Mr Stevens told the House of Representative Standing Committee on Economics today that “there is considerable pent-up demand” for housing in Australia. If you didn’t know who Glenn Stevens was, you would mistakenly think he is yet another Real Estate agent spruiking their bread and butter market.
But Mr Stevens is not a Real Estate agent, but rather Australia’s Chief Banker.
In this address, he stated “Consumers have pulled back discretionary spending sharply, are more inclined to save and are looking to repay debt”. This would come at no surprise given the size of household debt and the lack of household savings.
He focused on China, and made no reference to our largest trading partner, Japan who has just fallen into depression with annual GDP down 12.7%. “There are some tentative indications of a turn for the better in China, in some of the most recent data, although it is too soon to know yet whether that will continue.” He believes Australia will continue from China’s emergence and “there is no reason for any downturn to be a deep one”. Perhaps all we need to do is find a way that global citizens can continue to spend more than the earn, so China can continue to produce goods to service that unsustainable demand.
Overall his assessment was upbeat, maybe too upbeat suggesting a new boom aka expansion. “So there are reasonable grounds at this stage, I think, to believe that the Australian economy will come through this difficult episode not unscathed but well placed to benefit from a renewed expansion.”
» Opening Statement to House of Representatives Standing Committee on Economics – The RBA, 20th February 2009.
» Hansard Transcript – Commonwealth of Australia, House of Representatives, 20th February 2009.
I think certain officials should be obligated to give their assessment while polygraphs gauge the amount of BS they are pushing in any given announcement.
There is no way Glenn believes that rubbish, he is just obligated to say it avoid kick starting our recession.