GLEN BARTHOLOMEW: Well Prime Minister Kevin Rudd is among the world leaders in Pittsburgh today for the G20 meeting which will look at the economic road ahead for the world. The meeting will be looking at ways to ease out of the stimulus packages introduced to fight the global downturn, as well as ways of building structures to prevent any similar collapse in the future. To look at Australia's response to the international economic issues we're joined by the Finance Minister Lindsay Tanner, he's speaking with Marius Benson.
MARIUS BENSON: Lindsay Tanner, the G20 is getting set to meet and it'll be discussing stimulus packages and what to do about them. the storm of the financial collapse is passing and the question in Australia domestically is the same, when will you stop pumping at quite this rate?
LINDSAY TANNER: The government's stimulus package is designed to wind down over time. Things like the small business incentive for investment and the first homeowners boost are things that will actually come to an end in the fairly near future and we've got a staggered withdrawal of the stimulus set out in the budget. There is a wider question internationally of course, as to how the major economies around the world gradually withdraw the stimulus. That's still very much an open question, but we believe the Australian economy is still very fragile and that it would really endanger the process of recovery to prematurely withdraw the stimulus.
MARIUS BENSON: The Australian banks seem to be doing very well in, what are, broadly difficult times. The Financial Review has figures this morning showing that their net profit on loans has gone up by 10 per cent over the last year. Are you concerned that they're profiting from difficult times? Because that last year has seen them not pass on in full interest rate cuts provided by the Reserve Bank.
LINDSAY TANNER: You have to be very careful when analysing figures of this kind because what that doesn't tell you is what happened in the year before then, so you need to actually look at the wider picture in order to see when there is anything untoward occurring. I don't believe that we can take any message from these figures by themselves. There is a wider question about competition in the sector that the Government is concerned about and we are examining very closely. We've been focused on ensuring that our financial system remains stable in circumstances where the global financial system has been close to collapse at various points in the last 18 months. But clearly, there is a longer-term question about whether the level of competition in the banking sector that we saw prior to the financial crisis is going to return.
MARIUS BENSON: On Monday, the Treasury Secretary Ken Henry will be before the senate hearing on the stimulus spending of the Government. Malcolm Turnbull has said you'll just get the government line from Ken Henry, he's essentially an ambassador for the Government. That's an accurate description of the position of the Treasury Secretary?
LINDSAY TANNER: Well no it's not an accurate description, in fact, the true position is that we have taken Treasury advice, so Ken Henry will be advocating for the advice that he gave to the Government which the Government accepted. So I think that the attacks that have been made on him are completely uncalled for. He's a very highly regarded public servant who, in the most difficult circumstances imaginable, has given the Government serious advice, both on financial regulatory issues and on budget issues about exactly how and to what extent we should stimulate the economy. We followed that advice so it's hardly surprising when he appears before a senate committee he'll be defending his own position.
MARIUS BENSON: On a micro-economic question, federal politicians are to get a three per cent pay rise following last year's pay freeze. Barnaby Joyce the National's leader in the senate says, that sort of pay is completely inadequate, the Prime Minister should be getting a million dollars a year.
LINDSAY TANNER: I believe we're paid roughly about the right level. We aren't paid as high as some senior public servants for example. Our pay is certainly much lower than many people in the private sector, but I believe equally it's important that we stay in touch with the wider community. Politicians' pay in this country will never be agreed by everybody, it'll always be a controversial issue, but I have no problem with the broad settings of the level of pay for members of Parliament as they exist now and as they have existed for a long time under governments of both persuasions.
MARIUS BENSON: Lindsay Tanner, a final question on grand-final eve, Cats or Saints?
LINDSAY TANNER: Cats, comfortably if it's dry. If it's raining which looks like a possibility then all bets are off. I've been saying Geelong would win pretty comfortably all year and so far they've done the right thing by me, as much as I'd like Essendon to be in there. But I think if it's raining it'll be a very interesting game because the Saints are very tough and very strong, but I think Geelong is just, clearly the best side in the competition.
MARIUS BENSON: Okay, enjoy the game, Lindsay Tanner, thank you very much.
LINDSAY TANNER: Thank you very much, Marius.
GLEN BARTHOLOMEW: Lindsay bomber Tanner still recovering from Matthew Lloyd's retirement no doubt, one of the Essendon greats bowing out this week.
-ends-
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