Nobel economist backs Labor

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Prime Minister Julia Gillard has used the comments of a Nobel prize-winning economist to fend off coalition criticism of Labor’s economic stimulus during the global financial crisis.

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Professor Joseph Stiglitz, a former World Bank chief economist and economic adviser to the US government told AAP that Australia has done “a good job” during the crisis.

Economic advisers who had been praised by “the other side” of politics were the ones who had designed America’s “economic mess”.

“To praise the people who were the architects of the global financial crisis suggested that your economic ideas might lead this country into difficulty,” he said.

“Whereas the others (Labor) actually did a fantastic job of saving your country from problems,” he said.

The stimulus program has breen criticised by the coalition, which accuses it of “extraordinary waste and mismanagement”.

BER ‘played economic role’

A government-appointed taskforce found problems with a school building scheme which was part of the stimulus plan, but acknowledged it had played an important economic role in a report released Friday.

Mr Gillard quoted Professor Stiglitz as saying there would have been waste without the stimulus.

“The waste would have been the fact that the economy would have been weak,” she told reporters of his comments.

“You would have had high unemployment, you would have had capital assets not fully utilised, that’s waste.

“So your choice was one form of waste versus another form of waste. It’s judgment of what is the way to minimise waste, no perfection here, and what your government did was exactly tight.”