SUBJECTS: National Accounts, stimulus, Hockey gaffe, Clarke case, NSW politics, ACCC Caltex-Mobil issues paper.
CHRIS BOWEN:
Thanks for coming. Well yesterday we saw confirmation that Australia is the fastest growing developed economy in the world, and indeed the only developed economy in the world to have grown over the last 12 months. And as many economic commentators have pointed out over the last 24 hours, the stimulus has been very important in achieving this result. In fact, without the Government's stimulus, Australia would have been in recession for the last three quarters.
Over the last 24 hours we have seen increasingly shrill calls from the Opposition for the stimulus to be withdrawn. The Opposition has been reduced, from arguing that the stimulus wouldn't work, to arguing now that it is working too well, and that it needs to be withdrawn. This is despite calls from people like the Australian Chamber of Commerce and Industry, for the stimulus to remain in place, because they know how important it will be in supporting economic growth and jobs over coming months.
Now these calls, as I say, have becoming increasing shriller and shriller, and they reached their high point – or perhaps I should say low point – last night where Mr Hockey apparently and evidently, criticised the Reserve Bank of what he called a 'major overreaction' in reducing interest rates.
Mr Hockey needs to clarify these comments today.
Does he really think the Reserve Bank acted too decisively and too early in reducing Australia's interest rates? Is he really saying that Australia's interest rates should have been higher? Is he really saying that the Reserve Bank acted too swiftly and reduced interest rates too fast?
This is the latest mistake from Mr Hockey. Now either he genuinely believes that Australia has acted too much – he genuinely believes that the Reserve Bank and the Government should not have acted swiftly to support jobs – or this is yet another example of 'Sloppy Joe' in action. He needs to come out and clarify these comments today.
Happy to take your questions.
JOURNALIST:
Why does it concern you that much that he should attack the Reserve Bank? There are as many economic opinions as there are growth figures.
BOWEN:
The Reserve Bank is an independent economic body in Australia; highly respected, and even more importantly, the Reserve Bank has acted very decisively to see Australia through, in conjunction with the Australian Government's stimulus package, this economic crisis.
Now Mr Hockey is leaping on one month's figures to say that Australia is now through this crisis and in fact, the Reserve Bank and the Government have overreacted. Now that is an enormous call from Mr Hockey and goes to the very basis of his judgement.
JOURNALIST:
(Inaudible)
BOWEN:
No, the economic stimulus is designed to withdraw, of its own volition, because it's designed to wind down as the economy improves. For example, the First Home Owners Grant is being wound down over a period of time. The infrastructure spending in the stimulus package is being spent; the infrastructure spending occurs and then is withdrawn. And the great benefit of Australia's stimulus package and the way that it is designed, is that it is temporary and targeted, and amongst the most temporary and targeted in the world. This has been recognised by international bodies like the IMF, that it is designed in such a way, to wind down; and these bodies have highlighted the fact that Australia is alone amongst developed countries in having a plan to return the budget to surplus over a period of time. So this is something that the Government included in the design of its stimulus package.
JOURNALIST:
Have government revenues come out better since the May Budget?
BOWEN:
We will be announcing our forecasts later in the year, as we normally do, with the mid-year economic forecasts. That will deal with all of the budget and economic parameters.
JOURNALIST:
Do you share the concerns about the mess that is occurring with the state Labor Party and the Rees Government, and the effect that might have on Federal Labor's standings.
BOWEN:
Look, I saw Mr Turnbull today calling for the people of Bradfield to send a message to the State Government and doesn't that say a lot about Mr Turnbull? This is the first test of his leadership and he has to rely on state issues to beg people to vote for him. He doesn't have a positive agenda; he hasn't got a plan for people to vote for him on his own basis, but he relies on state issues. Now people will make decisions at the Federal election, when that's held, I believe, on federal issues. Of course people will weigh up the positive response of the Government to the economic crisis with the lack of a plan from Mr Turnbull and with the negative campaign that he runs, and his reliance on state issues.
Now people will draw their own conclusions about how they form their vote, when it comers time for the next election, but we just have to get on with the job, which is responding to the global economic crisis. And the NSW Government needs to get on with the job of delivering basic services and infrastructure.
JOURNALIST:
(Inaudible)
BOWEN:
No, well I think Mr Rees has said that that's his job and I agree with him. He has said that that's the job of his Ministers and I agree with him.
JOURNALIST:
Isn't every NSW MP tainted by this government? About what's doing or not doing?
BOWEN:
You mean federally?
JOURNALIST:
Any member of the NSW Labor Party. Any MP.
BOWEN:
Well no, when I move around the community, people say to me, they certainly say that they welcome the job the Federal Government is doing. They want the State Government to get on with the job that it is elected to do, and they want governments to do the jobs they have been given, respectively. People will make their own judgements and conclusion; we simply get on with the job.
JOURNALIST:
Can I ask you about yesterday's High Court decision on the superannuation surcharge? What's your general reaction to that?
BOWEN:
Look we will need to consider that ruling from the High Court; it obviously does have implications for us. We are working through that with both the Treasury and the Attorney-General's Department, in relation to a Government response.
JOURNALIST:
(Inaudible)
BOWEN:
Well this is something that we will need to work through, in terms of the ramifications of the findings; whether it applies only to individual states or more broadly, is something that we are giving serious consideration to. We will have more to say about that in due course; it's too early for me to make any further detailed comment. Sorry.
JOURNALIST:
Minister, given the clearly better than expected performance of the economy…(Inaudible)
BOWEN:
As I said in regard to your earlier question, we will release our mid-year economic forecasts later in the year. That will deal with the budget parameters, including the deficit, and that will flow through to the question that you are asking.
JOURNALIST:
Just on withholding tax…(Inaudible)…when will the parliament pass the changes?
BOWEN:
Of course, when the legislation will be passed is a matter for the Parliament and the Senate, which is outside the Government's control. I'm sure we will be introducing it as soon as it is ready and it will pass through as expeditiously as it can, but we would be looking for the cooperation of other parties.
JOURNALIST:
Just back on the surcharge issue, there is a report today…(Inaudible)…as high as $26 million?
BOWEN:
Look I really can't comment in detail. We are still working through all of the ramifications, to be completely honest. We still need to give this matter some more thought and the Treasury will need to undertake some more analysis of the ramifications.
JOURNALIST:
The ACCC released a paper yesterday on Caltex's bid to takeover Mobil. It has some concerns, do you too?
BOWEN:
Well I think the ACCC has released what they would term an 'issues paper' and asked for public comment. Obviously this is a matter of some concern in the community, to ensure that the petrol market is as competitive as it possibly can be, and I know that the ACCC will take that concern very seriously indeed, and ensure that the market is as competitive as it can be. It will weigh up all those concerns when it comes to make a decision.
JOURNALIST:
(Inaudible)
BOWEN:
I don't predict ACCC decisions. I didn't do that when I was Competition Policy Minister and I'm certainly not going to do when it I'm not.
JOURNALIST:
(Inaudible)
BOWEN:
Well that's a matter for the ACCC. The ACCC is doing a very thorough job in calling for community feedback and that is as we would expect.