PM: Well, today we have met, the Treasurer and I, with former Secretary of State Madeleine Albright, who has been designated by the President-elect Barack Obama, as the representative to deal with incoming foreign heads of government.
We have just had a good and long conversation about the global financial crisis and other subjects.
I was able to reiterate our congratulations through Madeleine Albright to Senator Obama and his team on their recent election.
And also to reaffirm the fact that the Australian Government will work closely, very closely, with this incoming Obama Administration on the challenges that we now face around the world. Of course, principal among which is dealing with the global financial crisis.
It was a good meeting, a friendly meeting, it was a long meeting, and I've met, of course, Madeleine Albright on many occasions before.
President-elect Obama has designated Madeleine Albright as his representative in dealing with the range of incoming foreign delegations who are here for the G20 summit.
On the question of the challenges which lie ahead of us, it's quite clear from the Treasurer's recent discussions with his colleagues as G20 finance ministers, and more broadly, that the world faces grave economic challenges ahead.
In fact, every economy in the G7 has now experienced at least one quarter of negative economic growth. And of course, we've had recent developments in the case of the German economy as well.
Here in the United States, some 1.2 million jobs have been lost since January, and around the world the International Labour Organisation is forecasting that unemployment will rise to 210 million next year.
Therefore, we face a challenge as a global community. We face a global challenge. We as Governments of the world must engage in a global war against unemployment. This is a challenge for all of us. It affects growth, it affects jobs. It affects every community and economy around the world. And therefore, the need for government action in this most difficult time.
Turning ahead to the G20 Summit itself, it's quite plain that this meeting reflects the fact that a global crisis of this dimension requires a global solution.
We're all in this together, whether we are from the Asia-Pacific region, whether we are from Europe, whether we are from Latin America. The challenges are common challenges. No-one's economy is immune. No-one's labour forces are immune. No-one's financial systems are immune. We are in this together and together we need a common solution for the future.
That is why this decision to convene this meeting of the G20 heads of government is so important. This gathering of G20 economies represents some 85 per cent of global GDP. And together, we need to work against the challenges which now present themselves to us collectively.
What we need, of course, is to work on in the days ahead on how we stabilise financial systems around the world, the future shape of regulation for financial markets into the future, and what concerted actions government can and should take to support growth and to support jobs into the future.
Our challenge here in Washington as leaders of the major economies around the world is to put together the building blocks for the future. Building blocks on stabilising financial markets. Building blocks on better regulation for those markets for the future. And most critically, building blocks about government investment in growth and jobs at a time when the world is facing an impending global economic recession.
I'll take your questions.
JOURNALIST: Mr Rudd, would you like to see some kind of group fiscal strategy out of this meeting like it was seen on monetary policy a few weeks ago?
PM: The challenge all governments face now is to put together the building blocks for growth for the future. Right now we see the data emerging about this global economic recession. Therefore, governments must step into the breech here and now.
In Australia, we've taken early action in terms of our Economic Security Strategy. Some one percentage point of GDP - $10.4 billion. Globally need to see concerted, cooperative action by as many governments as possible around the world on using their budgets and monetary policy to support growth into the future.
The principles of that I'm sure we'll discuss as heads of government starting here in Washington in the next 24 hours and during the deliberations on Saturday. That, I believe, is critical for the future.
Let's call a spade a spade: this is a really tough time. This is going to take a long time to get through, there are no quick fixes. You can either stand, however, to one side and allow growth to plummet in the principal economies in the world and jobs to suffer as a result, or government can step in and government through Budget policy can support growth and jobs.
That is our view, reflected in what we have done in Australia. And I believe what you will see from governments around the world is an active deliberation on what we can now do together to support growth and jobs into the future through government investment.
JOURNALIST: Since you've announced your package, Mr Rudd, the figures that have come out have shown the economy is headed for a somewhat worse state, or at least a marginally worse state. Do you think it would be appropriate soon to augment your fiscal package and put a bit more into the economy?
PM: Michelle, we don't rule anything out for the future. And the reason is we are in unprecedented times. We are facing the world's worst global and financial crisis in three quarters of a century. We have taken early and decisive action on the guarantee to banks. Early and decisive action in the fiscal stimulus package of $10.4 billion. And we have also announced a $6.2 billion package for the auto industry in Australia as well.
As I have said from the beginning, we as a Government, however remain prepared to take whatever additional and further action that is necessary to support growth and jobs.
The alternative, which is government to stand to one side, is simply to see these numbers spiral out of control. We in Australia don't intend to do that. The Government has a role to play - we intend to play that role.
JOURNALIST: In terms of timing, how crucial is it in terms of timing there be the concerted action that you're calling for now, and what would delay mean? And secondly, when you keep saying ‘concerted action', are you hoping to walk out of here with an agreement whereby 20 countries will commit to do some action, be it a spending boost or working on availability of credit to sort of apply the paddles to the chest and go ‘pow' in an unprecedented way?
PM: Can you do the ‘pow' bit again? I've been distracted from the first part of your questions. I got the ‘pow' bit.
JOURNALIST: Timing.
PM: Timing, okay.
JOURNALIST: What happens if we don't do it now?
PM: Both the Treasurer's view and mine is that, frankly, every week, every month, which lies ahead, is critical. We in Australia have taken the view that it is absolutely important to be ahead of the curve here. You see, if you have an implosion in financial markets, which is what we have seen, the flow through impact which that has on the real economy, frankly, the economic history books are there to tell you what happens.
