for a ‘timely, targeted and temporary’ discretionary fiscal stimulus. He believed cash handouts were superior to tax cuts, which then-opposition leader Malcolm Turnbull pushed for and would have been permanent and leaked billions of dollars more from the budget for years to come, Henry argued.

Henry conducted a series of power point presentations during Sunday, examining potential stimulus measures. Rudd interrogated him, as they looked at the components of GDP – consumption, business investment, government spending and net exports. Swan says the big question was whether the government could get the cash out the door to consumers before the crucial Christmas holiday period.

‘We were absolutely fearful if we had a bad Christmas, that could be disastrous for confidence,’ Swan says. Two days later on Tuesday October 14, Rudd and Swan – by then back in Australia – unveiled the $10.4 billion ‘economic security strategy’.”

~ John Kehoe, Economics Editor, Australian Financial Review


“Wayne Swan has chalked up the award that eluded Peter Costello for his almost 12 years as Australia's treasurer. He will be recognised today by Euromoney magazine as 2011's finance minister of the year ... The magazine said Mr Swan had presided over the best economy in the developed world, citing record low unemployment of 5.3 per cent, economic growth of 5 per cent since the GFC, a rise in the pension and tax cuts, all while keeping debt at 7.2 per cent of GDP compared to the G7 average of 80 per cent. ‘Australia's position within the global financial community has never been stronger than it is today,’ the magazine wrote.”

~ Simon Benson, The Daily Telegraph, September 2011


“He [Wayne Swan] was credited with the correct strategy during the global financial crisis of 2007-08. The magazine [Euromoney] applauded his ‘swift response to stimulate the economy’ despite ‘strong opposition at home’ and said he had ‘succeeded in getting most of the important decisions right'. These include putting in place an exit strategy for the stimulus and sticking to it, imposing a fiscal discipline that many other finance ministers refused to adopt.”

~ Malcolm Farr, Veteran Australian Journalist


“[Australia’s treasurer Wayne] Swan receives his award for his careful stewardship of Australia’s finances and economic performance both during and since the global financial crisis. Throughout that time, Australia has not only avoided falling into recession, but has been the best performing of the world’s developed market economies ... Australia’s position within the global community has never been stronger than it is today.”

~ Euromoney, London, September 2011


“Wayne Swan was right to accept the [world's best treasurer] award on behalf of all Australians. He is the captain of the team ... We are following the right strategy, and we had luck on our side”.

~ James Craig, CommSec Chief Economist


“Wayne Swan has won the prestigious global award of Finance Minister of the Year.

The only other Australian Treasurer to win the title from Euromoney magazine was Paul Keating in 1984, when he was dubbed the ‘world's greatest treasurer’ by Bob Hawke. Euromoney said he won for his ‘swift response’ to stop Australia falling into recession amid the global financial crisis and for maintaining one of the world's best-performing economies.”

~ Phillip Hudson, Journalist, The Advertiser

~ Stephen McMaho, Journalist, The Advertiser


“This award is a significant and deserved honour which strengthens Mr Swan's global influence.”

~ Robert Zoellick, World Bank President


“Last night, Mr Swan was named as the Euromoney Finance Minister of the Year for 2011 and will receive his award at a ceremony in Washington on Sunday at a meeting of the International Monetary Fund ... The award is the first piece of good news for the Gillard government for some time and vindicates the economic argument it has been trying to make that Australia is faring better than the rest of the world ...”

~ Phillip Coorey, The Australian Financial Review


“The decisions that Swan has made as treasurer, before during and after the global financial crisis was officially over certainly contributed to Australia’s good records. If Australia’s performance had been as bad as other economies, Swan would have certainly copped the blame for it. So the fact that we avoided dashing ourselves on the rocks, he’s entitled to claim some of the credit.”

~ Saul Eslake, Program Director, Grattan Institute


“I hear good things about the way Australia is being run and running. Your financial genius just got a nice award. He was voted the best [treasurer] in the world at this time.”

