Dr Martin Parkinson on the Australian Economy

Dr Martin Parkinson, Secretary to the Treasury, gave a speech to the John Curtin Institute of Public Policy titled Challenges and opportunities for the Australian economy.

In his speech Dr Parkinson discussed the rise of Asia on Australia's economy:

The consequences of the growth of emerging Asian economies can be characterised as coming in three waves. The first wave is the expansion of the mining sector that we are currently experiencing, most notably here in Western Australia. The second is the growing global demand for our agricultural products. And the third is the rise of the middle class in the Asia-Pacific region.

He also discussed some of the issues around tax reform.

One issue he also touched on was that of our perception of our economy:

Joining Professor Ross Garnaut and me on the panel were Professor He Fan from the Chinese Academy of Social Sciences, and Masahiko Takeda of the IMF. Mr Takeda and Professor He Fan both commented on what they, as outside observers, perceived as the strange disconnect between Australia's economy and Australians' perception of it.

Despite the continually good news about our short-term and medium-term prospects from sources like the OECD and the IMF, there is considerable, persistent and, in my view, unwarranted pessimism.

I wonder how much of the pessimism we express is due to the fact that our Governments are not running large surpluses? Perhaps the income tax cuts promised in the 2007 election, and delivered during the GFC, have not just cost our budget dearly; perhaps they have also indirectly had a negative effect on our mood.

Anyway, judging by the transcript, it appears to have been an interesting speech.