Dinner with the Governor

On Friday night, November 14, 2008 I was fortunate to be among a small group of Hunter business men and women that enjoyed dinner with Glenn Stevens the Governor of the Reserve Bank of Australia in Newcastle.

Glenn Stevens gave a relaxed, relatively informal address during the evening with the focal point of his speech being, you guessed it, the international financial crisis.

I guess the 3 key points I took away from Governor Stevens’ address were:

¨         The ‘breathtaking turn of events’ throughout September and October demonstrate just how quickly the economic landscape can change.  Almost overnight we went from a RBA policy of raising official interest rates to slow demand and water down inflation, to a position that has seen 3 consecutive reductions in the official cash rate totalling a full 2 percentile points, with a further rate cut widely tipped in December (and probably more cuts in early 2009!).

¨         Confirmation that relative to other developed (and developing) countries around the world, Australia is in good shape, and well positioned to ride through the crisis without too much “collateral” damage.

¨         The RBA have demonstrated they are prepared to move swiftly in response to external factors and that there is still considerable scope for the policy makers to continue to make adjustments in response to the slowing economies of most of our major trading partners.   This, combined with the Federal Governments commitment to stimulating economic activity, gives me every confidence that Australia will avoid a deep and lasting economic downturn.

With all the talk around being of doom and gloom, it’s normal for people to be feeling pretty uneasy about what the short term future holds for us.  But as Governor Stevens has said, “…..about the worst mistake we could make would be to talk ourselves into unnecessary economic weakness”.  If we, the consumers, all stop spending because of the fear of an economic recession, then we will have a self fulfilling prophecy.

I have every confidence that 2009 will be a year of opportunity for Companion Credit Union and our stakeholders.  From a position of financial strength and stability, we are well positioned to capitalise on those opportunities as they present themselves, and to even create a few of our own.

Ray

November 24th, 2008 | 1 Comment »