1 00:00:05,160 --> 00:00:07,840 Speaker 1: Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. 2 00:00:07,960 --> 00:00:10,479 Speaker 1: The economy grew by zero point six percent during the 3 00:00:10,520 --> 00:00:13,600 Speaker 1: December quarter, the fastest pace since the end of the pandemic. 4 00:00:13,960 --> 00:00:16,280 Speaker 1: It means the Australian economy expanded by one point three 5 00:00:16,320 --> 00:00:19,520 Speaker 1: percent last year, led by growth in government and household spending. 6 00:00:19,560 --> 00:00:23,040 Speaker 1: Cheryl Murphy is the chief economist at ey Surell. Welcome 7 00:00:23,079 --> 00:00:23,960 Speaker 1: back to Fear and Greed. 8 00:00:24,520 --> 00:00:25,599 Speaker 2: Thank you for having. 9 00:00:26,079 --> 00:00:28,320 Speaker 1: Should we be happy with one point three percent? It's 10 00:00:28,360 --> 00:00:29,200 Speaker 1: still pretty slight. 11 00:00:30,720 --> 00:00:33,520 Speaker 2: Yeah, we shouldn't be that happy. It's a pretty soft number, 12 00:00:33,520 --> 00:00:35,360 Speaker 2: isn't it, Even though it's better of course than the 13 00:00:35,400 --> 00:00:38,520 Speaker 2: September quarter when you think that our capacity might be 14 00:00:38,960 --> 00:00:42,720 Speaker 2: closer to the high twos. One point three is certainly 15 00:00:42,760 --> 00:00:43,440 Speaker 2: not even near that. 16 00:00:44,560 --> 00:00:46,839 Speaker 1: So why did we get the zero point six one 17 00:00:46,840 --> 00:00:49,960 Speaker 1: point three for the year? Tell me what's driving growth 18 00:00:50,200 --> 00:00:52,440 Speaker 1: in the economy and what's detracting. 19 00:00:53,680 --> 00:00:56,520 Speaker 2: So we've had a little bit more strength from the consumer, 20 00:00:56,640 --> 00:00:58,800 Speaker 2: which is really welcome news. So that was up a 21 00:00:58,840 --> 00:01:02,040 Speaker 2: little bit, and that did show actually pick up in 22 00:01:02,080 --> 00:01:06,080 Speaker 2: discretionary consumption as well, so not just the essentials, although 23 00:01:06,120 --> 00:01:08,280 Speaker 2: rent and health were a part of it, but yes, 24 00:01:08,400 --> 00:01:10,920 Speaker 2: a little bit more assigned there, which you would expect 25 00:01:11,120 --> 00:01:14,560 Speaker 2: given we've had the tax cuts obviously in the middle 26 00:01:14,520 --> 00:01:16,720 Speaker 2: of last year. Starting in the middle of last year, 27 00:01:17,040 --> 00:01:19,680 Speaker 2: a bit more support from government, So there's government assistance 28 00:01:19,800 --> 00:01:22,959 Speaker 2: measures helping to kind of pad to a household incomes 29 00:01:23,000 --> 00:01:26,000 Speaker 2: just a little. Real wages are picking up again, that's 30 00:01:26,040 --> 00:01:29,120 Speaker 2: good news for the consumer, and it is possible that 31 00:01:29,280 --> 00:01:32,160 Speaker 2: some consumers were kind of pricing in the possibility of 32 00:01:32,160 --> 00:01:34,839 Speaker 2: a rate cut, which of course we then saw eventually 33 00:01:34,880 --> 00:01:37,920 Speaker 2: in February. So that's been good. The government sector that 34 00:01:38,040 --> 00:01:41,080 Speaker 2: was also a strong contributor to the growth numbers. These 35 00:01:41,520 --> 00:01:44,319 Speaker 2: numbers just keep going up and up. It's quite incredible 36 00:01:44,319 --> 00:01:47,840 Speaker 2: every quarter we see them grow. So both government consumption, 37 00:01:47,920 --> 00:01:51,720 Speaker 2: which is things like public sector wages, the PBS, spending 38 00:01:51,760 --> 00:01:54,320 Speaker 2: on the NDAs, these are going up, as well as 39 00:01:54,360 --> 00:01:59,760 Speaker 2: government investments. So it's like roads, bridges, tunnels, airports, these things. 