SUBJECTS: Newspoll, government achievements, regulatory reform, banking competition, independent tax review.
O'BRIEN:
Chris Bowen, good morning.
CHRIS BOWEN:
Good morning, Joe.
O'BRIEN:
Now, Kevin Rudd is still way in front of Tony Abbott as preferred Prime Minister but his personal approval rating continues to decline. What's he doing wrong?
BOWEN:
Well, the Prime Minister's engaged in the tough job of managing the economy, managing the nation, and opinion polls will bump up and down between now and the next election as people express views on that. He's said for some time that he expects the polls to tighten and we expect this election to be very tough. First elections for Governments, first term Governments, are traditionally, historically in Australia, very difficult. This one will be no different and the prospect of Tony Abbott becoming Prime Minister, with all the dangers and risks that that entails, is one which is real in any election.
O'BRIEN:
You say polls bump up and down. It's been bumping down for a fair while now for Kevin Rudd.
BOWEN:
Well, we're in the situation where we're engaged with the Australian people in a difficult conversation about health. We're engaged with the Australian people, have been, with a difficult conversation about climate change. Tony Abbott takes the cheap political route every time and that has some impact, we accept that. We've said for some time that the opinion poll's going to tighten and that first term Governments traditionally have a very hard road. And this first term Government has been and will be no different.
O'BRIEN:
The Opposition seems to have been hitting home with its argument the Government is all talk and no action. What has the Government achieved in its first term, apart from steering the nation through the Global Financial Crisis without the country going into recession?
BOWEN:
Well, apart from avoiding a recession when every other advanced economy in the world has gotten into one, Joe, I don't think you can ignore that, in all seriousness.
O'BRIEN:
And I haven't.
BOWEN:
Fair point. As well as that, Joe, we have dealt with the issue of pensions which has been an ongoing issue in Australia. We have delivered the biggest increase in age pensions and other pensions since the age pension started in 1909, a very significant and very substantial commitment to that.
When you look at the issue of climate change, we have been dealing with the very difficult conversation of climate change which will be one of the nation's great economic reforms when we've dealt with that, with absolutely no help from the Opposition who've been engaged in cheap political rhetoric.
And when you look across the board, there's a record of achievement. The vast majority of our election commitments either have been implemented or are in the process of being implemented. So we have a record of achievement which we'll be pointing to and arguing vigorously about right up until the next election when the Opposition can engage in cheap pot shots.
O'BRIEN:
So you mentioned the pension and climate change. Can you name any others?
BOWEN:
Well, of course I can, Joe. If you look at regulatory reform, you look at a real improvement in the relationship between the Commonwealth and the states in economic regulatory reform and the achievement of consumer affairs law and a whole range of achievements across the regulatory reform front. When you look at our position in relation to achieving that economic growth, while the rest of the world is suffering a recession, we have achieved, while doing that, we have achieved across the board reforms in almost every portfolio area, and we'll be arguing those vigorously.
O'BRIEN:
You do concede that you'll have to be doing a better job than you have been on that front.
BOWEN:
On what front is that, Joe?
O'BRIEN:
Selling those achievements.
BOWEN:
Well, look, of course the Australian people have said to us, 'We think you've done a good job on the economy. We want you to continue to focus on the things that we elected you to do as well as dealing with the economy.' We understand that, we get that, and we'll be arguing vigorously and pointing to all those achievements as we lead up to the next election.
O'BRIEN:
Now, there's growing concern about the power of the major banks post the Global Financial Crisis. Ken Henry has joined that chorus of concern now. What are you going to do to correct that?
BOWEN:
Well, the important point to make, Joe, is that the Australian financial system has withstood the Global Financial Crisis better than any other. We have not lost any financial institution and that would have been very difficult for competition if that had occurred, so the key, the number one focus for the Government and the regulators has been ensuring that's the case.
We accept that there are issues of competition in the banking industry. We are constantly looking and monitoring ways to make a difference there. We've done that through the issuance of bonds to the second tier lenders through the financial management agency. We'll continue to do that. We'll continue to keep monitoring other activities which might assist in terms of promoting bank competition.
But there is no easy answer to this. But we do acknowledge that there is an ongoing issue, as Ken Henry has done.
O'BRIEN:
What extra can you do to encourage more smaller lenders back into the market?
BOWEN:
Well, the important point to make is if it wasn't for our bank guarantee, smaller lenders would have found the situation over the last 18 months a lot more difficult. The bank guarantee, the depositors' guarantee, was a substantial boost to the market power of the smaller players in the market. It wasn't the big four who primarily benefited from the depositors' guarantee, it was the smaller banks. If it wasn't for that, I think some of our mid tier lenders would have had a lot more difficulty over the last 18 months.
As I say, our activities through the bond market have been, again, very important in supporting those mid tier and lower tier banks and other financial institutions. We'll continue to do that. We'll continue to talk to them and others about what more could be done into the future.
O'BRIEN:
Just finally and briefly, can you guarantee that the Henry Tax Review will not be released on the same day as the Budget?
BOWEN:
Well, the timing of the Henry Tax Review is a matter for the Prime Minister and Treasurer. They have both said that it will be released in the early part of this year and that will occur. And there'll be plenty of time for proper conversation, proper consultation about the things in the Henry Tax Review.
O'BRIEN:
And maybe on the same day as the Budget.
BOWEN:
Well, the timing of the release of the Henry Tax Review is a matter for the Prime Minister and the Treasurer, but the early part of the year, Joe.
O'BRIEN:
Okay. Chris Bowen in Canberra, thanks very much for talking to us this morning.
BOWEN:
Pleasure.