Markets: Bowen's big picture

The treasurer continued his charm offensive on the business community this morning in a speech which included "potential bright spots" on the global economy.

Chris Bowen came to a financial industry forum and received a more than polite reception. In fact it was downright warm, particularly after the treasurer confessed he thought of himself as “soft” on the finance industry.

So how does he account for the government’s unpopularity with business, including many at a Sydney breakfast this morning?

“Business doesn’t agree with government at all times,” Bowen told Markets Spectator. Company executives are answerable to shareholders. Government to the public, he says. “My door has been open to business,” says Bowen.

The member for McMahon, fighting to retain his seat in parliament, could not leave politics aside in the midst of an election campaign. Bowen reiterated he believes Opposition spending plans will leave the federal deficit $70 billion in the red.

Earlier this morning, in a speech to the Financial Services Council, Bowen was cautious on the global economic outlook. The world, he says, has “potential bright spots” including signs the Japanese economy may recover after more than three decades of very little growth. He sees “some encouraging signs” in the US economy but adds it is “too early to call the European problems over”. China, says Bowen, is “deliberately” slowing its economy – calling it "a good thing”.

Unsurprisingly Bowen praised the work done on the Australian economy since the Labor Party came to power six years ago. Australia’s economy is 14 per cent bigger now than in 2007. Australia is now the 13th largest economy in the world, up from 16th in the same period.

The spending the government undertook following the bankruptcy of Lehman Brothers in 2008, “cost in terms of the budget but it was the right thing to do”, says Bowen.   

But the treasurer did admit the economy faces “some headwinds” following the end of the mining investment boom. Bowen offered no specific solutions except to say the economy must “expand and diversify”. He did warn Australia not to expect any big mines to be constructed in the years ahead.

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