1
00:00:03,600 --> 00:00:06,120
Speaker 1: Welcome to Ask Fear and Greed, where we answer questions

2
00:00:06,120 --> 00:00:09,800
Speaker 1: about business, investing, economics, politics and more. I'm Adam Lang

3
00:00:09,800 --> 00:00:14,280
Speaker 1: and hello Sean Aylmer. Hello Adam Lang or Sean I reckon.

4
00:00:14,080 --> 00:00:16,480
Speaker 2: This question is right in your sweet spot.

5
00:00:16,960 --> 00:00:21,320
Speaker 1: What's the role of Treasury versus the Reserve Bank?

6
00:00:22,000 --> 00:00:23,560
Speaker 2: And do they ever disagree?

7
00:00:23,960 --> 00:00:28,840
Speaker 3: A disagree? They're like siblings, best of friends, never fight.

8
00:00:30,080 --> 00:00:32,160
Speaker 2: Really ever.

9
00:00:32,360 --> 00:00:34,920
Speaker 3: Well, yeah, I mean, you know my background, I worked

10
00:00:34,920 --> 00:00:37,000
Speaker 3: for the Reserve Bank for a while in my very

11
00:00:37,040 --> 00:00:41,040
Speaker 3: early days, and Treasury are always the other ones, like,

12
00:00:41,240 --> 00:00:43,040
Speaker 3: you know, we kind of like them. But I mean,

13
00:00:43,159 --> 00:00:45,479
Speaker 3: I'm sure as you go up the totem pole in

14
00:00:45,520 --> 00:00:49,120
Speaker 3: those organizations you become friends, and many people have jumped

15
00:00:49,520 --> 00:00:53,199
Speaker 3: from one to the other. But I always thought they

16
00:00:53,240 --> 00:00:55,440
Speaker 3: were the enemy, to be honest. But yeah, maybe that's

17
00:00:55,480 --> 00:00:55,760
Speaker 3: a bit I.

18
00:00:55,720 --> 00:00:57,880
Speaker 2: Don't like Souths versus the roosters.

19
00:00:58,280 --> 00:01:01,480
Speaker 3: Yeah, yeah, yeah, yeah, you know, Carlton Collingwood, like, what's

20
00:01:01,520 --> 00:01:03,720
Speaker 3: that sort of thing? As far as I'm concerned, got it.

21
00:01:04,280 --> 00:01:10,479
Speaker 3: But look, so the roles fairly simply. One looks after

22
00:01:10,520 --> 00:01:13,360
Speaker 3: monetary policy. The Reserve Bank looks after monetary policy, which

23
00:01:13,400 --> 00:01:18,560
Speaker 3: is primarily interest rates. Treasury looks after fiscal policy, which

24
00:01:18,600 --> 00:01:23,520
Speaker 3: is primarily the budget, so that's kind of fair enough.

25
00:01:24,360 --> 00:01:27,640
Speaker 3: There are big differences. So the Reserve Bank is independent

26
00:01:28,360 --> 00:01:32,800
Speaker 3: and by legislation it's independent. Treasury is not. It is

27
00:01:32,840 --> 00:01:37,440
Speaker 3: an arm of government. Now, having said that, I would

28
00:01:37,440 --> 00:01:42,360
Speaker 3: be very very confident that Treasury gives independent advice to

29
00:01:42,560 --> 00:01:44,880
Speaker 3: the government of the day, no matter who the government

30
00:01:45,000 --> 00:01:48,040
Speaker 3: of the day is. So whilst the Reserve Bank is

31
00:01:49,560 --> 00:01:53,920
Speaker 3: legislated as independent, I don't think that actually can take

32
00:01:53,920 --> 00:01:56,880
Speaker 3: away from the fact that Treasury is full of extremely

33
00:01:57,160 --> 00:02:01,440
Speaker 3: capable economists and others that provide I had great advice.

