2 September 2015
Transcript - #2015192, 2015

Interview with Ross Greenwood, Sydney CPO

ROSS GREENWOOD:

Treasurer first things first, economic growth in this last quarter is slow, I mean point two per cent. The question is, even though the economy is in transition, do you believe it will transition quickly enough before we see quarters where growth becomes negative?

TREASURER:

Look, there are some good signs Ross. The fact that we’ve been more resilient than other commodity based economies like Canada, Brazil, or even New Zealand actually, is a good sign. Also importantly, we’re starting to see the services sector pick up, which is the biggest employer in the economy, but also just a small fraction of our exports. The new Free Trade Agreements with China, Korea and Japan are going to open up massive opportunities for new jobs in those areas.

ROSS GREENWOOD:

Well you’re banking on growth coming from Free Trade Agreements, China is the big one. But of course you’ve got unions and the Labor Party fighting against that [inaudible]…

TREASURER:

[inaudible] …we are an exporting nation, we earn more money, we have more jobs when we export more. If you can remove the barriers to trade, if you can remove the barriers for our exports, we will get more jobs and we’ll get greater prosperity. The fact that the Labor Party is fighting with itself over this, and with the unions, just illustrates the fact that they cannot stand in the way of an economic plan that delivers these agreements. We need these Free Trade Agreements if we want more growth and more jobs.

ROSS GREENWOOD:

But doesn’t slow growth right now – I mean less government revenue, less tax coming through the door, therefore less flexibility to be able to invest to try and build the economy long term.

TREASURER:

Well we expected these figures. So it was two and a half per cent right on our Budget estimate in the last twelve months. We had better jobs growth than expected [inaudible].

ROSS GREENWOOD:

Is a recession a risk in Australia right now? You spoke about those other countries, you spoke about the worries that are out there. A recession with these low growth numbers wouldn’t be necessarily outside the bounds of expectation?

TREASURER:

No, there is no risk of recession in Australia. But, if we don’t continue down the path of delivering Free Trade Agreements, getting rid of taxes, getting rid of regulation, and opening up more of the Australian economy to competition, then we will risk significant job losses and slower economic growth.

ROSS GREENWOOD:

And is the economy transitioning fast enough? I mean that Aussie dollar today below 70 US cents. But it takes time to actually build that through – the manufacturing sector for example which  has been really ripped apart over the past few years.

TREASURER:

Well all of the fundamentals are actually in pretty good shape for the Australian economy. We’re getting the Budget deficit down, we’re seeing unemployment plateau and start to come down. We’re seeing good job growth, retail sales are up, motor vehicle sales are up, business confidence is up, consumer confidence is up, infrastructure spending at record levels – we’re starting to see good stories come through. So I’m more optimistic about the direction of the Australian economy, particularly given when you look at comparable economies you can see them in recession. We’re actually growing at around two and a half per cent, and we can do better if we just get a few things like the Free Trade Agreement through.

ROSS GREENWOOD:

Sure, but it’s not the greatest vote of confidence from international investors to have our dollar plunging to its lowest levels in six and a half years.

TREASURER:

Well, we are in many ways victim to the strength of the United States dollar. We’re victim to the perceptions of some currency traders that Australia is heavily exposed to China. In fact, I would argue that the diversification of the Australian economy is one of the great stories of the last few decades. When mining is doing well it picks up the slack for other parts of the economy that are not doing so well. Now that mining is struggling, what we are seeing is the rest of the Australian economy pick up. Bear this in mind, mining and resources represent just 10 per cent of our economy, the other 90 per cent of the economy is starting to lift – agriculture, manufacturing in particular because of the low Australia dollar, and we’re starting to see the services sector pick up as well.

ROSS GREENWOOD:

You fly out to Ankara tonight, the G20, Australia hosted that last year. There were promises made about trying to lift economic growth over the next four years. Given what we’ve seen in the emerging economies – Brazil, Russia, Australia even, is it possible that those targets can now be met?

TREASURER:

Well it is because those targets were not relying on a certain growth level across the world – they were relying on government action. In our own case, our small business package in the May Budget and the Free Trade Agreements that we’ve negotiated with China, Korea and Japan, all add to our delivery on our own growth targets – so they’re the things that are factored in. Importantly, you’re starting to see other reforms like the asset recycling, deliver cranes in our cities. Right here in Sydney we have 73 cranes operating in the Sydney CBD alone. It’s a terrific story, we want that to go to the rest of Australia. One of the great stories out of today’s numbers, is that Western Australia is defying all the negativity and is actually growing quite well given how hard it’s been hit by the downturn in commodity prices. So you can see some good signs.

ROSS GREENWOOD:

You will not be ignorant to the word around the place, even from some within your own party, that maybe your own job is under jeopardy – do you feel that? I mean is it one of those things that you simply get up and go to work every day? But you can’t be at least unconscious that that word is out there?

TREASURER:

The only jobs I’m worried about are the jobs of everyday Australians Ross. They’re the only jobs I’m worrying about, and our economic plan is delivering in that.

ROSS GREENWOOD:

But you’d like to be around to see the fruits of many of these things you’re talking about now – the transition of the Australian economy…

TREASURER:

It’s happening, it’s happening Ross, that transition is underway, it’s encouraging, it’s positive. I am more positive about Australia’s future than at any other time. What we’ve just had is the equivalent of a game of footy, where you [inaudible] that hard fought win. It was a tough quarter, but we still had growth, and we’ve shown the resilience and fortitude of the Australian people and we will do better in the future.

ROSS GREENWOOD:

Are you as confident about our political process and the way in which it works and delivers the change that’s necessary?

TREASURER:

At times it might not be pretty, but it’s delivering the goods. Less regulation, fewer taxes, more jobs, better economic growth into the future.

ROSS GREENWOOD:

Joe Hockey thanks for your time.

TREASURER:

Thanks Ross.