Kerry O’Brien’s big interview with Kevin Rudd on The 7.30 Report last night was a disappointing effort from both men.
For starters, how could a 10-minute exchange not once bring in the key issue of Australia’s free-falling currency which is back to US65c this morning?
If the dollar is falling faster and further against the US than virtually any other first-world currency, then surely this should be raised with the PM?
Kevin Rudd told O’Brien that he believes in “levelling with the Australian people” but then kept waffling on the obvious question about that problematic $1 trillion in household debt.
“There’s no point gilding the lily here,” said the man who kept gilding the lily.
The two biggest questions at the moment are the strength of the Australian financial system and the strength of the public sector to stand behind it if necessary. The plunging dollar suggests the world doesn’t rate us very highly.
Another obvious question to ask the PM is for an honest update of the budget position which won’t finish up anywhere near a $20 billion surplus in 2008-09.
After all, s674 of the Corporations Act deals with continuous disclosure and requires that companies publically release “information that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of securities”.
Surely, everyone the world over who is dumping the dollar and deciding whether to roll over Australia’s $620 billion foreign debt deserves to be told about the budget hit Canberra is taking as the resources bubble bursts. But Kerry didn’t even ask the question.
Stephen Bartholomeusz raised an excellent point on Business Spectator last night pointing out that the Britain’s guarantee of new funding for its banks will put Australian banks at a significant disadvantage.
Kerry O’Brien didn’t even mention the whole question about guaranteeing deposits, although at least Chris Uhlmann opened up on this issue on AM today before getting side-tracked onto the utterly irrelevant issue of increased pension payments.
Global pensions, like all public sector spending on anything not related to financial bailouts, will be going one way – down. And it will be all those retired Ford and General Motors workers who lead the way when the inevitable wave of bankruptcies hits Detroit.
Whilst the $1 trillion in household debt is worth mentioning, the PM wasn’t ever going to provide commentary on house prices to Kerry O’Brien.
Paul Keating’s big point about harnessing the $1 trillion superannuation pool for home loans was another issue worth mentioning, but this didn’t come up either.
Whilst Ali Moore is back filling in for Jon Faine on 774 ABC Melbourne, maybe she should be parachuted back onto The 7.30 Report until the global financial crisis has passed.
· Listen to John So defend his financial management and Tom Elliott defend hedge funds in the early hours of last Sunday morning on RRR.
It sure would be good to have the interviewers either calm down or get a better proportion of issues before interviewing people such as the PM and treasurer. If the 730 report chooses to focus on economics, why not always slot in Ali Moore who, after all, headed LL Business in its early days and seems to know how to dig into complex topics.
Mr Mayne your grasp of the current economic situation is worse the George W and that is bad. If you are unable to comprehend for goodness sake SHUTUP.
Why is Steve such a dope? Why would the currencies not fall when the commodity markets are falling? How does Steve keep his job? these are the questions ringing in our ears!
Well Stephen Mayne, I for one did not think your very incisive article deserved the crap reviews it drew. Kerry O’Brien was so so far off the mark, and thanks for saying so. And Rudd just kept repeating his set lines over and over.
The crash of the Australian Dollar is far more than the result of commodity prices. At the end of the day it gets down to assessment by buyers and sellers of currency as to the certainty of leadership that exists in the administration of Government and the security – or lack thereof – that emanates from our leaders as they run the economy of the Country. Need one say more.
One wonders whether Rudd and Swan understand this anyway. We have heard that they understand bank balance sheets, but it goes far deeper than that.
If the trillion or so dollars of super is used for home loans, it will be worth leaving the country. The solution to this crisis isn’t engineering more debt to buy unproductive assets. Instead the super, or future fund, or whatever resources Australia has at it’s disposal, should be used to encourage investment in production. We won’t dig our way out of any hole by spending more money on houses.