“Most economists think it’s more like a bathtub. It goes along for a while and then starts to come out slowly at the end,” he explained.

“Many think the worst of the carnage has passed, although there are probably 15 million unemployed people in America who would disagree.

“But for those of us who are taking a bigger picture look at this, I think green shoots will gradually start to appear.”

Hooke said that in the second half of this year things had improved.

“Liquidity is returning, albeit slowly, while not universally across the board,” he said. “The ASX is up 40 per cent over where it was in March, commodity prices have picked up, there is a rebound in confidence internationally and global production has started to make small gains.”

Hooke said that despite these fundamentals, there was no cause for complacency.

“This stimulus has done the job, but countries and companies cannot spend their way out of this crisis,” he said.

“They need a policy that does all the sorts of things that you expect, such as building national capacity that is supportive of employment, investment and development.”

He said that just because Australia had a natural endowment of resources didn’t give us a “get out of jail free card”.

Hooke said the federal government had been elected essentially on a platform of capacity building, but had “got mugged by a financial crisis on the way through”.

“The challenge to them now is to back up the rhetoric with some substance,” he added.

“The issue now is whether they can get into productivity. The real risk, I think, is that they’ll continue to play out the redistributing space rather than just generate productivity.”

Hooke suggested the government’s emissions trading scheme was an example of redistribution.

“You really need three pillars all working in sync for a successful emissions trading scheme,” he explained. “You need a global protocol, low emissions technology and you need a market price. If you get all three aligned and calibrated, you’re going to do something.

“If you get one of those out of whack with the other two, you’ve got problems.

“This is a global problem and needs a global solution.”

He said he did not believe the current formula was going to do the trick because it was not linked to global protocol, to global emissions technology and policies.

“It’s preoccupied with raising revenue. You don’t need to auction permits to establish a carbon trust in the market,” he said.

“All the auction is going to do is raise revenue.”

Hooke said this simply amounted to redistribution.

“It doesn’t need to cost jobs, we don’t need to replace output. We’re planning to take 250 million tonnes of emissions out of the equation by the time we get to 2020 – that’s equivalent to shutting down the entire energy generation and the entire transport system of Australia.”
News Courtesy "Construction Industry News"