40 00:02:00,000 --> 00:02:02,440 Speaker 1: Would we be worried about that? Is it government spending 41 00:02:02,440 --> 00:02:03,080 Speaker 1: good or bad? 42 00:02:04,200 --> 00:02:06,280 Speaker 2: It can be both, of course. I mean there's room 43 00:02:06,320 --> 00:02:09,280 Speaker 2: for government spending in the sense it reflects an aging 44 00:02:09,320 --> 00:02:11,680 Speaker 2: population and it reflects the fact that the government is 45 00:02:11,680 --> 00:02:15,240 Speaker 2: giving us more support in the healthcare sector, more pharmaceuticals 46 00:02:15,240 --> 00:02:18,000 Speaker 2: going on the PBS. That's all great, but at the 47 00:02:18,040 --> 00:02:20,920 Speaker 2: same time, of course, it can't just keep going up 48 00:02:20,919 --> 00:02:23,560 Speaker 2: and up without consequence. There are you know, it comes 49 00:02:23,560 --> 00:02:26,360 Speaker 2: with debt at the moment, because most state and federal 50 00:02:26,360 --> 00:02:29,400 Speaker 2: budgets are in a deficit position. And then, of course, 51 00:02:29,520 --> 00:02:32,840 Speaker 2: in a capacity constrained economy, it means that we're getting 52 00:02:32,880 --> 00:02:36,720 Speaker 2: closer to those constraints and that can be inflationary, depending 53 00:02:36,760 --> 00:02:39,120 Speaker 2: of course on the type of spending it is. So 54 00:02:39,639 --> 00:02:43,160 Speaker 2: I would say that it's worrying if it continues to 55 00:02:43,200 --> 00:02:45,600 Speaker 2: go up. You know, we'd much rather see growth from 56 00:02:45,600 --> 00:02:48,840 Speaker 2: the private sector, and that's actually where growth was quite weak. 57 00:02:48,919 --> 00:02:51,760 Speaker 2: Business investment has been hanging around the sort of twelve 58 00:02:51,840 --> 00:02:54,880 Speaker 2: to thirteen percent of GDP for nearly eight years now. 59 00:02:55,160 --> 00:02:57,680 Speaker 2: It's really not going anywhere. Better news though, in the 60 00:02:57,720 --> 00:03:00,720 Speaker 2: exports sector. Exports were up, that's great news, of course, 61 00:03:00,840 --> 00:03:04,560 Speaker 2: and income from exports was also up because commodity prices 62 00:03:04,560 --> 00:03:05,560 Speaker 2: were higher. In the quarter. 63 00:03:06,480 --> 00:03:09,040 Speaker 1: To the national accounts, say anything about productivity, it seems 64 00:03:09,080 --> 00:03:12,120 Speaker 1: to be the topic deju well de is that per day? 65 00:03:12,360 --> 00:03:15,120 Speaker 1: This is topic per year for years. 66 00:03:15,040 --> 00:03:17,760 Speaker 2: Yeah, years, I'd say, yes, it does, and it tells 67 00:03:17,840 --> 00:03:21,440 Speaker 2: us that productivity is pretty woefully back right now. In fact, 68 00:03:21,520 --> 00:03:24,520 Speaker 2: it felt I shouldn't laugh. It's not funny fell again 69 00:03:24,680 --> 00:03:28,200 Speaker 2: in the quarter. And this is a sign of course 70 00:03:28,200 --> 00:03:31,040 Speaker 2: of an economy that's not working as well as it 71 00:03:31,080 --> 00:03:33,480 Speaker 2: could be. And the economy that's not working as well 72 00:03:33,480 --> 00:03:35,480 Speaker 2: as it could be means that the standards of living 73 00:03:35,600 --> 00:03:38,120 Speaker 2: with citizens are not going up, and it can be 74 00:03:38,160 --> 00:03:42,480 Speaker 2: inflationary because essentially we're kind of getting less out of 75 00:03:42,480 --> 00:03:44,880 Speaker 2: every unit of input and so you know, again that 76 00:03:44,960 --> 00:03:48,240 Speaker 2: sort of pushes against those capacity constraints in the economy. 77 00:03:48,840 --> 00:03:51,560 Speaker 2: So all up, that is probably, Yeah, one of the 78 00:03:51,600 --> 00:03:55,040 Speaker 2: more worrying facts that came through in the national accounts. 79 00:03:55,400 --> 00:03:57,720 Speaker 1: What do you think the Reserve Bank will make about 80 00:03:57,880 --> 00:03:58,920 Speaker 1: the figures yesterday? 