~ Donald Trump, American Property Developer, now former US President, 2011


“If the number [first quarter GDP growth, 2009] had been negative, it would have provoked a great media outcry and a hundred iterations of the headline - It's official: Australia in recession. Malcolm Turnbull would have had to muster all his thespian powers to try to look worried in front of the cameras, while his inner politician was hooting with glee and punching the air. Yet it would have been the most ordinary of events. Every other developed country was firmly in recession by the end of March. Australia would merely have been catching up. Instead, something quite extraordinary happened. Australia outperformed the world.”

~ Peter Hartcher, Sydney Morning Herald, September 2009

“Swan was Australia's treasurer when the GFC wave spread around the world in 2008. Australia famously avoided the worst of it, thanks in part the fiscal and monetary policies of the then government and the Reserve Bank.”

~ Eoin Blackwell, Huffington Post Analyst


“Labor recorded a deficit in 2009, reflecting the global financial crisis. Anyone with a modicum of knowledge of economics would recognise that the Rudd government employed the Keynesian strategy of increasing spending to maintain employment and boost demand. True, that led to a series of deficits. It also saved Australia from recession.”

~ Dr Bob Walker, Emeritus Professor of Accounting, University of Sydney

~ Dr Betty Con Walker, Former Australian Treasury economist


“Fiscal stimulus in Australia in my view was absolutely necessary and was a critical factor behind Australia's good economic outcomes. While one can argue about the exact nature of the implementation, the fact that it was designed to take effect quickly was vital in the circumstances: ‘go hard, go early, go to households’ as Ken Henry put it.”

~ Guy Debelle, Deputy Reserve Bank governor, appointed by Tony Abbott in 2016


“The authorities' timely and significant macro-policy response cushioned the domestic impact of the global financial crisis. Staff commended the quick implementation of fiscal stimulus and noted that the shift into deficit was justified in current circumstances.”


“As a tool of economic policy, the stimulus worked. Although other factors ... were also important, the stimulus played a central role in making sure that Australia suffered less of a downturn than most other developed countries.”

~ Rodney Tiffen, Emeritus Professor, Sydney University


“Although some of the details of these fiscal stimulus packages have since been the subject of domestic political criticism, international organizations such as the International Monetary Fund and the Organisation for Economic Co-Operation and Development have praised Canberra’s response.”

~ Mark Thirlwell, Lowy Institute Policy Director


“The OECD concluded that the effectiveness of our stimulus was due to both the size of its measures and the speed with which they were introduced. The targeting of households and schools (on which work can be undertaken rapidly) also contributed to the speed of its effect. So it seems the design of the stimulus is critical.”

~ Christopher Stone, Research Director, Centre for Policy Development


“Is it a waste if people use the stimulus money to pay down debt instead of rushing to the shop? No, it's a helpful step because it allows people to repair their personal finances so they are closer to being able to start spending again. Much of the money is still working its way through the economy. In other words, the money was well timed and was indeed offsetting the downturn.”

~ Tony Meer, Deutsche Bank Chief Economist


“Having a surplus does not actually do anything to spur economic growth, it is what you spend the money on that does it ... Had the stimulus measures been poorly targeted, no amount of surplus would have helped. And the reality is the stimulus measures worked pretty much as they were expected to ... you had Australia’s economy continuing to grow while the rest of the world was on the floor wondering if anyone got the number of the truck that had just hit it.”

~ Greg Jericho, Economics Analyst, The Guardian, June 2016


“Interestingly, the ranking by median wealth per adult is slightly different, favoring countries with lower levels of wealth inequality. Australia (US$220,000) tops the list again this year, with only Luxembourg ($183,000) in close contention.”


“The Organisation for Economic Co-operation and Development's annual employment outlook says Australia will be one of the Western countries to suffer least in the global financial crisis. And it says the Government's stimulus has already had a strong effect in cushioning the downturn, undermining Opposition attacks on the size of the program.”

~ Tim Colebatch, Economics Writer, The Age, The Sydney Morning Herald


“The stimulus package announced last year did the trick in lifting consumer spending and would probably ensure fourth-quarter gross domestic product remained positive. It proves that those sorts of cash payments do help the economy.”

