Federal Treasurer Wayne Swan said on Monday that growth targets and fiscal discipline can actually co-exist amidst the challenges being faced by key global economies, particularly in the eurozone which currently bears the weight of a heavy credit crisis.
Mr Swan told the Parliament that the Australian setting has proven that even at the height of the crippling global financial crisis, a given economy, guided by healthy configuration and management can withstand the pressures and grow in the process.
The deputy prime minister echoed the words of his boss, Prime Minister Julia Gillard, who said during a business summit in Brazil and reported by ABC as saying on Monday that: "We stimulated in the downturn ... and when growth was threatened by the onset of the global financial crisis, our fiscal response was timely, temporary and targeted."
The fiscal disciplines observed and enforced by Australia during the most challenging moments have enabled the nation to return to growth trend and aim for budget surplus when the general economic condition has become more tenable, Ms Gillard said in the G20 side function.
Her treasurer, Mr Swan, told the Parliament on Monday that the contrary was what was seen in Europe prior to the full impact of the region's financial crunch.
And even the manner that the European Union deals with its woes was at best inadequate, Mr Swan said.
Europe at this time, he admitted, is enmeshed in an economic situation that would only get worse in the periods ahead, stressing that there would more pressing problems to emerge even when the EU finally eases down on the pressures bearing down on Greece and Spain - the former in the brink of abandoning the euro and the latter flirting with banking meltdown.
What the region badly needs is a unified approach that euro leaders can agree to - a viable fiscal blueprint that will address the region's problems both in the near-term and long-term, Mr Swan said.
Europe must stimulate higher consumption levels to hopefully stimulate more economic activities, which analysts said is the tactic being currently employed by China to push its domestic economy, the second-biggest in the world, in a more sustainable pace.
Part of the reform package is budget discipline and sustainability, Mr Swan, which means that fiscal consolidation must be pursued in parallel with fiscal growth.
To date though, "I do not accept that the pace and scale of action to address (Europe's problems) has been adequate," Mr Swan stressed.
"Weak financial systems and fiscal positions continue to feed off each other at the expense of confidence and growth, and there has been insufficient political accord to make changes that are urgently needed," he added.
But the region can create a turnaround pace once Europe decides to move ahead with fiscal and political integration, Mr Swan said.
The hobbling economies of Europe, the treasurer pointed out, should look to Australia, which because of its sterling economic fundamentals is well on its way to reach an annual growth rate of 4.3 per cent.
"Amid the economic volatility now engulfing the world, Australia is recognised the world over as a beacon of strength, stability and resilience," the Australian Associated Press (AAP) reported Mr Swan as saying in his address to the Parliament today.
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