I acknowledge the First Australians on whose lands we meet, and whose cultures we celebrate as the oldest continuing cultures in human history.
In South Australia I know you take Australia Day very seriously.
For example, on Monday the City of Whyalla is hosting the Great Aussie Thong Throwing Championship.
Followed by the Great Aussie Dummy Spitting Championship.
Followed by a distribution of lamingtons on the foreshore.
What a great day -- I would love to be there.
Australia Day is also a day when -- through the honours we present and the Australian of the Year Awards -- we recognise and thank those people who inspire us - in the community, in education, health, business, sport and the arts - in so many fields.
It is a day that shows us the best of what this country can be.
And a shining part of that is the work of our medical researchers.
That is why I am delighted to announce $5.6 million of new funding for cancer research -- $3.7 million of which will go to the Institute of Medical and Veterinary Science here in Adelaide for its research into blood cell cancers such as leukemia.
We are very pleased to fund its groundbreaking work.
Today I met the extraordinary Lance Armstrong, who as you know is making his professional cycling comeback in Adelaide after seven Tour de France wins and surviving his own battle with cancer.
Lance has become a passionate advocate for cancer research - and my government strongly supports his cause.
Our last budget included $300 million of funding to fight a disease that leads to the death of more than 38,000 Australians every year.
This week, I am attending Australia Day functions around the country to deliver a series of address on the global economic situation and how the Government is responding to it.
I am doing so because I intend to be absolutely straight with Australians about a crisis we did not cause -- but the effects of which we cannot escape.
I know that many Australians are worried - and I understand that worry.
The Government stands ready to take whatever action is required to see Australia through the difficult times ahead.
The impact of the crisis will be huge - but so too will be our response.
We have already spent $36 billion to stimulate the economy, protect jobs and build the high-skilled economy of the future.
With a combination of strong, determined economic management and compassion for those who need support we will craft a more resilient Australia.
In Sydney yesterday I spoke about the underlying causes of the global financial crisis - in particular the ineffective regulation of financial markets as part of the free market fundamentalism, excessive greed and the exorbitant salaries that rewarded irresponsible risk across the financial world.
Today I want to talk specifically about the collapse in credit markets, the difficulties our banks face - and what the Government is doing to respond.
There is no more potent a measure of the dimensions of this crisis than what has happened to equity markets over the past 12 months.
The numbers are frightening.
Global share markets have lost almost half their value since they peaked in October 2007 - the worst decline since the Great Depression.
That is a loss of US $32 trillion dollars - the equivalent of the total annual GDP of the G7, the group of seven of the world's wealthiest industrial nations.
The Australian share market has been hit, too.
It fell by 43 per cent last year, the largest annual fall in Australian stock markets since 1900.
Share markets have been in freefall because investor confidence has collapsed.
At the same time, the cost of borrowing for banks has increased dramatically.
In just over one month between September and October the banks' cost of obtaining credit increased by about five times in Australia, as well as the US.
Since then, credit conditions have eased a little, due to extraordinary measures taken overseas and here.
Nevertheless, credit remains restricted.
For example, the banks' cost of obtaining credit remains double what it was in early September.
Fortunately our banks remain profitable and well capitalized, leaving our banking system better placed than most other developed countries to withstand the global financial crisis.
Because they have lent carefully, they are far less exposed to bad debt from housing loans or failed securities than most of their American and European counterparts.
For example, the sub-prime housing market that triggered the crisis makes up about 15 per cent of the mortgage market in the United States.
In Australia non-conforming loans make up only an estimated one per cent of outstanding loans.
But the Australian economy is global in nature and therefore affected by the health of global banks.
Some cash-strapped foreign banks are scaling back their lending in foreign markets such as Australia.
If banks do not allow clients to re-finance as they would in normal conditions, then companies can be forced to sell assets, often at low value.
This endangers their financial health and that of the whole economy.
According to Merrill Lynch, lending by overseas banks represented more than half of the 285 billion in syndicated loans that have been issued to Australian businesses since 2006.
Of those outstanding loans, 75 billion is scheduled to fall due over the next two years.
If foreign banks do not roll over their share of these loans, it would be difficult for Australia's four major banks to fill the gap on their own.
The withdrawal of foreign bank lending, the tightening in domestic bank lending and the dramatic falls in stock markets are all hurting the real economy.
Growth in business debt more than halved in the six months to September, compared to the same period a year before.
When businesses cannot get loans and are not confident about the future, they can't or won't invest, meaning they can't create jobs and they can't grow.