~ Shane Oliver, AMP Capital Investors Chief Economist


“The improvement in key indices such as employment and sales expectations is a sign that the economic stimulus has been successful in encouraging household spending.”

~ Christine Christian, CEO, Dun & Bradstreet Australia and New Zealand


“The success which the Government's stimulus package has achieved in boosting confidence will be a lesson to other governments … The key is not the direct impact of increasing spending capacity … The key is to restore confidence”.

~ Bill Evans, Chief Economist, Westpac


“The Australian Treasury estimates that without the stimulus packages the unemployment rate would have been forecast to peak at 10 per cent rather than 8½ per cent. With the stimulus, there are estimated to be up to 210,000 more people with jobs.”

~ Dr Steven Kennedy, Treasury General Manager, June 2009


“The Treasury's analysis of the Government's recent policy action indicates that, absent the fiscal stimulus, household consumption would have remained below its level of the middle of last year until late this year. The stimulus is expected to hold household consumption above its level of the middle of last year.”

~ Nigel Ray, Treasury Deputy Secretary, March 2009


“Unlike the major economies at the centre of the GFC, Australia weathered the main crisis period in relatively good shape. At a time when the major advanced economies experienced their deepest recessions since the 1930s as well as widespread financial failures, the Australian economy avoided a recession and did not experience a crisis of solvency in its financial system.”

~ Malcolm Edey, University of Sydney, April 2021


“The Australian Government acted quickly in the second half of 2008 to lessen the impact of the GFC on the Australian economy. It took a number of strategic steps. First, it guaranteed deposits held by deposit taking institutions to reassure depositors of the security of their funds. Second, to alleviate the contraction in private spending, the Government introduced an initial stimulus package of $10.4 billion in October 2008.”

~ Jenny Chesters, Research School of Economics, Australian National University


“This first stage of the Government’s stimulus package, the Economic Security Strategy, was valued at $10.4 billion, and [implemented] with efficiency ... By providing an immediate boost to consumption, the Government gave themselves enough time to devise and implement long-term stimulus and infrastructure policies, whilst also securing the funding for such policies through the sale of treasury notes and other Government securities.”

~ John (Sean) Graham, University of Sydney, October 2017


“The global stock market fall in January 2008 saw the large banks experience a significant increase in systematic risk ... Thus in respect to our key area of interest, the Deposit and Wholesale Funding Guarantee scheme, the empirical findings of an overall decrease in systematic and systemic risk for all Australian banks suggest that the scheme largely achieved its objectives.”

~ Bernard Bollen, UNE Business School, University of New England ~ Michael Skully, Monash University

~ David Tripe, Massey University, New Zealand

~ Xiaoting Wei, Monash University


“By 2011, three years after the financial crisis was most acute, American unemployment was still 9 per cent and Europe was in the thick of a major debt crisis. Australia was in decent shape. Terms of trade were at a record high and the unemployment rate was just fractions of a per cent above 2007 levels.”

~ Jason Murphy, CPA Australia


“The Australian policy response appears to have been an important contributor to the outperformance of the Australian economy during the downturn. Rapid and large monetary and fiscal policy stimulus played a critical role in increasing effective demand and the early recovery of consumer and business confidence in Australia.”

~ Steve Morling, Australia’s Treasury

~ Tony McDonald, Australia’s Treasury


“The Government’s well-coordinated response to the global financial crisis included adopting significant legislative changes in October 2008 to put in place guarantee arrangements for retail deposits, among other enhancements to the financial safety net and crisis management framework.”

~ International Monetary Fund report, Washington, November 2012


“The impacts of the GFC and the economic downturn were smaller for Australia than for other advanced economies, for example, the immediate decline in house prices was for a shorter duration compared to the United States. The Australian government and the Reserve Bank of Australia (RBA) implemented policy responses to ensure that the Australian economy did not suffer a major downturn.”


