Rudd Says Australia to `Act Early, Hard' on Economy

By Iain Wilson and Gemma Daley

Oct. 19 (Bloomberg) -- Australian Prime Minister Kevin Rudd says his government has tried to act ``early and hard'' to ensure the nation's economic growth is sustained at a time when the global financial system faces one of its biggest challenges.

``I want to make sure that I can say to myself that it's been tough, it's been hard, nothing's guaranteed but we've done everything that was logically possible at the time to keep this economy as strong as possible,'' Rudd said during a nationally televised town hall-style meeting broadcast tonight on Seven Network Ltd.'s Channel Seven.

The foray by Rudd, 51, into primetime caps a week in which the prime minister has taken center stage to sell his response to the turmoil roiling global financial markets. Earlier in the week, Rudd made the first national address by the country's leader since John Howard went before the nation in March, 2003, after U.S. forces began an attack on Iraq.

Tonight's appearance on Seven's ``Minding Your Money: An Audience With the Prime Minister'' was billed by the television channel as an opportunity for the Australian public to pose questions to Rudd on how they're supposed to cope with the biggest financial crisis since the Great Depression.

``When you know from what's happening around the world that there's going to be an impact on Australia, the best thing you can do is act early, act decisively, act hard,'' Rudd said when asked by an audience member whether his Labor government had gone far enough to stimulate the economy.

Busy Week

For Rudd, the past week has been a busy one, both in terms of his government's policy response to the financial crisis and for the public role the prime minister has adopted.

Rudd announced on Oct. 12, following a two-day crisis meeting with senior ministers in the Australian capital of Canberra, that the government would guarantee all deposits with institutions for the next three years. The government also promised to guarantee all ``term wholesale funding'' by Australian banks operating in international credit markets.

Two days later, Rudd said Australia will give pensioners, home buyers and families A$10.4 billion ($7.3 billion) as part of a spending package to bolster the nation's economy. Rudd's deputy prime minister, Julia Gillard, later told a Melbourne radio station the government is prepared to spend even more should the need arise.

`Define a Leader'

By the end of the week, Rudd promised at a meeting with some of Australia's most influential business leaders in Sydney to do ``whatever it takes'' to help the nation weather the worst of the spreading financial crisis.

``This will define him as a leader,'' Bob Gregory, an economics professor at Australian National University and a Reserve Bank of Australia Board member from 1985 to 1995, said from Canberra ahead of Rudd's television appearance tonight. ``So far, he has warned people about a crisis we are so far only feeling through the stock market.''

Rudd's appearance on Channel Seven tonight displaced ``The Outdoor Room,'' a gardening show hosted by Jamie Durie; tonight's program also faced stiff competition as it pitted the prime minister up against ``Australian Idol.''

In a lead-in before Rudd appeared alone on a stage adorned with a single chair and a blue-screen background, Channel Seven presenter David Koch dubbed the program an ``Australian television first.''

`Really Concerned'

``I became really concerned about a week or so ago, not because of anything happening in Australia with our banks and our financial system,'' Rudd said in response to the first question of the night. ``I was getting concerned about what was happening overseas and the wash-through effect to us.''

In recent appearances before the public, the prime minister has adopted a candid demeanor when explaining the current financial landscape and Australia's place within it.

During an address to the National Press Club on Oct. 15, the prime minister spoke of a ``day of reckoning'' for credit-rating agencies who had failed to adequately warn about the subprime credit crisis. Rudd had even more criticism for those who had most directly contributed to the crisis, saying ``obscene failures in corporate governance rewarded greed without any regard to the integrity of the financial system.''

Rescue Package

Rudd's A$10.4 billion rescue package will be funded through the 2008-09 budget surplus, forecast in May to be A$21.7 billion. Rudd said the government would release new budget forecasts in November and aimed to ``maintain the budget surplus over the course of the economic cycle.''

The Reserve Bank of Australia in August said the economy would expand 2 percent in 2008, slowing from 4.3 percent in the previous calendar year.

Federal Opposition Leader Malcolm Turnbull has criticized Rudd's response to the crisis, saying the Labor government hasn't fully addressed the ``consequences'' of its rescue package -- notably the impact of the guarantee on bank deposits to the short-term money markets.

``They aren't being transparent,'' Turnbull told ABC TV today, according to a story carried on the Sydney Morning Herald's Web site. ``They're not prepared to discuss the consequences of their actions.''

To contact the reporters on this story: Gemma Daley in Canberra at gdaley@bloomberg.net; Iain Wilson in Sydney at iwilson2@bloomberg.net