The supply of credit affects real businesses and affects real jobs.
Australian credit markets are international - and Australia has gained much from the internationalisation of our banking system over the last 20 years. But internationalisation comes with risks that must be managed.
In particular, since companies in Australia often raise finance with banks in another country - global financial problems abroad can quickly affect our real economy at home.
As the global financial crisis affects banks around the world, some foreign banks are seeking to reduce their exposures, causing them, in some cases, not to roll over their existing credit to Australian businesses.
The Australia government has already developed a special purpose vehicle for the car finance industry to support dealerships as their foreign-owned financiers left Australia, and we will continue to work in partnership with the private sector to do what we can to support Australia's credit markets.
Despite the size of these challenges, I can't stress too much that Australia is better placed than perhaps any other country in the developed world to ride out this crisis.
The Government has moved swiftly and decisively to ensure the stability of the financial and banking sectors, and to support the real economy.
We announced a guarantee of all deposits up to one million dollars held in Australian banks, building societies and credit unions and Australian subsidiaries of foreign-owned banks.
We extended that guarantee to wholesale term funding - the money financial institutions raise on the capital markets - so that Australian banks, building societies and credit unions could continue to raise funds overseas.
And we acted to support the residential mortgage-backed security market when it was largely frozen by the credit crisis.
We did so by authorising the purchase of eight billion dollars worth of securities from Australian lenders so that they could continue to fund their operations.
Together with the four major banks, we have established a Special Purpose Vehicle worth up to $2 billion to help car dealer financiers who have encountered financing difficulties because of the global financial crisis.
These actions have helped to ease credit conditions - as has the Reserve Bank's three percentage point cut in the official interest rate in the three months to December.
The fall in interest rates has provided mortgage relief to families and to small businesses.
The Government has no greater priority than maintaining confidence in the economy.
And maintaining confidence in the banking sector is absolutely crucial to confidence in the broader economy.
And the Government stands ready to take whatever further action is necessary to stabilize financial markets, and to help reopen the private lines of government to business, to get blood flowing through the arteries of the economy.
Ladies and gentlemen, as I said earlier, Australia is part of the global economy.
That means that we can never be completely immune from an economic disease of this potency.
But it is equally true that we can only find a cure for this malaise through concerted international cooperation.
These are grim times right around the globe.
However, I do believe that the darkest hour is just before the dawn.
It is after midnight in Washington right now - but in just a few hours time Barack Obama will be sworn in as the 44th President of the United States.
Throughout their history Americans have distinguished themselves by being at their best when times are at their worst and just such a time has arrived for America and for the world.
They responded to the divisions that threatened their great Union by electing Abraham Lincoln.
They responded to the ravages of the Great Depression and the Second World War by electing and re-electing Franklin Roosevelt.
And now they have set Barack Obama the mighty task of rebuilding the American economy and leading the recovery of the international economy: a great task for a great man.
I believe from everything I have seen, read and heard and from the conversations that I have had with him that the American people have chosen well in their new President.
I believe that the measures President-elect Obama is preparing to take will sit well with the approach of the Australian Government.
He is committed to a major economic stimulus package. Ours is already underway.
He will move for much stronger regulation of the financial markets rejecting the “anything goes” approach which has so clearly failed.
Last year while addressing the UN I called on the international community to adopt “globally agreed best practice standards of financial regulation”.
I will continue to press this position and welcome any moves by his Administration to support better regulation of financial institutions in America and abroad.
If there is one thing we all now know it is that only when America properly regulates its own financial institutions will Australia's markets be immune from the mess we are now managing.
As I have said before - “when markets fail, governments must act”.
These are dark times but a new age and a new optimism - tempered by the magnitude of the challenges ahead - is about to dawn across the Pacific.
Barack Obama truly is the hope of our time and I say this to the new President and to the new people, Australia as always stands ready to work with America in the great challenges that lie ahead.
In these difficult times, confidence is not just an economic concept.
It is something we can all generate.
Confidence in each other and confidence in ourselves, confidence in the nation and all the strengths that we have deployed at difficult times in our history.
We are all in this together all Australians and we can all help each other to get through this time together.
Jobs matter most and jobs are being lost.
Together with sacrifice all round we must rebuild jobs.
This will be hard.
But we either just watch as the global financial crisis wreaks its havoc on Australian jobs
Or we can have a go.
This Government will leave no stone unturned to see Australia through.
And if we a community are united we will see Australia through - building on our strengths, supporting the weak and crafting a more resilient Australia for the future.