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).
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].”
~ Credit Suisse Global Wealth Report, November 2012
“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."