81 00:04:00,200 --> 00:04:02,000 Speaker 2: Well, we have to put these in context. Of course, 82 00:04:02,040 --> 00:04:04,720 Speaker 2: they're for the December quorder. That's kind of well in 83 00:04:04,760 --> 00:04:07,720 Speaker 2: the past note and we've had the CPI since then. 84 00:04:08,400 --> 00:04:11,840 Speaker 2: So yes, there was sort of some signs of domestic 85 00:04:11,920 --> 00:04:15,240 Speaker 2: prices growing. It's still quite a high rate international prices, 86 00:04:15,240 --> 00:04:17,839 Speaker 2: so the prices we kind of import, they're going down 87 00:04:17,920 --> 00:04:20,719 Speaker 2: those So that was a little better I think though, 88 00:04:20,760 --> 00:04:23,360 Speaker 2: that that productivity number is the one that the Reserve 89 00:04:23,400 --> 00:04:27,360 Speaker 2: Bank will be most interested in. Again showing productivity pulling 90 00:04:27,400 --> 00:04:30,800 Speaker 2: backwards a little bit, and that's not doing anything to 91 00:04:30,920 --> 00:04:33,560 Speaker 2: help the worry that the Reserve Bank holds about the 92 00:04:33,600 --> 00:04:36,160 Speaker 2: tightness of the labor market and how that might translate 93 00:04:36,240 --> 00:04:41,080 Speaker 2: into inflation. Essentially, when you've got productivity falling, the cost 94 00:04:41,320 --> 00:04:44,080 Speaker 2: of labor to businesses is going up. If you can 95 00:04:44,120 --> 00:04:46,680 Speaker 2: sort of think about the fact that you know, businesses 96 00:04:46,760 --> 00:04:50,320 Speaker 2: are paying kind of more to get the same output, 97 00:04:50,760 --> 00:04:53,440 Speaker 2: and so that is inflationary and I think that's where 98 00:04:53,440 --> 00:04:55,919 Speaker 2: the Reserve Bank will be most concerned from these numbers. 99 00:04:56,560 --> 00:04:58,520 Speaker 1: Stay with michaelle I want to talk about how all 100 00:04:58,560 --> 00:05:01,320 Speaker 1: this players out in politic with an election campaign around 101 00:05:01,360 --> 00:05:09,839 Speaker 1: the corner. We'll be back in a minute. I'm talking 102 00:05:09,880 --> 00:05:14,200 Speaker 1: to Cherrell Murphy, chief economist at EY. We talked about 103 00:05:14,200 --> 00:05:16,880 Speaker 1: the national accounts figures, we talked about the Reserve Bank. 104 00:05:17,200 --> 00:05:20,039 Speaker 1: How does it play out politically when you have an 105 00:05:20,080 --> 00:05:23,000 Speaker 1: economy that's slow but improving. 106 00:05:24,760 --> 00:05:28,200 Speaker 2: Well, it's better than being slow and getting worse, isn't it. 107 00:05:28,320 --> 00:05:28,520 Speaker 1: Yeah. 108 00:05:29,279 --> 00:05:33,280 Speaker 2: I think, look, these numbers will be somewhat helpful I 109 00:05:33,279 --> 00:05:36,840 Speaker 2: imagine for the incumbent going into the election. But I 110 00:05:36,880 --> 00:05:41,479 Speaker 2: would also say that in many ways they highlight the 111 00:05:41,560 --> 00:05:44,200 Speaker 2: economy which is not really running quite as well as 112 00:05:44,240 --> 00:05:46,440 Speaker 2: it could be. And by that I mean the slower 113 00:05:46,480 --> 00:05:49,760 Speaker 2: investment numbers, the fact that the government sector is taking 114 00:05:49,839 --> 00:05:52,640 Speaker 2: up a larger part of the economy. These are the 115 00:05:52,680 --> 00:05:56,440 Speaker 2: bigger issues that governments, if they're not already concerned about, 116 00:05:56,480 --> 00:06:00,679 Speaker 2: certainly should be. And we've been talking a lot recently 117 00:06:00,720 --> 00:06:03,800 Speaker 2: about the need for government to really help out the 118 00:06:03,800 --> 00:06:08,080 Speaker 2: private sector to do its best work, so, in other words, 119 00:06:08,080 --> 00:06:11,000 Speaker 2: to help the private sector to pick up as investment numbers. 120 00:06:11,560 --> 00:06:14,400 Speaker 2: There's obviously a number of ways that the private sector 121 00:06:14,440 --> 00:06:17,040 Speaker 2: needs to be helping itself there. But government does play 122 00:06:17,080 --> 00:06:19,719 Speaker 2: a role. It does kind of provide the settings. It 123 00:06:19,760 --> 00:06:24,039 Speaker 2: provides the regulatory environment, the laws, the tax settings, et cetera. 