Credit flows essential for economy: Rudd

The federal government and banks are working together to ensure that enough credit
is available for businesses to thrive, Prime Minister Kevin Rudd says.
Speaking at an Australia Day function in Melbourne on Thursday, Mr Rudd chose to
underline the importance of restoring credit systems across the globe.
Delivering the 2009 John Batman Oration, he emphasised the federal government's
commitment to ensuring access to credit for business investment.
"Credit flows are the blood that flows through the arteries of the economy to enable
businesses to continue to invest or to sustain their existing investments," Mr Rudd
told the reception.
"The availability of credit is essential to the health of business, it's essential
therefore to the health of households and the health of employment."
Mr Rudd said the federal government was working in partnership with major banks to
address the challenges ahead.
"As the global financial crisis affects banks around the world, some foreign banks
are seeking to reduce their exposures.
"And there is a risk of some not rolling over their existing credit to Australian
businesses.
"The Australian government in partnership with the major banks has been working
through this challenge in recent weeks and months.
"We intend to do whatever is necessary to continue to support the flow of private
credit to the Australian economy."
Mr Rudd said the economic crisis had hit every community on the planet.
"What began in America has now been extended across the world," he said.
But the election of US President Barack Obama demonstrated America's great capacity
for renewal.
"The days of extreme capitalism and unrestrained greed must be gone forever," he said.
"What America does is crucial, what Europe does is crucial, what China does is
crucial."
Mr Rudd warned China's position in the crisis may be most important of all.
"China's growth projection for 2009 has fallen by $US200 billion ($A300 billion),
about one third of the entire size of the Australian economy," he said.
"And that means a massive $5 billion fall immediately in Australian exports just
because of China alone, and with a $5 billion consequential impact on Australian
jobs.
"We are all in this together," he said.