Listen to my interview with Marius Benson on ABC NewsRadio about interest rates, Australia's economy and dental health issues.

Interview on ABC NewsRadio with Marius Benson.

Subjects: interest rates, national dental scheme

Announcer:

Three days after the Reserve Bank cut interest rates, the big four banks have still not announced their response and there is now a general expectation that perhaps they won’t be matching the official reduction. But while the wait for the banks to decide continues, yesterday there was some good economic news showing the economy growing at a strong annual rate of 2.5% and twice that over the past six months.

To look at the economic knowns and unknowns this morning, Marius Benson is speaking with the Assistant Treasurer Bill Shorten.

Marius Benson

Minister Shorten, is the Government claiming credit for these strong growth figures?

Bill Shorten:

I think Australians should take credit for the strong growth figures.  Although I’ve got no doubt that if the growth figures were very bad we’d get blamed , so we’re pleased for the nation that we are seeing some growth and its certainly compares very well to nearly everywhere else in the Western world, especially the OECD nations.

Marius Benson

Although it’s not really the nation is it? It’s Western Australia and Queensland. Everyone else is not doing very much or going backwards if you are in South Australia or Victoria.

Bill Shorten:

It’s no doubt that it’s a multi-speed economy and engineering, construction and mining have been contributing significantly to the outcomes, but I think there are some positive signs. I wouldn’t put it any stronger than that, and I wouldn’t want to oversell, but we are seeing some private demand, we are seeing indicators that show some parts of Australia, even within the states you mentioned, are doing ok.

Marius Benson

Can I turn to the banks now because its three days now since the official rates were cut by the Reserve Bank and still no news from the banks. Does that silence from the big four look like collusion to you?

Bill Shorten:

Well let’s wait and see what they actually do. I think the banks are putting more pressure on themselves and creating uncertainty in the economy than they need to. I have no insight into what they’re thinking, but I get the impression that banks are suffering from a ‘won’t lead’,’ won’t follow’, ‘won’t get out of the way’ syndrome.  I can’t see how they justify keeping 25 basis points to themselves though. That is just very harmful to confidence in the economy before Christmas.

Marius Benson

Are you talking to the banks yourself?

Bill Shorten:

No.

Marius Benson

History suggests that if they take this long it’s not going to be good news. Do you accept that?

Bill Shorten:

Well I accept that there is a case for reducing the rates and passing them on to consumers. I accept that taxpayers backed up the banks in 2008. I do accept that Australian banks borrow money from overseas and it’s hard to borrow money overseas at the moment. They’re getting pressure on their liquidity, and they’re feeling pressure, but so are Australian businesses, so are Australian households, so are Australian consumers. You shouldn’t look at every transaction as a one-shot game where you have to win or lose. I think the banks have to be around for their consumers. If the smaller institutions can do it, why can’t the bigger ones?

Marius Benson

The Financial Review is reporting this morning that the thinking inside the big four banks is that they want to pass on maybe none of this cut from the reserve and they want to hold onto some of the next one.

Bill Shorten:

Yes I saw that. That is very disturbing. For the banks to do that would be harmful to the confidence of Australians. Our economic performance is good, but it can’t be taken for granted.  It doesn’t matter if it’s the equities market, it doesn’t matter if it’s the retail industry, it doesn’t matter if its new housing, it’s all about confidence in the Australian economy and the banks have their role to play in that.

Marius Benson

Bill Shorten, can we finally turn to a new topic. There are renewed calls today for the Government to introduce a national dental health scheme. There was a report to the Government on that issue, the Brotherhood of St Lawrence says there are millions now that can’t afford dental care. Realistically, is a national dental scheme even a distant prospect?

Bill Shorten:

Dental care is an important debate in Australia. That’s why the Government is training up new dental interns, that’s why we’re subsiding teenage dental checkups already. More work is going to have to be done there. The Government has set up a National Dental Council to look at all the options, back to what you refer. It is an issue. In terms of what the final picture will look like though, it would be premature of me to make an observation.

Marius Benson

So nothing this term?

Bill Shorten:

Well it would be premature of me to make an observation. I will say this, dental care is as much about social justice as it is about health.  It’s the same with disability insurance, it’s the same with reform to aged care.  This is a nation that not only needs to polish its economic credentials, but keep working on making sure all Australians get a fair go. We’ll keep working on this but I couldn’t give you a timetable Marius.

Marius Benson

Ok, Bill Shorten, thank you very much.

Bill Shorten:

Thank you