What Financial Crisis asks John Howard

Former Prime Minister John Howard doesn't give the Rudd/Gillard government any credit for keeping Australia out of recession - he says it was a regional crisis on the other side of the world and was "completely fallacious" for Julia Gillard to take credit for it.

He went on "There is some argument that this has really been a north Atlantic global financial downturn and we have benefited enormously from that and Australia's 'providential proximity' to booming Asian nations with a thirst for resources was more important than anything the Labor Party had done".

He added "There's the China factor and don't forget the Japanese and Korean factors either. It's enormously to our benefit. I don't rate the fiscal stimulus of the Rudd government at all highly in relation to saving us from the global financial crisis, I don't rate it at all. It was over-indulgent and was way beyond what was necessary".

But Professor Raja Junankar from the University of NSW didn't think this view was fair so he organised an open letter with signatures from 50 economics professors who strongly disagree. They argue that the $900 handouts boosted confidence in the retail sector, the school halls program and the rise in the first home owner's grant boosted the construction industry and saved thousands of jobs.

Professor Junankar said "I do give a lot of credit to Treasury for designing some of the programs. I am sure they would have done the same for the coalition government, had it been in office instead, but would they have done the same thing? My view is that they would have gone softly softly - they would have worried about the deficit more than the economy."

At one point when things were looking dire back in 2008, I was concerned about a run on the banks - there were some very worrying stories of banks going under in the US and elsewhere. But in October 2008 Kevin Rudd announced that the government would guarantee all deposits in Australian banks, building societies and credit unions for the next three years. Once that was announced, I stopped worrying.

With only days to go to the Federal Election, it looks like John Howard has emerged from retirement to say a few words he hopes will spur the Liberals on to victory next Saturday. But the question remains - did the Labor government put in place strategies to keep us out of recession? I guess we'll never know.