Prime Minister Kevin Rudd has told world leaders if they do not pour enough cash into their economies to combat unemployment they risk turning a global recession into “something worse”.
Rudd was among leaders in Washington on Saturday for the G20 summit, where nations agreed to a six-point plan to tackle the escalating global slowdown
Nations will work to make financial markets more transparent, bolster regulation and take action to restore growth in flagging economies.
They have set themselves a March 31 deadline to deal with key priorities and will then hold another meeting – likely in London – by the end of April.
The final communique from the summit offered plenty of promises for action but was short on detail about extra fiscal stimulus which Australia and Britain see as crucial to support economic growth and keep the jobs market afloat.
Rudd put his counterparts on notice that their promises had to translate into real outcomes.
“This summit’s conclusions are sound but the implementation of recommendations contained within the summit are critical,” he told reporters.
“And that is why the timeframe which has been outlined is of itself critical.”
During his address to the summit, Rudd predicted unemployment would be the biggest problem facing leaders when they next met.
“When unemployment hits, it goes up like an elevator – very sharply – and it comes down like an escalator – very slow,” he said.
“It is essential to grasp that this crisis is continuing and there is no alternative but to stimulate our economies now and at a scale to prevent a large rise in global unemployment.”
Failure to act could condemn the globe to the next Great Depression that many fear.
“If the world fails on this challenge of large scale stimulus we will turn a significant global recession into something worse,” Rudd said.
Australia has already targeted $10.4 billion at pensioners, families and housing to fight sliding growth and rising unemployment.
His message was equally stark for households, admitting the summit would not provide them with any quick fixes.
He warned there was a long way to go and it would be a bumpy ride.
“For every person in Australia the pace for recovery will be slow, it will take time but what I know for a fact is that if we were acting completely separately from the rest of the world it would be even slower and even more difficult.
“This is one significant step in the right direction but many more need to be taken.”
Rudd fleshed out the government’s plans to supplement its fiscal strategy with a timeline of infrastructure projects to keep the economy rolling along.
“The next stage in terms of fiscal stimulus in Australia lies in the initial set of infrastructure announcements we will make in December,” he said.
The government is set to announce a program of shorter-term projects in December, followed by longer-term investments in the new year.