SUBJECTS: OECD Economics Outlook, Consumer Credit reforms, Godwin Grech.
MARIUS BENSON:
Chris Bowen the OECD seems to be giving a classically mixed outlook on the economy for Australia - that's no good this year – it's shrinking by 0.3 percent but maybe the worst is nearly behind us?
BOWEN:
Well, the OECD has confirmed that Australia is the strongest performing economy in the OECD, we've got lower debt and deficit than any other major advanced economy – to give it a tick to our fiscal stimulus, our infrastructure program but of course they have warned there's a rocky road ahead which we've been saying for some time and I think it underlines the importance of our fiscal strategy.
BENSON:
In fact, its optimism is fairly guarded – it talks about approaching a nadir, we haven't even hit rock bottom yet.
BOWEN:
Well, it does certainly make that case and reminds us that for the first time in a very, very long time, in many decades, the world economy will be contracting this year. The contraction in Australia that they predict is 0.4 per cent compared to 4.1 per cent around the 30 OECD members, so significantly better than the rest of the world but we can't rest on our laurels, there's going to be some way to go yet.
BENSON:
There's always a caveat with these OECD and other predictions because they come out with very precise predictions - down to the first and second decimal place - but they're hopelessly wrong.
BOWEN:
Well we live in very turbulent times, we've seen the World Bank and the OECD have to go back and revise their forecasts many times, that's very true, but I don't think we can be too critical of them. Things have been moving very fast around the world, international economic organisations as well as governments have had to adjust very, very quickly.
BENSON:
Next year perhaps for Australia, growth of 2.4 per cent if the OECD is right, that doesn't have you on the sort of track that that you need to get the deficit dealt with in the schedule you were outlining in the budget.
BOWEN:
Well, no I think the OECD has actually indicated that they see budget projections as fairly conservative – they certainly agree with the thrust of them and we're pretty much on the same page as the OECD in terms of projections going forward.
BENSON:
Now you're introducing laws today that are imposing new restrictions on lenders but you're exempting retailers and topically car dealers for example won't be subject to these new restrictions – fairly patchy protection for consumers?
BOWEN:
Well it's very important for them to get the balance right here between compliance costs for business and protection for consumers and that's what we've worked pretty hard at doing. It's appropriate that there be protections for consumers. As a Western Sydney MP for example, I see the day-to-day impacts of irresponsible lending, particularly in the fringes of the market which we need to deal with.
Having said that, we do need to be very careful – that's why I've made the changes that I have, giving banks a longer period to introduce responsible lending to change their systems – I think that's appropriate and also, exempting point-of-sale operators until we can do a further review and talk to the industry about the best way forward because there are real issues in terms of compliance costs for businesses which may provide credit from time to time for which it's not their central focus.
BENSON:
Could I finally ask you a question in your capacity as a Cabinet Minister responsible for economic issues about perhaps the most celebrated public servant in the Treasury right now, Godwin Grech, do you know him yourself?
BOWEN:
I have met him, he's been before the ERC of Cabinet, I've met him but I wouldn't say I know him.
BENSON:
Well he's now been identified in many, many reports as a Liberal Party mole, what's his career outlook in the public service under a Labor government?
BOWEN:
Oh look there's a Federal Police inquiry and all this underlines the need for Malcolm Turnbull to fully cooperate with the police inquiry – he's been walking away from that overnight I think. He needs to reconfirm that he will fully cooperate with any inquiry. Over and above that, the inquiry has to run its course.
BENSON:
But you don't need an inquiry to know that Godwin Grech doesn't have much of a future under Labor?
BOWEN:
Well there's a Federal Police inquiry and I won't be commenting over and above that. There are allegations out there in the public sphere but they are for the Federal Police to investigate.
BENSON:
Do you know if Godwin Grech is going to work at the moment?
BOWEN:
I believe he's on leave.
BENSON:
What sort of leave?
BOWEN:
Well I don't know, I understand he's on leave.
BENSON:
Indefinitely?
BOWEN:
That's a matter for the Treasury.
BENSON:
Ok I'll leave it there. Chris Bowen, thank you very much.
BOWEN:
Good on you, cheers Marius.