124 00:06:24,520 --> 00:06:27,440 Speaker 2: And we know that these could be better. We know, 125 00:06:27,760 --> 00:06:31,080 Speaker 2: for example, that the tax system could be taking less 126 00:06:31,160 --> 00:06:34,200 Speaker 2: from corporate incomes and taxing more from the sort of 127 00:06:34,240 --> 00:06:37,280 Speaker 2: indirect parts of the economy, because otherwise it's just a 128 00:06:37,360 --> 00:06:41,200 Speaker 2: disincentive for companies and individuals for that matter, to be earning. 129 00:06:41,800 --> 00:06:44,760 Speaker 2: So it does to me highlight that some of the 130 00:06:44,800 --> 00:06:47,280 Speaker 2: settings in the economy are just not as good as 131 00:06:47,320 --> 00:06:49,719 Speaker 2: they should be, and that's where we'd like to see 132 00:06:49,760 --> 00:06:53,039 Speaker 2: the debate in the election go over the coming weeks. 133 00:06:53,520 --> 00:06:55,880 Speaker 1: Okay, now, yesterday you spoke at the National Press Club 134 00:06:55,960 --> 00:07:00,560 Speaker 1: in camera for the Women in Economics Network pre budget address. Nashchelle, 135 00:07:00,680 --> 00:07:03,240 Speaker 1: you have for a long time been very heavily involved 136 00:07:03,240 --> 00:07:05,960 Speaker 1: in the Women in the Economics Network and particularly helping 137 00:07:06,200 --> 00:07:09,920 Speaker 1: younger female economists along the way. A couple of days 138 00:07:09,960 --> 00:07:12,080 Speaker 1: out from International Women's Day, what are the key issues 139 00:07:12,120 --> 00:07:13,160 Speaker 1: that came up yesterday? 140 00:07:14,320 --> 00:07:16,800 Speaker 2: So well, there was three of the three speakers. We 141 00:07:16,880 --> 00:07:20,000 Speaker 2: had Diana Messina as well from AMP and Leona Aris, 142 00:07:20,040 --> 00:07:25,160 Speaker 2: who both spoke about specific gender issues. Actually leonar Orris 143 00:07:25,200 --> 00:07:29,520 Speaker 2: talking about the policy settings which enable, i guess particularly 144 00:07:29,560 --> 00:07:35,080 Speaker 2: strong conditions for pay equity, for workforce equity. She spoke 145 00:07:35,080 --> 00:07:37,840 Speaker 2: a lot about the working from home debate, which of 146 00:07:37,880 --> 00:07:39,720 Speaker 2: course is getting a real head of steam at the 147 00:07:39,720 --> 00:07:43,120 Speaker 2: moment with some of the bigger organizations, particularly in the US, 148 00:07:43,600 --> 00:07:45,840 Speaker 2: sort of saying no more working from home, thanks very much, 149 00:07:46,000 --> 00:07:48,800 Speaker 2: and putting some in Australia. And we all agreed that 150 00:07:48,800 --> 00:07:52,559 Speaker 2: that was just a stupid idea. And then we also 151 00:07:52,680 --> 00:07:55,880 Speaker 2: and Diana spoke a little bout financial literacy and how 152 00:07:56,080 --> 00:08:00,680 Speaker 2: that was particularly poor amongst young females, and so with 153 00:08:00,960 --> 00:08:04,000 Speaker 2: many schoolgirls in the audience, a couple of schools spoke 154 00:08:04,200 --> 00:08:06,440 Speaker 2: very passionately about how we'd like to see some of 155 00:08:06,440 --> 00:08:10,240 Speaker 2: those trends turned around. And there's three women economists trying 156 00:08:10,280 --> 00:08:13,559 Speaker 2: to roll model why my career in economics and indeed 157 00:08:13,640 --> 00:08:16,160 Speaker 2: in many parts of public policy is so important. 