SUBJECTS: Petrol prices, Fuelwatch, US economy, oil prices, air traffic controllers, banks
BOWEN:
This morning as we celebrate the June long weekend, many families are considering whether to drive away for the weekend or not.
If Fuelwatch passes the parliament, this will be the last June long weekend where families are left scratching their heads about expensive petrol and where to find the cheapest petrol.
Families driving up and down the Pacific Highway in NSW under Fuelwatch will be able to look up and find exactly where the cheapest petrol is along the way.
It's important that Fuelwatch passes the parliament to give families a break.
We saw eight hours of testimony from the ACCC to Senate estimates during the week on the benefits of Fuelwatch.
So its important the the parliament actually passes Fuelwatch in time for Christmas, in time for the long weekends next year. So that this is the last June long weekend without families having the benefits of the information Fuelwatch provides.
JOURNALIST:
What difference will it really make?
BOWEN:
Well, there is evidence that Fuelwatch puts downward pressure on prices, but the most important reason for doing it, as we've said all along, is the difference between the most expensive and the cheapest petrol is very substantial. In one capital city it can be as high as 30 cents a litre. If you are going for a long drive it can be even higher. So FuelWatch would give families the capacity before they leave, to log onto the net, get an sms, ring the toll free number, and find out where the cheapest petrol is - whether they are going in the metropolitan or major regional areas. So it provides consumers with much more information and provides more competitive tension for service stations.
JOURNALIST:
There are far greater forces at play, last night we saw the largest ever single spike in oil. What's going to be the impact here?
BOWEN:
Well for every dollar increase in price of oil per barrel you'll see a one cent increase in the price of petrol in Australia and will it have an impact. We've always said the biggest impact on Australian petrol prices is world oil prices and therefore ut underlines the need for the government to do everything possible to put downward pressure on prices and give consumers as much information as possible.
JOURNALIST:
Economists today are telling us we can expect to see petrol hit $1.70 a litre on a regular basis. Would you agree with that?
BOWEN:
I don't get in the business of predicting petrol prices. My job is to give consumers as much information as possible and to put as much downward pressure as possible. There's lots of different economists with lots of different views, some believe it will peak soon, others think it will keep rising. It's not my job to predict its my job to do everything we can to help.
JOURNALIST:
You'd certainly agree that with or without Fuelwatch there's a lot more pain for motorists and struggling families in the weeks ahead?
BOWEN:
If the increased pressure on oil prices continues that will flow through to petrol prices, there's no doubt about it. That underlines the need to give consumers as much information about where they can get the cheapest possible petrol, because every cent or two can make a difference.
JOURNALIST:
Are you confident that you'll get this legislation through?
BOWEN:
Well we'll have to see how we go in the Senate. The Senate is a very tightly balanced thing and we'll be in discussions with every senator and we'll be doing our best to get it through. We'll be pursuing it vigorously.
JOURNALIST:
Now on the basis of the eleven dollar US hike last night, that eleven cents in one whack?
BOWEN:
Now as I say for every dollar increase in a barrel of oil, in Singapore prices, we see a one cent in the Australia petrol price. It weill have a flow through impact.
JOURNALIST:
You'll also expect to see the airlines cutting back even further? We've seen Qantas in just the last week cutting back on flight, perhaps even looking to cut staff. Do you expect to see more of that?
BOWEN:
There is evidence that is substantial pressures on airlines throughout the world, not just Australian airlines, but we are seeing pressures on airlines, routes being cut and changed throughout the world. There is no evidence that that's about to get any better.
JOURNALIST:
Will this effect tourist numbers coming to Australia to?
BOWEN:
Well, inevitably when the cost of travel increases, it does have impact on tourists. I know the Tourism Minister Martin Ferguson and the Transport Minister Anthony Albanese are both very proactive in this field, are doing everything they can. It will inevitably have cost pressures and flow through impacts.
JOURNALIST:
What’s your response to air traffic controllers looking for up to 63% pay increase. This is suely going to fuel further inflation.
BOWEN:
Our position has always been that increases have to be productivity-based and negotiated through on an enterprise level. That's the same for air traffic controllers as it is for everybody else in the community. So it's a matter between the relevant employers and the relevant unions, but we certainly hold the view that any increases have to be paid for by productivity increases.
JOURNALIST:
What's going be the impact on Australai given that we've had the sharpest monthly increase in US unemployment overnight and President Bush saying its clearly a sign of a deep and prolonger recession?
BOWEN:
There's no doubt that the figures out overnight in the US show that the US economy is slowing and a recession is a very real danger at this stage. This shows that there are countervailing pressures on the Australian economy. We have China and India growing fast, we have the US slowing fast. We need to make sure we get the balance right. That's why we have had a tough budget. And that's why we now have fiscal policy and monetary policy working in the same direction, putting downward pressure on interest rates. So the US figures do show a slowing in the real economy, this is not just the financial markets, it’s the real economy slowing in the United States. It underlines that there are countervailing pressures on the Australian economy.
JOURNALIST:
Could you explain what those pressures might be in the coming months?
BOWEN:
Our biggest trading partners are China, Japan and the United States. When the US is slowing that has an impact around the world. When demand is falling, when property prices are falling, when employment is falling in the United States, that has an impact through the world. Australia is not immune from that and that is on top of financial slowing we've seen in the US financial markets and the subprime crisis in the United States. So it will flow through and Australia will not be immune to that. But we do have the countervailing pressure of the massive growth in China, the highest terms of trade in Australia's history flowing through to demand in Australia. The job of the Treasurer, and the government, is to ensure we have the balance right. That's what we are continuing to do.
JOURNALIST:
Families are obviously doing it tough and we've seen a number of sectors now looking for wage increases. Do you expect we'd see some kind of a wages breakout?
BOWEN:
Well I don't think there's any evidence of that. Families are doing it tough and trade unions are making their case, but we have an enterprise bargaining system which means that there will be trade-offs and productivity trade-offs, and that will continue to be the case.
JOURNALIST:
(inaudible)
BOWEN:
As a Western Sydney MPI see everyday, people in danger of losing their homes and losing their homes, and banks and others are taking an approach which needs to be balanced against the needs to every, struggling working family. I continue to encourage them to be as flexible as they can be for families who are doing it tough.
JOURNALIST:
Do banks need to be a little more conscience with families and how tough they are doing?
BOWEN:
The important to point is that its not just banks, its all lendors who are doing this. I think that its important that everybody takes the view that if a family loses their house, nobody wins - the family loses, the financial institution loses and the community loses. Wso I would continue to encourage all financial institutions to be as flexible as they can to families who are doing it tough.
JOURNALIST:
Is there any hope for these sorts of families to get things back on track?
BOWEN:
The biggest benefit that could come to these families is a reduction in interest rates and that's why we have a tough budget. The best thing that the Australian Government can do for working families in danger of losing their home is put downward pressure on interest rates and we now have a budgetary policy, which helps the Reserve Bank from avoiding another increase instead of encouraging another increase. That's what we'll continue to do in relation to budgetary policy.