FED:McKibbin wrong on stimulus: Bowen

08-12-2010
FED:McKibbin wrong on stimulus: Bowen

CANBERRA, Aug 12 AAP - Federal Labor has rejected Reserve Bank director Warwick McKibbin's
claim that the government did not save 200,000 jobs through its stimulus spending at the
height of the global financial crisis.

Mr McKibbin says the role of fiscal policy was relatively small in supporting the Australian
economy.

"That doesn't mean it wasn't important, but it could not have been responsible for
creating 200,000 jobs," Mr McKibbin told The Australian.

Labor campaign spokesman Chris Bowen says the Reserve Bank director is wrong.

"The Treasury analysis is clear - the stimulus saved 200,000 jobs and that's a conservative
estimate," Mr Bowen told ABC Radio on Thursday.

"Mr McKibbin is ignoring the modelling and the work of the Treasury."

Mr Bowen said Mr McKibbin was also at odds with the Nobel laureate Joseph Stiglitz
"who pointed out that our stimulus was particularly effective and one of the better designed
in the world".

Prof Stiglitz, a former World Bank chief economist and adviser to the US government,
has said Labor did a "fantastic job" of saving Australia from the global downturn.

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