SUBJECTS: Labour force figures, stimulus package, interest rates, Barnaby Joyce, banks, competition policy, state debt, US debt, foreign investment.
MARIUS BENSON:
Chris Bowen, the unemployment figure yesterday down to 5.7 per cent from 5.8 to universal acclaim. It's seen as a great result and is the call for the Government to now ratchet down its stimulus spending in response to that good figure. But the Government says it's marching on; no change to the stimulus program.
CHRIS BOWEN:
Well, it's a very welcome figure, Marius. We can't get carried away with month-to-month figures but on any objective analysis, Australia's unemployment rate is a remarkable result when compared to any other comparable nation. The stimulus package has already peaked. It will be a contractor of growth over the next 12 months. In other words, it will actually be reducing the rate of economic growth as the stimulus winds down. That's the way we designed it and I think, frankly, that these figures endorse that strategy.
BENSON:
Well, the unemployment figure is the good news. The bad news is that a recovering economy means an increase in interest rates. They'll probably be up by fully one per cent by universal expectations within a year.
BOWEN:
Well, of course I don't have the luxury of speculating or commenting on interest rate movements, other than to say this: the Reserve Bank reduced interest rates very significantly over the last 12 months. Now, people who say we need to withdraw the stimulus so that the Reserve Bank doesn't need to increase interest rates miss one very important point. What they are effectively doing is calling for the stimulus to be withdrawn immediately and that is the equivalent of asking the Reserve Bank to increase interest rates back to its pre-crisis levels.
BENSON:
The new Shadow Finance Minister, Barnaby Joyce, has been tossing up a few ideas in the financial world. One is that he says the banks now have excessive power, as a result of excessive concentration. He says every time a person goes to an ATM and sees that little sign saying, 'we're going to charge you two bucks for pressing the button', that you know that the banks have excessive power; it's time to break up that excessive power, that concentration.
BOWEN:
Well Marius, Barnaby Joyce has long had a populist and unworkable competition policy. He's long held the view that the Government should be much more interventionist in competition policy and break companies up. The difference is that he's now the Opposition's second most senior economic spokesperson and when he speaks, he's speaking on behalf of the Opposition.
Now, on the one hand, Barnaby Joyce says it's too interventionist to see the Government introducing market signals and a price on carbon. But on the other hand, he says it's okay to send a message to Australian businesses that a Liberal-National Party Government may come in at any time and break up your business.
Barnaby Joyce is a very worrying prospect for Australian business. He's erratic and irresponsible, and he needs to clarify those comments today.
BENSON:
A couple of other ideas from Barnaby Joyce: he says some Australian states are now at a level of debt that they will have difficulty repaying, particularly Queensland.
BOWEN:
Look, I thought that was an extraordinarily irresponsible statement. I mean, a lot of attention's been placed on his comments about the United States, but I agree with you Marius, I thought the most remarkable comment in that interview was his irresponsible claim that Australian states may have an incapacity to repay debt. I mean, a) it's wrong, Mr Joyce needs to get a briefing on the credit rating of Australian states, which are very solid; b) it's entirely irresponsible talking the nation down, talking the debt levels of Australian states up. I mean, Mr Joyce is the second most senior economic spokesperson for the Opposition. He really needs to stop engaging in these irresponsible thought bubbles and start engaging in serious policy development, and stop talking the economy down.
BENSON:
What about Mr Joyce's suggestion that the American Government may be in a position where it may default on debt, triggering an economic Armageddon?
BOWEN:
Well, I thought it was extraordinary that the Shadow Finance Minister can't see that there's global warming but he's predicting Armageddons about the United States debt levels. And again, irresponsible. I mean, he is not in a position where he can be going around scaremongering about the world economy like that.
BENSON:
And finally, Barnaby Joyce wants an outright ban, reportedly, an outright ban on Chinese state-owned companies investing in the resources sector in Australia.
BOWEN:
Look, until recently, for the last 30 years or so, it's been a bipartisan policy for both the conservative side and the Labor side that foreign investment was a good thing for Australia. The elevation of Mr Abbott and Senator Joyce really bring that into question.
We think that foreign investment is good for Australian jobs. We think it's vital for the ongoing strength of the Australian economy. Mr Joyce, again, goes off on these populist rants. But as the Opposition's Shadow Finance Minister, what he says is now noticed internationally. He needs to be a lot more responsible in his comments.
BENSON:
Chris Bowen, thank you very much.
BOWEN:
Good on you. Nice to talk to you.