HOST:
For a Government view on the falling rates, I'm joined by the Assistant Treasurer David Bradbury. David Bradbury good morning.
BRADBURY:
Good morning, good to be with you.
HOST:
Now, what will the big banks do, is the question. So far we know from only one institution, the Bank of Queensland, cut the rate by 20 out of 25 official basis points cuts. Is that good enough?
BRADBURY:
Well I think most Australian consumers, and particularly those that have a mortgage with a bank, would be expecting the full 25 basis points will pass through and I think if you go and have a look at what the Reserve Bank Governor had to say in his statement yesterday, there's very strong evidence there that suggests all of the factors previously been held up as the reasons why banks were not in a position to pass on the full rate cut are no longer there. If you have a look, there in black and white, the Reserve Bank Governor makes the point that conditions for Australian banks have been such that they have not had difficulty accessing funding. Now, it's been the question of access to funding that has been the principal reason used in the past. I think that there is no justification for withholding any of the 25 basis points, the full rate should be passed on and of course we've done a whole series of things to make it easier for consumers to pack up their bags and to take their business down the road where a better deal is being offered by another institution and I encourage them to do that.
HOST:
Can I ask you about that statement by the Reserve Bank Governor, Glen Stevens. Some of the things he's said – growth is weaker, labour market has generally softened, resources investment peaking at a lower-than-expected level next year. The Reserve is not really too upbeat about the economy is it?
BRADBURY:
That's not entirely correct in terms of the characterisation of what the bank has said. If you look at the statement, the Governor says growth has been running close to trend. He notes that inflation is contained, notes that unemployment continues to be quite low, notes the investment pipeline and all of these factors, of course, paint the picture of an economy that is performing very well against the backdrop of some very challenging international developments.
HOST:
Maybe that's the past, because he said the growth outlook for the next year looks a little weaker.
BRADBURY:
Well, the fact is we continue to grow and we continue to grow solidly. Now, I've seen some comments from Mr Abbott recently where he was out there saying that and Abbott government would return Australia to growth. Now let's just paint the facts here. The reality is this country has been growing for the last 21 years – 21 years of consecutive growth. We continue to grow; we grew through the global financial crisis when very few other countries were able to manage that. We continue to grow and as the Reserve Bank Governor has identified in the statement, we're growing at rates that are close to trend.
HOST:
The description of the Bank's cut is that it's cutting to near-crisis level – I mean this cut and anticipated cuts. Near-crisis levels, is that an accurate description?
BRADBURY:
If you have a look, these things have to be considered in their international context. We still have quite a deal of room available for the Reserve Bank if they are in a position and choose to cut rates in the future, but of course one of the key reasons why that is the case is because we continue to run a very tight fiscal program. Our fiscal policy has certainly put us in a position where we are looking at returning to a budget surplus before just about any other competitor economy around the world. When you run a tight fiscal policy you give yourself and the Bank the opportunity and the flexibility to take decisions such as the one it took yesterday.
HOST:
And David Bradbury, just quickly, I understand you're speaking from St Marys station in your Western Sydney electorate and you're doing a bit of leafleting this morning, is that just part of the never-ending campaign that is modern politics or are you gearing up for the election that's got to be within a year?
BRADBURY:
No, look this is something I do on a regular basis, but today I'm handing out my petition to fight the $1.7 billion worth of education cuts that the State Liberal government have been inflicting upon people.
HOST:
Are the people of St Marys station saying anything in particular to you? What sort of topics are they volunteering to you?
BRADBURY:
I think that people, particularly on the topic of education cuts, I've had a very positive response this morning. Right across, regardless of the political backgrounds of people, people find it difficult to understand why governments would be cutting funds to education when it's so important to our future. So I'm encouraged by the response I've been receiving this morning, but this is just part and parcel of being a local Member, working the electorate hard and making sure you stay in touch with the issues of concern to people.
HOST:
David Bradbury, thanks very much.
BRADBURY:
Good to talk to you Marius.