Bowen says coalition given up on budget repair, page-23

Of course there are multi facets to the economic story during the GFC. No-one has denied that. However the GFC spooked business and consumer confidence and the two pronged stimulus packages played a part in overcoming that. If consumers stopped spending we could have slipped into technical recession which could have further undermined confidence. I appreciate that there was debate as to the construct of the stimulus packages but it is relevant that both the major Parties did accept that stimulus was needed as part of the overall strategy to continue growth in our economy.

The Reserve Bank has issued a statement on how the GFC evolved and it makes compelling reading. Below I set out the Reserve Banks commentary as relates Australia. The full statement can be accessed on the link below.

"Australia and the GFC

Relatively strong economic performance

Australia did not experience a large economic downturn or a financial crisis during the GFC. However, the pace of economic growth did slow significantly, the unemployment rate rose sharply and there was a period of heightened uncertainty. The relatively strong performance of the Australian economy and financial system during the GFC, compared with other countries, reflected a range of factors, including:

• Australian banks had very small exposures to the US housing market and US banks, partly because domestic lending was very profitable.
• Subprime and other high-risk loans were only a small share of lending in Australia, partly because of the historical focus on lending standards by the Australian banking regulator (the Australian Prudential Regulation Authority (APRA)).
• Australia's economy was buoyed by large resource exports to China, whose economy rebounded quickly after the initial GFC shock (mainly due to expansionary fiscal policy).

Also a large policy response

Despite the Australian financial system being in a much better position before the GFC, given the magnitude of the shock to the global economy and to confidence more broadly, there was also a large policy response in Australia to ensure that the economy did not suffer a major downturn. In particular, the Reserve Bank lowered the cash rate significantly, and the Australian Government undertook expansionary fiscal policy and provided guarantees on deposits at and bonds issued by Australian banks.
Following the crisis, APRA implemented the stronger global banking regulations in Australia. Together, APRA and the financial market and corporate regulator, the Australian Securities and Investments Commission, have also strengthened lending standards to make the financial and private sectors more resilient."

https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html