Australia robust but not immune - Treasury
(4 June 2012 – Australia) Australian Treasury boss Martin Parkinson, told a Senate hearing that the country’s economy is robust enough to withstand current global uncertainty, but would not be immune.
Dr Parkinson warned that the situation in Europe was 'quite fluid' and the local economy would not be immune if the situation deteriorated further.
He said that at this stage there was little impact on Australia's trade or banks from the European crisis.
'From where we sit, our economy is quite sound and our prospects are very good,' he told an estimates hearing in Canberra.
He believes it is still important to get the budget back to surplus while the scope was there through monetary policy.
Australia's banks were better financed than they were in the run-up to the global financial crisis, Dr Parkinson said.
They could maintain existing lending levels without going into wholesale funding markets should the global financial system clog up.
Dr Parkinson painted a grim picture for Greece, if it left the eurozone.
'Every debt that is denominated euros would jump dramatically, its banking system would collapse,' he warned.
Dr Parkinson said it would also be hard to see how Greek firms would not be 'pushed to the wall'.
'So within Greece, one could see a very, very serious fall out.'
He said that at this stage there was little impact on Australia's trade or banks from the European crisis.
'From where we sit, our economy is quite sound and our prospects are very good,' he told an estimates hearing in Canberra.
He believes it is still important to get the budget back to surplus while the scope was there through monetary policy.
Australia's banks were better financed than they were in the run-up to the global financial crisis, Dr Parkinson said.
They could maintain existing lending levels without going into wholesale funding markets should the global financial system clog up.
Dr Parkinson painted a grim picture for Greece, if it left the eurozone.
'Every debt that is denominated euros would jump dramatically, its banking system would collapse,' he warned.
Dr Parkinson said it would also be hard to see how Greek firms would not be 'pushed to the wall'.
'So within Greece, one could see a very, very serious fall out.'
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