JANINE PERRETT:
Welcome back.
Well with Greece on the verge of economic anarchy, Europe splitting, the Chinese market in freefall, our rates due out tomorrow with the RBA, tough times to be Acting Treasurer.
Joe, Mathias, Josh, all away. The job of plucky Small Business Minister Bruce Billson is running the country. He spoke with me in the past hour from Melbourne.
[Excerpt]
JANINE PERRETT:
Minister, today we've got Greece, China's having problems, interesting time to be Acting Treasurer.
BRUCE BILLSON:
Yes plenty of moving parts.
But thankfully in our country we have got a very clear economic action strategy, encouraging signs, strength in the economy, an improving budget position, and I think a lot to look forward to.
We are also mindful that there are these external headwinds, and that is why we are monitoring those closely Janine to see what implications, if any, there may be for us.
Particularly in Greece. I mean, Greece is in a very different position from Australia.
We have very modest, direct financial and economic interests in Greece, our institutions are strong, our banks are strong, our prudential regulatory framework is strong, we have got good signs in the economy and a budget that is on its way back to …
JANINE PERRETT:
But …
BRUCE BILLSON:
… to surplus. So that is good, and- but other things, we are keeping a close eye on them.
JANINE PERRETT:
That's great from a political point of view, but from an economic point of view we are connected globally, as we saw in the GFC.
BRUCE BILLSON:
Indeed.
JANINE PERRETT:
You are getting briefings, what are you hearing today about the situation and what contingencies we've got in plan for any global market turmoil?
BRUCE BILLSON:
Yes well what we are hearing from our partners not only at a political level but from central banks and the like, and some of the multilateral institutions that we are engaged with, is that they are closely working with European leaders.
Clearly the Greek vote on the weekend made it clear that that particular proposal of measures to improve the budget position in return for ongoing credit was not to the liking of the Greek community.
I know Angela Merkel and President Hollande have convened a meeting of European leaders for tomorrow.
Today there are telephone hook-ups. European leaders have made it clear they will do what they need to do to ensure stability in the Eurozone.
So but at this stage not a new proposal on the table Janine. So, we are monitoring the situation closely, and looking for how the Greek leaders and also the European leaders find some alternate pathway forward.
JANINE PERRETT:
So it's an unprecedented situation for the Greeks, and as you say while our economy might be strong, how concerned are our authorities just on that issue of what would happen in any instability in global markets at the moment - what's the plan?
BRUCE BILLSON:
Well our authorities keep drawing the contrast between the situation we are in and what the Greek nation faces.
Yes, there are interconnectedness you pointed to in your introduction, but also our situation is quite different.
Our direct financial and economic exposure is relatively modest, our institutional framework, our banking system well capitalised, very sure-footed, and encouraging trends in the economy.
What we know is that there is lots that we are not clear about, and at this stage it is really going to be a matter of where the Greek and European leadership takes this situation in the coming days. So we are monitoring that closely.
Clearly there are other influences at play on the Australian market - you touched on what is happening in China.
So, lots of moving parts, but we are staying abreast of those, closely monitoring them, and looking to Europe for Europe to provide some leadership in terms of what happens next with Greece.
JANINE PERRETT:
Alert but not alarmed you sound there Bruce Billson, that's good.
BRUCE BILLSON:
Well, someone has used that phrase before. But it is important for your viewers and the Australian community to know that we are in a different situation.
You are right about the interconnectedness, but we have got a strong position that we are in and what we know at the moment is there is lots that is not able to be known. And that is why we are staying very closely engaged, making sure we are doing what we can to make sure we have a robust economy, strong institutions, well-capitalised banks, and a credible plan to get back to surplus.
JANINE PERRETT:
Okay you mention China, now that obviously is closer to home and we are a lot more interconnected with the Chinese economy. They've lost something like 30 per cent of the stock market, they're now doing emergency measures over the weekend to prop it up paying institutions to actually buy stock, how closely are we monitoring that and is there more concern about China from an Australian perspective than Greece?
BRUCE BILLSON:
Well we have a closer interconnectedness with the Chinese economy and of course we are very closely examining what is happening there.
What we have seen though are the Chinese authorities moving quite confidently Janine. I know some of their strategies may be less familiar with other economies but they have moved quite decisively and that seems to have a stabilising influence.
So it is clear the Chinese authorities are aware of things happening in their stock market, lots of interest and excitement in shares and in the stock market in China and a need to take some policy intervention.
They have done that, that has had a stabilising influence today and obviously that is something we are also very much keeping a close eye on as well.
JANINE PERRETT:
Would you say it's fair to say we should be more concerned about what happens in China than Greece as far as we're concerned?
BRUCE BILLSON:
Well there are differences in the circumstances here.
In the Greek situation, they have got a long building up set of circumstances that now the current generation of citizens and political leadership is having to deal with along with the borrowers that are wondering what is needed to satisfy prospective lenders that they can continue to finance the Greek situation.