“Australia survived the financial crisis without a recession because of two factors—the pre-crisis strength of its financial position and soundness of its banks; and the speed with which monetary and fiscal action was taken when the crisis hit.”

~ Paul Kelly, Veteran Australian Journalist


“There is now little doubt the combined effect of the stimulus measures and lower interest rates have been more effective in boosting spending and confidence than even optimists had hoped”.

~ Richard Gibbs, Macquarie Group economist


“Certainly the Chamber was seeking a major stimulus package in the order of 2 per cent of GDP and from what we understand from this package it is in that order.”

~ Greg Evans, Australian Chamber of Commerce and Industry


“Australia’s strong economic performance during the GFC can be attributed to the Government’s stimulus measures, a sound and liquid banking system and not least China’s robust demand for energy and minerals imported from Australia.”

~ Michael Priestley, Economics Section, Parliament of Australia


“... the Rudd Government went for the dash for cash, which ordinarily I would be critical of, but with a serious recession beckoning the instant gratification approach looks to have worked here. The economics team at Citigroup now thinks the Oz economy will actually grow in 2009 by 0.25 per cent ... they are positive numbers in a global sea of negativity.”

~ Peter Switzer, Finance Consultant


“The largest component of the investment spending, the school-based infrastructure spending, has a number of elements to enable speedy construction. School land is available immediately without the need for planning approval; hence no planning delays. Further, schools chose from standard designs rather than developing their own, to speed up construction. School-based infrastructure spending has the advantage of providing stimulus to almost every population area of the country; useful because the economic slowdown was expected to be geographically widespread. Finally, school infrastructure projects have low import content, which raises the domestic stimulatory impact.”

~ David Gruen, Senior Economist, Australian Treasury


“The stimulus package targets consumer spending, which is absolutely critical to our near-term economic prospects, and boosts capital expenditure – looming as one of the real casualties.” ~ Heather Ridout, Australian Industry Group Chief Executive, February 2009


“The Labor government deserves the credit for Australia being only one of three OECD economies to avoid recession when the global financial crisis struck. But they have never cashed in properly on this achievement. Swan personally deserves this honour for his diligence in craftily using the intellectual firepower of the Federal Treasury. He followed former Treasury Secretary Ken Henry’s advice to ‘go early, go hard, go household’. It was clockwork Keynesianism.”

~ Alex Millmow, Senior Lecturer in Economics, Federation University Australia


“The Commonwealth Treasury studied the resilience of the Australian economy during the GFC in a report in September 2011. The report found it was the combination of lowering interest rates and the fiscal stimulus that maintained the Australian economy through the GFC.”


“The Reserve Bank minutes released yesterday say not only that the stimulus measures supported growth over the past 18 months ... The minutes back the assertion in the open letter (signed by 50 economists) that the stimulus package boosted industry and created thousands of jobs, saving Australia from recession.”

~ Peter Martin, Economics Analyst, August 2010

Open Letter of 65+ Australian Academics Convinced that the Labor Government Prevented Australia Entering Recession during GFC

An Open Letter, pre-election, 16 August 2010

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment. Unlike most OECD economies we have come out of the Global Financial Crisis and the subsequent world recession with only one quarter of negative GDP growth and a smaller increase in unemployment.

We note that during a recession automatic stabilizers (increase in total unemployment benefit payments and decreased tax revenues) lead to an increased government budget deficit. In almost all the OECD countries there has been a massive increase in unemployment and in budget deficits. In Australia both have been trivial by comparison.

The Government Fiscal Stimulus package that was introduced was carefully crafted and implemented in a clever sequence. The first stage, the payment of $900 to most households, helped to boost confidence in the retail industry.

The second stage of the stimulus package (the Building Education Revolution, and the First Home Owners Grant) boosted the construction industry and created thousands of new jobs. Besides the employment effect, it also provided a much needed increase in the stock of public capital (better and greener homes, better schools) and prevented a sudden fall in house prices ...

Just as a major corporation goes into debt to invest in its stock of capital, so does a government. Just as many householders have a debt to a bank or mortgage company, so does a government. A government has a budget deficit and a government debt, but it also has capital assets (roads, ports, better equipped schools, Broadband, etc.).