34
00:02:02,520 --> 00:02:05,680
Speaker 3: So we have the spending sign and the taxing side,

35
00:02:05,960 --> 00:02:08,440
Speaker 3: and then the interest rate side. The question much more

36
00:02:08,480 --> 00:02:11,160
Speaker 3: interesting is that, you know, do they ever disagree? So

37
00:02:11,520 --> 00:02:15,400
Speaker 3: for a while I think I just haven't checked this

38
00:02:15,440 --> 00:02:17,480
Speaker 3: for the last couple of years, but certainly for a

39
00:02:17,480 --> 00:02:21,600
Speaker 3: while as an economics reporter at the finn Review, it

40
00:02:21,720 --> 00:02:24,200
Speaker 3: was always a bit challenging to know whether or not

41
00:02:24,240 --> 00:02:29,240
Speaker 3: they agreed or disagreed, because I could get this wrong.

42
00:02:29,639 --> 00:02:33,320
Speaker 3: The Reserve Bank forecasts were like financial year forecasts, and

43
00:02:33,440 --> 00:02:37,799
Speaker 3: Treasury's forecasts were calendar year forecasts. Okay, and it was

44
00:02:37,840 --> 00:02:40,280
Speaker 3: almost like they did that deliberately, so people like me

45
00:02:40,639 --> 00:02:43,240
Speaker 3: couldn't quite work out whether they agreed or.

46
00:02:43,240 --> 00:02:46,280
Speaker 2: Not Imperial and metric systems at the same time.

47
00:02:46,600 --> 00:02:49,520
Speaker 3: Sort of, yeah, he kind of. And I mean, you know,

48
00:02:49,600 --> 00:02:53,280
Speaker 3: as I'm always saying to Michael when he's not on holidays,

49
00:02:53,560 --> 00:02:56,560
Speaker 3: things like the trend is your friend. He drives him mad.

50
00:02:56,600 --> 00:02:58,560
Speaker 3: But the trend is your friend, Adam. You know that

51
00:02:58,760 --> 00:03:02,200
Speaker 3: it's economist yourself, and so you could always sort of

52
00:03:02,240 --> 00:03:04,960
Speaker 3: see the trend and sometimes you would. You know, they

53
00:03:05,040 --> 00:03:10,120
Speaker 3: would disagree on parts of the economy, bits and pieces

54
00:03:10,160 --> 00:03:13,639
Speaker 3: of it, but broadly they are in agreement, now is them.

55
00:03:13,800 --> 00:03:16,440
Speaker 3: Remember the head of Treasury sits on the Reserve Bank

56
00:03:16,440 --> 00:03:19,880
Speaker 3: board as well, so you know, it's not as if

57
00:03:19,880 --> 00:03:22,960
Speaker 3: they're not clued into what they're doing. And I think

58
00:03:23,560 --> 00:03:28,200
Speaker 3: over time some of the country's best economists have come

59
00:03:28,240 --> 00:03:33,760
Speaker 3: out of well, academia, Reserve Bank, Treasury, They're kind of

60
00:03:33,800 --> 00:03:37,960
Speaker 3: the big three places for economists to come out of.

61
00:03:38,560 --> 00:03:42,800
Speaker 3: So I'd love to say they disagree. I'd love to

62
00:03:42,840 --> 00:03:46,680
Speaker 3: say they really dislike each other. I don't think that's

63
00:03:47,200 --> 00:03:51,760
Speaker 3: the case. So I mean, the woman Jenny Wilkinson who

64
00:03:51,800 --> 00:03:55,880
Speaker 3: is coming to run Treasury after Stephen Kennedy leaves. She

65
00:03:56,000 --> 00:03:58,400
Speaker 3: actually started at the Reserve Bank, and I knew her

66
00:03:58,520 --> 00:04:02,760
Speaker 3: from my Reserve Bank day. So she's done the Reserve Bank.

67
00:04:02,840 --> 00:04:06,600
Speaker 3: She's in finance, now running finance and going to Treasury.

68
00:04:06,960 --> 00:04:10,120
Speaker 3: David Gruin has a Reserve bank guy, he went on

69
00:04:10,320 --> 00:04:12,240
Speaker 3: to I'm not sure there was in treasure, but he

70
00:04:12,280 --> 00:04:15,200
Speaker 3: now runs the Austrain Bureau of Statistics. I think there

71
00:04:15,200 --> 00:04:18,240
Speaker 3: are a lot of really capable people who often have

72
00:04:18,440 --> 00:04:23,599
Speaker 3: time in Reserve Bank or treasury before doing other great things.