That is very different from China, you have got excess exuberance and buoyancy in the share market and it is quite a different set of circumstances.
But in terms of our economic relationship you know we have a very significant trading relationship with China, obviously very closely interested in what is happening in the Chinese market as it has implications for our economy.
But again you have seen decisiveness from the Chinese authorities; they have stepped in a very confident and decisive way and it seems to be having a positive influence by stabilising what was excess exuberance in the share market.
JANINE PERRETT:
Well just getting back to Australia you've got the Reserve Bank tomorrow everyone's expecting him to put things on hold, especially with all the turmoil in world markets. As small business minister, given how key RBA decisions are to confidence, what are you hoping at the moment?
BRUCE BILLSON:
Well it would not be right of me to give a commentary on what the RBA may or may not do but if we look domestically, Janine, you see lots of very encouraging signs in a domestic economy.
We have got banks, the National Australia Bank today pointing to how the Budget package has really been a kick start for lots of investment in small business.
Commonwealth Bank's analysis saw an uptick in investment in 16 of 18 sectors of our economy, we have seen good improvement in job ads, consumer confidence being above its long term average and there are plenty of reasons to be optimistic.
So whilst we are doing all we can domestically to put the economy and our citizens in the best position we can, there are clearly other influences at play internationally and that will give the Reserve Bank and its board something to chew over so we will wait and see what that announcement is tomorrow Janine.
JANINE PERRETT:
Well some of those economic indicators though are mixed, there was an online retail sales just released which wasn't as buoyant as hoped, there's some concern that any of this turmoil or any scare - anything that will scare the consumer will offset the plus of the Budget. Are you concerned that things like Greece might be a negative?
BRUCE BILLSON:
Well we know there are other influences at play and that is why we focused very much on what we can influence ourselves and what positive action steps we can take.
I mean we look at jobs growth, that is around 22,000 a month and that is a great credit to the private sector economy and those creating those jobs.
We are just trying to get the economic settings right. Jobs growth is some four times where it was under the last year under Labor, even higher for the first five months of this year.
We are seeing fairly benign interest rate policy, so people looking to access finances as a way of facilitating their ambition have that in reach and very much so at this point in time.
Housing starts are encouraging, retail sales have been quite reasonable and you see what is happening in investment terms for the non-mining sector, there are some encouraging signs there.
So when you look at the pattern of those industries there is more upside than down. There will be the odd one that might be a little discordant with it but I think we can be fairly optimistic we are on the right track and we are seeing improvements not only in the economy but the opportunities it is facilitating for our citizens.
So you know me Janine, I am upbeat perpetually, my blood group is even positive and it is very much that focus that I bring to my work.
JANINE PERRETT:
Well just on that- I spoke to Harold Mitchell, business leader Harold Mitchell last Thursday on my program, he warned, he said they were seeing encouraging signs in the advertising market which is a good indicator, but he put a stark warning to the Government that all the talk about national security and that kind of almost scaremongering- he didn't use that word, but any fear that goes with that does have the danger to offset it and he says you have to be very careful about people being too scared on the national security debate. Does that worry you too when you're talking to small business that you've got to offset confidence in fear?
BRUCE BILLSON:
Yes that is not really the flavour that is brought through to me with my discussions with small business.
I think people realise that governing well is a serious business and the security matters are serious issues requiring a clear and sure-footed response.
That is what the Government is providing but we are also getting on with our Economic Action Strategy.
I mean in the last parliamentary sitting fortnight we saw the major elements of the jobs and small business package.
The largest boost small businesses have seen from any Commonwealth government.
Small business company tax rate, the lowest it has been since 1967 and when Sadie the Cleaning Lady was number one. The reforms we put in to employee share schemes and the like trying to re-energise that measure of aligning the employees' objectives with those of the business.
I mean these are all practical constructive steps which are contributing to a more optimistic outlook. The other matters around security -incredibly important, but we need to make sure that our future has a security not only in relation to our physical wellbeing and our national security but also our economic security - and that is the dual path and the dual strategy that we are pursuing.
JANINE PERRETT:
Final quick question. I know you have to go. Your colleague Barnaby Joyce has pulled out of the Q&A program tonight, there seems to be a ban on Coalition members. If you were asked to go on Q&A, would you go on it Minister?
BRUCE BILLSON:
I have been asked and I have not accepted that invitation because I am waiting to see whether there will ever come a day Janine when the topic of Q&A is small business, private endeavour and energising enterprise. I think I am best talking about…
JANINE PERRETT:
And if there was would you go on?...
BRUCE BILLSON:
… the topics. That is the invitation, we have not had one of those just yet but right now the ABC's recognised that Q&A's made some of its own errors and that that has been the subject of its own internal investigation.
So I think it is perfectly reasonable until such time as Q&A and the ABC feels that Q&A has got its act together in that regard then the decision that Barnaby's taken seems rather reasonable to me, so…
[End of excerpt]
JANINE PERRETT:
Small Business Minister Bruce Billson there and also Acting Treasurer at the moment.