You can either sit around and wait for data to emerge, or act decisively. That's why we believe every week, every month, is important. Which is why we acted when we did, and remain prepared to take further action.
On the second point about the expectations of the G20 itself, a starting point, and I referred quite deliberately before to building blocks, is this - one of the building blocks is an agreement across heads of government about the need for coordinated fiscal and monetary policy stimulus against the actual dimensions of the decline in economic activity which has occurred off the back of the crisis.
We have a $60 trillion world economy. Some trillions of dollars have been sucked out already and prospectively because of this crisis.
The challenge, therefore, is who begins to plug the gap? If the private economy is under severe stress because of what's occurred in financial markets, government has a responsibility to act to assist to plug that gap. No single government can do that along. Governments acting cooperatively is the only way for3ward, and what we'll seek to do this weekend is to begin to assemble the building blocks of doing that.
Do you want to add to that, Wayne?
SWAN: Certainly, look, swift action of fiscal policy is absolutely critical in the current environment. That was recognised by finance ministers in Brazil. Indeed, this was recognised at the last meeting of the IMF.
When you are faced with a very strong slowdown in growth, swift action on fiscal policy is one of the most positive actions that you can take to prevent a damaging loss of output. Because at the end of the day, this is about protecting households, it's about protecting businesses. And the one thing that government can control and move very swiftly on is fiscal policy.
JOURNALIST: Are you guys here to stave off a depression collectively?
PM: Our challenge is to do everything humanly possible to support growth, and to support jobs. And the reason is we are facing the gravest global financial and economic crisis in three quarters of a century.
Therefore, you can stand to one side and wait for data to roll in, or you can act.
Furthermore, apart from national actions, and we'll be taking more, apart from national actions, the key challenge with these heads of government, representing 85 per cent of the global economy, is to take that action to the greatest extent possible, together. That is critical in terms of the real economy. It's equally critical in terms of confidence for the future as well.
SWAN: Just one other point, one size doesn't fit all. Not every country will have the same capacity to expand their fiscal policy. But together, if a number of nations act, that really carries great weight.
PM: I come back again to the power factor that our friend from the Oz was referring to before, think of the numbers - there's a $60 trillion global economy. Some trillions have been sucked out because of what's happened. That then flows through to jobs. The ILO's figure is some 210 million jobs around the world. Now, the alternative is what are the options - the private sector to backfill that immediately? Given what has happened, that's going to be a challenge. We can assist the private sector in so doing and we will do so.
But more broadly, it is a role for governments acting to the greatest extent possible, to assist in filling that gap. The government of China has acted already with an $850 billion-plus stimulus package over two years, representing some seven per cent of GDP. We've had a 50 trillion yen package out of our friends in the government of Japan. We have had decisive action also, of course, from a number of other OECD economies, including our own. But this is just the beginning of what the world needs to do.
JOURNALIST: The Obama transition government has talked about a second stimulus package when Obama takes office. Will you be urging Mr Bush to perhaps move sooner, and did you get any indication from Madeleine Albright about what the new government will do here?
PM: We had a good and general discussion with former Secretary of State Albright about the global financial crisis and how Australia will work as close as possible with the Obama Administration on the response to that challenge for the future, not just on financial market regulation but also in terms of stimulus to the real economy.
The challenge we all face is to get the detail of this as right as possible. A lot of the data is opaque - that is, it is still emerging. But what we know from economic history is if you wait for all the data to become crystal clear and pristine in its clarity it is often too late.
Our strong view, therefore, as the government of Australia, is that as early as possible that the global community can act within their economic capacity to stimulate global growth, the better.
The numbers are stark - a $60 trillion economy, some trillions having already been sucked out, who's going to put that back in? That must be done on a concerted basis.
JOURNALIST: President Bush was making the case today strongly against greater government regulation of financial markets. That puts him at odds with you somewhat, doesn't it?
PM: The President's speech was dealing what the challenges which open economies face for the future and I think the President's speech also spoke quite clearly about some of the problems of regulation which have occurred in the past.
What's the challenge here? This is not a debate between capitalism and socialism. This is a debate about getting the regulation of open markets right for the future. That's what we're on about here - making sure that the core principles which underpin a market economy - transparency, proper capital adequacy, proper consistency across capital jurisdictions - that these are right, clear and transparent.
This is not an argument for more regulation. It is an argument for better and more effective regulation for the future. That's what we're on about.
JOURNALIST: When you say that you need coordinated fiscal stimulus, given that some countries have already acted and others haven't, are you saying that countries that already have acted should do some more as part of this coordinated move?
PM: Michelle, I can see where your mind is going immediately, as you join these dots together. The onset of the financial crisis which has been occurring for most of the period that we've been in office, and intensifying in the last several months, means that we need to take into account is fiscal policy decisions already taken and those which still need to be taken.
It is the aggregate of actions and decisions taken and those which still must be taken which is important here.
Again, the question is one ultimately of mathematics. You can't suck out trillions of dollars from the global economy and expect there to be no employment consequences.
The practical question of mathematics is who puts it back in? A private sector which is battered and bruised by what's happened in the financial markets - and we'll support them to the greatest extent possible, as we are doing, for example, with the auto industry in Australia, and/or the role of government?
And we constantly argue that in these exceptional times, these extraordinary times, these virtually unprecedented times, there is a decisive role for government in providing the stimulus that's necessary. Embracing actions already taken. Foreshadowing actions which still need to be taken and for that to be done to the greatest extent possible collaboratively across the world.