The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.

We hope that the economic achievements of the Australian Labor Government will be recognized by the population.

Name Position Institution

P.N. (Raja) Junankar Emeritus Professor UWS, UNSW, and IZA

G. C. Harcourt Emeritus Professor UNSW and Jesus College, Cambridge

Peter Kriesler Associate Professor UNSW

John Nevile Emeritus Professor UNSW

George Argyrous Senior Lecturer University Of New South Wales

Harry Bloch Professor Curtin University

Tony Bryant Associate Professor Macquarie University

John Buchanan Director Workplace Research, Sydney University

Jerry Courvisanos Associate Professor University of Ballarat

Mamta B Chowdhury Senior Lecturer University of Western Sydney

Barrie Dyster Senior Lecturer University Of New South Wales

Corrado Di Guilmi Research Fellow University of Technology

Geoff Dow Reader University of Queensland

Steve Dowrick Professor Australian National University

Chris Evans Professor University Of New South Wales

Peter E. Earl Associate Professor University of Queensland

Craig Freedman Associate Professor Macquarie University

Giuseppe Fontana Professor LUBS - University of Leeds

James Farrell Senior Lecturer University of Western Sydney

Roy Green Dean University of Technology

Boyd Hunter Associate Professor The Australian National University

Joseph Halevi Senior Lecturer University of Sydney

Neil Hart Senior Lecturer University of Western Sydney

Sasha Holley PhD student University of Sydney

Michael Johnson Associate Professor University Of New South Wales

Steve Keen Associate Professor University of Western Sydney

Bill Lucarelli Senior Lecturer University of Western Sydney

Bruce Littleboy Senior Lecturer University of Queensland

Marc Lombard Senior Lecturer Macquarie University

Elisabetta Magnani Associate Professor University Of New South Wales

Fiona Martin Senior Lecturer University Of New South Wales

Girijasankar Mallik Senior Lecturer University of Western Sydney

Robert Marks Visiting Professor University Of New South Wales

Stephane Mahuteau Senior Lecturer Macquarie University

Eddie Oczkowski Professor Charles Sturt University

Brian Pinkstone Associate Professor University of Western Sydney

John Quiggin Fellow University of Queensland

B. Bhaskara (Bill) Rao Professor University of Western Sydney

Colin Richardson Visiting Professor Imperial College, London

Tim Robinson Professor University of Technology

Frank Stilwell Professor University of Sydney

Ingrid Schraner Senior Lecturer University of Western Sydney

Michael Schneider Honorary Fellow La Trobe University

Ruhul Salim Associate Professor Curtin University

Chris Terry Associate Professor University of Technology

David Throsby Professor of Economics Macquarie University

Tim Thornton Associate Lecturer La Trobe University

Phillip Toner Senior Research Fellow University of Western Sydney

Roger Tonkin Lecturer Macquarie University

Sean Turnell Senior Lecturer Macquarie University

Michael White Senior Lecturer Monash university

Other Signatories

James Arvanitakis Lecturer University of Western Sydney

Nixon Apple Economic Advisor Aust. Manufacturing Workers Union

Grant Belchamber Economist ACTU

Ross Buckley Professor of Finance Law University Of New South Wales

Brad Crofts National Economist Australian Workers' Union

Rajinder Cullinan Accountant University Of New South Wales

Sandra Egger Associate Professor University of New South Wales

Rolf Gerritsen Professor Charles Darwin University

Alan Morris Senior Lecturer University Of New South Wales

George McFarlane Retired Consultant Sanders & Associates Pty Ltd

Gillian Moon Senior Lecturer University Of New South Wales

John Milfull Emeritus Professor University Of New South Wales

J. F. Pixley Senior Research Fellow Macquarie University

Ben Spies-Butcher Lecturer Macquarie University

Peter Sheldon Associate Professor University Of New South Wales

Sources & Further Reading

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Great and very useful compilation Alan & Jordies. Love you work.

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