158 00:08:16,600 --> 00:08:20,000 Speaker 1: Why don't we have more women in economics even in 159 00:08:20,040 --> 00:08:22,200 Speaker 1: public policy? Now you have some mean, the head of 160 00:08:22,240 --> 00:08:25,400 Speaker 1: Finance is an incredibly impressive woman. She'd be the most 161 00:08:25,440 --> 00:08:27,960 Speaker 1: senior woman in the bureaucro sound Trenk dro. 162 00:08:28,600 --> 00:08:32,360 Speaker 2: Well, we've also got Daniel Wood in the Productivity Commission 163 00:08:32,360 --> 00:08:34,640 Speaker 2: and the Bullock of the Roserk Bank. 164 00:08:35,320 --> 00:08:38,440 Speaker 1: Michelle Bullock. Yeah, good example. Well, actually it's changing my 165 00:08:38,559 --> 00:08:41,880 Speaker 1: question then, because those three individuals are incredibly capable and 166 00:08:41,920 --> 00:08:44,800 Speaker 1: well credentialed. Are we getting to a point where we 167 00:08:44,880 --> 00:08:48,080 Speaker 1: are getting enough women in those sorts of jobs. 168 00:08:49,360 --> 00:08:52,079 Speaker 2: It's definitely getting better at that leadership level. But what 169 00:08:52,160 --> 00:08:54,920 Speaker 2: concerns is is the pipeline, if you like, of economists, 170 00:08:55,360 --> 00:09:00,400 Speaker 2: Because we're seeing that enrollments of students in to economics 171 00:09:00,760 --> 00:09:03,800 Speaker 2: at the sort of high school and university levels, particularly 172 00:09:04,400 --> 00:09:08,640 Speaker 2: of women and those from lower socioeconomic backgrounds. That's where 173 00:09:08,640 --> 00:09:11,760 Speaker 2: we're lacking, and that's exactly what we don't want, because 174 00:09:11,760 --> 00:09:14,480 Speaker 2: we need a variety of voices around the table when 175 00:09:14,480 --> 00:09:17,880 Speaker 2: it comes to economics careers. And when you think about 176 00:09:18,760 --> 00:09:21,679 Speaker 2: people who have economics degrees, they're not all cold economists. 177 00:09:21,720 --> 00:09:25,200 Speaker 2: You know. They turn out to be podcasters, sean and 178 00:09:25,920 --> 00:09:30,839 Speaker 2: heads of government departments and board members and CEOs, and 179 00:09:31,080 --> 00:09:35,440 Speaker 2: they are, you know, very powerful people, very big decision 180 00:09:35,480 --> 00:09:38,480 Speaker 2: makers in our community and in our business world. And 181 00:09:38,559 --> 00:09:40,640 Speaker 2: so what we want to make sure is that we've 182 00:09:40,679 --> 00:09:44,600 Speaker 2: got that pipeline of diverse minds coming in so to 183 00:09:44,720 --> 00:09:48,960 Speaker 2: add a broad range of cognitive skills into the profession 184 00:09:49,440 --> 00:09:52,600 Speaker 2: because it is complicated, there are big problems to be solved, 185 00:09:53,080 --> 00:09:54,839 Speaker 2: and we really want to do what all we can 186 00:09:54,920 --> 00:09:58,080 Speaker 2: to attract particularly girls and also, as I say, those 187 00:09:58,080 --> 00:10:01,760 Speaker 2: from lower socio economic backgrounds into economics. And I personally 188 00:10:01,840 --> 00:10:03,920 Speaker 2: am more than happy to have a coffee with anyone 189 00:10:03,920 --> 00:10:05,560 Speaker 2: who wants to sit down and talk about a career 190 00:10:05,559 --> 00:10:06,280 Speaker 2: in economics. 191 00:10:06,640 --> 00:10:08,520 Speaker 1: Yeah, I mean, you've been fantastic. You've been doing this 192 00:10:08,559 --> 00:10:12,120 Speaker 1: for years and very much promoting women in economics. So 193 00:10:12,160 --> 00:10:13,920 Speaker 1: good on you. Chwell, thank you very much for talking 194 00:10:13,960 --> 00:10:14,640 Speaker 1: to Fear and Greed. 195 00:10:15,320 --> 00:10:16,480 Speaker 2: My pleasure, Sean, thank you. 196 00:10:16,679 --> 00:10:19,400 Speaker 1: I was e y chief economist Chielle Murphy. This is 197 00:10:19,400 --> 00:10:21,880 Speaker 1: the Fear and Greed Business Interview. Join us every morning 198 00:10:21,920 --> 00:10:24,600 Speaker 1: for the full episode of Fear and Greed. Daily business 199 00:10:24,600 --> 00:10:27,280 Speaker 1: news for people who make their own decisions. I'm Sean Elmer. 200 00:10:27,760 --> 00:10:31,600 Speaker 1: Enjoy your day.