GLEN BARTHOLOMEW: The Prime Minister has foreshadowed new moves to boost the economy, saying the Government may be prepared to guarantee loans for Australian businesses that have had their funds cut by overseas lenders.
Speaking in Adelaide last night, Mr Rudd expressed concern at foreign banks cutting back lending in Australia, and declared, when markets fail, governments must act.
Well, to look at the latest moves to boost the economy, we're joined by the Finance Minister, Lindsay Tanner, and here to speak with him, is Marius Benson.
Lindsay Tanner, with Marius Benson, now.
MARIUS BENSON: Lindsay Tanner, President Obama didn't obviously go to any specifics of financial or economic policies in his inaugural address, but in broad terms he painted a pretty grim picture.
LINDSAY TANNER: I've just come back from the United States, and there's no doubt that there's a very serious problem facing the incoming administration, but I've got a lot of faith in the resilience of the US, its economy, its Government, and I think the confidence that will arise from the change in administration, will be a big factor.
MARIUS BENSON: Okay, can I ask you about the local policies, the specifics that were referred to by the Prime Minister last night, he was talking about helping local businesses, who find they've run out of loan funds, or may run out of loan funds, because international lenders are a bit cash-strapped?
LINDSAY TANNER: Well this is a specific problem which the Government's giving careful consideration to, and it's early days in terms of determining what, if any, action may be required.
But the problem is that we have many major commercial property businesses, things like shopping centres, that rely on regular, basic loan finance, that will mostly come from Australian banks, but there'll be some money in there from foreign banks. They're usually through syndicates, where there will actually often be quite a large number of different banks contributing, because it's a pretty secure investment, with profitable businesses, and a problem may arise where individual foreign banks, because of the extraordinary circumstances in their home base, may not renew that lending.
Now it's too early to say how much this will occur, but that's just something the Government's keeping a very careful eye on, and discussing with Australian banks.
MARIUS BENSON: Now the Opposition's expressing scepticism about that latest suggested move, they're also saying that so far, you the Government, has blown the $21 billion surplus pretty comprehensively, and there's no evidence yet that you've stimulated economy, no evidence that you've created new jobs. Is there hard evidence of new jobs coming from the stimulus packages provided?
LINDSAY TANNER: Well, Malcolm Turnbull made two extraordinary statements yesterday. One was that the stimulus package of $21 billion that went out in December, has had no effect, and that that money doesn't matter. Well, for somebody on his income, maybe the amounts of money involved there don't matter, but for ordinary working people, getting $1000, or $1400, to be able to use to spend or partly save, does really matter.
We believe it has had a significant impact, but it's too early to get full statistical evidence of that, that takes some time to flow through.
And the second extraordinary statement he made, was to contradict the Government's call for companies to do everything possible to keep people in jobs. As far as he's concerned, workers are just like machines, and if a company feels it needs to discard them, it can. We have a different view.
MARIUS BENSON: Okay, can I take a perspective from the retailers? Gerry Harvey, one of our biggest retailers, says look, thanks very much for that $10 billion in December, but it's not having any impact in January, what about kicking another stimulus into the economy? Will that happen?
LINDSAY TANNER: Well obviously Gerry Harvey's got a degree of self interest here, that he is keen for spending to occur in his stores, and that's entirely reasonable, because that's what his role is. These are policy decisions for the Government of course, and we still yet don't know exactly what the impact of the stimulus package in December was, and we are confronted with a range of different economic problems.
We just talked about the problem of investment in major commercial property, for example, so we stand ready to take whatever action is required, to sustain jobs, to sustain growth, that's the central objective of the Government's economic policy in these very, very unusual and challenging circumstances.
MARIUS BENSON: So do I understand you to be saying in terms of another multi-billion dollar stimulus package, maybe, maybe not, we haven't decided?
LINDSAY TANNER: We've made it plain from the time that we announced the economic security strategy, the $10 billion package last year, that if and when further stimulus was required, then we would be prepared to do that, but that of course is a matter of ongoing judgement, so we're ready to take whatever action is required, but we're certainly not going to speculate publicly about the details of all of the options, it's important that we maintain our readiness, and we do everything we can to promote jobs, and promote confidence.
MARIUS BENSON: Lindsay Tanner, thank you very much.
LINDSAY TANNER: Thank you very much, Marius.
GLEN BARTHOLOMEW: Finance Minister, Lindsay Tanner, with Marius Benson there.
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