An Open Letter

We the undersigned economists are convinced by the evidence that the coordinated policies of theAustralian Labor Government have prevented the Australian economy from a deep recession andprevented a massive increase in unemployment. Unlike most OECD economies we have come out of theGlobal Financial Crisis and the subsequent world recession with only one quarter of negative GDPgrowth and a smaller increase in unemployment.We note that during a recession automatic stabilizers (increase in total unemployment benefit paymentsand decreased tax revenues) lead to an increased government budget deficit. In almost all the OECDcountries there has been a massive increase in unemployment and in budget deficits. In Australia bothhave been trivial by comparison.The Government Fiscal Stimulus package that was introduced was carefully crafted and implemented in aclever sequence. The first stage, the payment of $900 to most households, helped to boost confidence inthe retail industry.The second stage of the stimulus package (the Building Education Revolution, and the First HomeOwners Grant) boosted the construction industry and created thousands of new jobs. Besides theemployment effect, it also provided a much needed increase in the stock of public capital (better andgreener homes, better schools) and prevented a sudden fall in house prices.The last stage of the fiscal stimulus package (as it takes time to prepare plans etc.) was the infrastructureprogram that increased employment as well as increasing the stock of public capital and helping toovercome the significant short fall in Australian public infrastructure, and hence would increase futureproductivity, taxable capacity and the ability to repay public debt.Just as a major corporation goes into debt to invest in its stock of capital, so does a government. Just asmany householders have a debt to a bank or mortgage company, so does a government. A government hasa budget deficit and a government debt, but it also has capital assets (roads, ports, better equippedschools, 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-casedAustralia as a model economy.We hope that the economic achievements of the Australian Labor Government will be recognized by thepopulation.

Name Position Institution

P.N. (Raja) Junankar Emeritus Professor UWS, UNSW, and IZAG. C. Harcourt Emeritus Professor UNSW and Jesus College, CambridgePeter Kriesler Associate Professor UNSWJohn Nevile Emeritus Professor UNSW

George Argyrous Senior LecturerUniversity Of New SouthWalesHarry Bloch Professor Curtin UniversityTony Bryant Associate Professor Macquarie UniversityJohn BuchananDirector, Workplace ResearchCentre University of SydneyJerry Courvisanos Associate Professor University of BallaratMamta B Chowdhury Senior Lecturer University of Western SydneyBarrie Dyster Senior LecturerUniversity Of New SouthWalesCorrado Di Guilmi Post Doctoral Research Fellow University of TechnologyGeoff Dow Reader The University of QueenslandSteve Dowrick Professor Australian National UniversityChris Evans ProfessorUniversity Of New SouthWalesPeter E. Earl Associate Professor University of QueenslandCraig Freedman Associate Professor Macquarie UniversityGiuseppe FontanaProfessor of MonetaryEconomics LUBS - University of LeedsJames Farrell Senior Lecturer University of Western SydneyRoy Green Dean, Faculty of Business University of TechnologyBoyd HunterAssociate Professor/SeniorFellowThe Australian NationalUniversityJoseph Halevi Senior Lecturer University of SydneyNeil Hart Senior Lecturer University of Western SydneySasha Holley PhD student University of SydneyMichael Johnson Associate ProfessorUniversity Of New SouthWalesSteve Keen Associate Professor University of Western SydneyBill Lucarelli Senior Lecturer University of Western SydneyBruce Littleboy Senior Lecturer University of QueenslandMarc Lombard Senior Lecturer Macquarie UniversityElisabetta Magnani Associate ProfessorUniversity Of New SouthWalesFiona Martin Senior LecturerUniversity Of New SouthWalesGirijasankar Mallik Senior Lecturer University of Western SydneyRobert Marks Visiting ProfessorUniversity Of New SouthWalesStephane Mahuteau Senior Lecturer Macquarie University

Eddie Oczkowski Professor Charles Sturt UniversityBrian Pinkstone Associate Professor University of Western SydneyJohn QuigginAustralian Research CouncilFederation Fellow, University of QueenslandB. Bhaskara (Bill) Rao Professor University of Western SydneyColin RichardsonVisiting Professor of Economics Imperial College, LondonTim Robinson Professor University of TechnologyFrank Stilwell Professor of Political Economy University of SydneyIngrid Schraner Senior Lecturer University of Western SydneyMichael Schneider Honorary Fellow. La Trobe UniversityRuhul Salim Associate Professor Curtin UniversityChris Terry Associate Professor University of TechnologyDavid Throsby Professor of Economics Macquarie UniversityTim Thornton Associate Lecturer La TrobePhillip Toner Senior Research Fellow University of Western SydneyRoger Tonkin Lecturer Macquarie UniversitySean Turnell Senior Lecturer Macquarie UniversityMichael White Senior Lecturer Monash university

Other Signatories

James ArvanitakisLecturer, Centre for CulturalResearch University of Western SydneyNixon AppleIndustry and EconomicAdvisorAustralian ManufacturingWorkers UnionGrant Belchamber Economist ACTURoss BuckleyProfessor of InternationalFinance LawUniversity Of New SouthWalesBrad Crofts National Economist Australian Workers' UnionRajinder Cullinan Client Services AccountantUniversity Of New SouthWalesSandra Egger Associate ProfessorFaculty of Law, University of New South WalesRolf GerritsenProfessor, School for SocialPolicy and Research Charles Darwin UniversityAlan Morris Senior LecturerUniversity Of New SouthWalesGeorge McFarlane Retired Consultant, Sanders & Associates Pty LtdGillian Moon Senior LecturerUniversity Of New SouthWalesJohn Milfull Emeritus ProfessorUniversity Of New SouthWales