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RICHARD QUEST: Minister, Australia in any international event Australia tends to come to the table with a slightly better hand than most other G20 countries because you are enjoying growth, you’ve even started a tightening process and you have a stimulus package that appears to have been more effective. But on the question of regulatory reform, banking reform, what do you bring to that question?

SIMON CREAN: I think that we demonstrated the lesson from the crash of the 80’s that it was necessary to get the balance right between competition and openness of our banking system but at the same time a regulatory reform and transparency and openness, if you like.  I think we bring that to the table, I think it’s the balance that the G20 group of nations is seeking to refine I think we can bring that balance.

RICHARD QUEST:  But when you look at the proposals that are now starting to come on to the table, particularly of course President Obama’s splitting of banks, no proprietary trading, that would hurt and hit Australian international banks as well.

SIMON CREAN:   Well let’s see what the details are, we will have our own views to say about that at the appropriate time, but I think that what we do come with is a message that is not just reactive to the immediate circumstances and the difficulties that the US is going through but one that is born out over a couple of decades of operation.

RICHARD QUEST:  The Blue Sky thinking that’s required now and certainly here in Davos and as you look towards the future, that is the crucial point, get it wrong now and we will be paying for this in another crisis, would you believe that to be the case?

SIMON CREAN:  I think that’s right, but I think it’s not just the question of the regulatory reform that we’ve got to look to here, but the big message that we also bring is the need to continue to undertake structural reform to make the economy more competitive and more productive that requires decisions within, and in the global context, that adds to that competitiveness.

RICHARD QUEST:  Your stimulus package was more successful than most but the critics would say that that was because China and Asian nations was the second leg, if you like, of your stimulus package.

SIMON CREAN: Well the stimulus package was effective for that reason, but it was also effective because our consumption dimension, which was only a third of our stimulus package, the consumption dimension worked because we had the safety nets in place, we had a compulsory retirement income policy which we put in place, we have a health policy. People were prepared to spend because the security, including the security in employment, was there. But the China dimension is important but it’s not the only part of the equation. The stimulus packages that other countries were undertaking were essentially in infrastructure, what does infrastructure need, it needs resources, iron ore it needs the sort of stuff that Australia supplies. So it wasn’t just China, it was Asia as a whole, it was Korea, it was Japan, it was the ASEAN countries, all of them demanding the sort of resources that we have.

RICHARD QUEST: Now we move into phase two or phase three, there has already been tightening of monetary policy in Australia and there is likely to be further tightening in the months ahead.

SIMON CREAN: Well you have been reading what the pundits have to say about that Richard, this is a matter for the Reserve Bank and they will make their decision in due course. They are independent but we continue to reinforce on them the importance of understanding the need to get the private sector back in and engaged. A lot of the stimulus package has been government expenditure it has been because the private sector hasn’t been investing and what we want to do is to get the balance back the other way.

ENDS

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