73
00:04:24,240 --> 00:04:26,600
Speaker 3: The rest of us, like me who worked at the

74
00:04:26,600 --> 00:04:28,960
Speaker 3: Reserve Bank, it wasn't actually a very good economist at all.

75
00:04:29,680 --> 00:04:31,720
Speaker 3: We end up we end up doing podcasts.

76
00:04:33,520 --> 00:04:36,839
Speaker 1: So Sean, I can imagine whether they agree or disagree, right,

77
00:04:37,440 --> 00:04:41,320
Speaker 1: the high power intellects involved on both sides, and probably

78
00:04:41,440 --> 00:04:44,279
Speaker 1: some passion because of having done so much research into

79
00:04:44,560 --> 00:04:47,440
Speaker 1: their material. They would be willing to advocate a view.

80
00:04:48,040 --> 00:04:51,120
Speaker 1: But even when they disagree, I would imagine it's incredibly

81
00:04:51,240 --> 00:04:55,839
Speaker 1: respectful and very intelligent. Is am I picking that right?

82
00:04:57,279 --> 00:04:58,400
Speaker 3: I don't know about that.

83
00:04:59,279 --> 00:05:00,359
Speaker 2: Does it get being uncle?

84
00:05:00,760 --> 00:05:04,120
Speaker 3: Yeah? I think you're sort of three quarters of the

85
00:05:04,120 --> 00:05:06,760
Speaker 3: way the part. I actually think they would disagree, because

86
00:05:07,040 --> 00:05:09,680
Speaker 3: a lot of these people are very confident of their

87
00:05:09,680 --> 00:05:13,960
Speaker 3: intellect with good reason, with good reason. But if they disagree,

88
00:05:15,000 --> 00:05:17,400
Speaker 3: I'm sure they'd love to have an intellectual argument with

89
00:05:17,480 --> 00:05:24,640
Speaker 3: each other about it and really rip in. I don't think, no,

90
00:05:24,760 --> 00:05:27,360
Speaker 3: I'm totally wrong Bernie Fraser. Of course, Bernie Fraser was

91
00:05:27,400 --> 00:05:31,560
Speaker 3: head of Treasury and head of the Reserve Bank. But

92
00:05:31,680 --> 00:05:35,719
Speaker 3: I don't think there's ever been anyone else who has

93
00:05:35,760 --> 00:05:40,000
Speaker 3: had both those two jobs. But I would imagine there'd

94
00:05:40,000 --> 00:05:45,200
Speaker 3: be robust, robust discussion if they agree disagree with something.

95
00:05:45,640 --> 00:05:48,799
Speaker 1: That's excellent. Maybe we could have our own hosting, Sean.

96
00:05:48,800 --> 00:05:50,719
Speaker 1: We could do an event, be very.

97
00:05:51,560 --> 00:05:54,320
Speaker 3: We could years. We could do you know, Colin woodv.

98
00:05:54,440 --> 00:05:59,320
Speaker 3: Carlton or South Roosters, but would have Jenny Wilkinson versus

99
00:05:59,320 --> 00:05:59,960
Speaker 3: Michelle Bullock.

100
00:06:00,200 --> 00:06:03,640
Speaker 2: I like it brilliant. All right, thank you very much, Sean.

101
00:06:04,240 --> 00:06:05,680
Speaker 3: Do we answer the question do you reckon?

102
00:06:06,000 --> 00:06:08,159
Speaker 2: I think we did with a little bit of extra color.

103
00:06:08,360 --> 00:06:10,360
Speaker 3: Yeah, excellent. Thanks Adam.

104
00:06:10,640 --> 00:06:12,480
Speaker 1: If you have your own question for Fear and Greed,

105
00:06:12,560 --> 00:06:15,599
Speaker 1: jump onto the website Fearangreed dot com dot au or

106
00:06:15,680 --> 00:06:18,360
Speaker 1: send it through on any of the social media platforms.

107
00:06:18,640 --> 00:06:21,119
Speaker 2: I'm Adam Lang, And this is ask fear and greed,