Australian Economy Uncertain But Resilient Says Treasurer Chris Bowen

Treasurer Chris Bowen warns of an uncertain economic outlook in Australia and says the situation requires careful management.

A week after former Prime Minister Julia Gillard declared the Australian economy is "growing, stable and strong," MR Bowen said that commodity prices and mining investments are on a decline. On Monday, Ms Gillard told the Committee for the Economic Development of Australia that the economy is strong.

On his first full press conference as treasurer under Kevin Rudd's government, Mr Bowen said the demand for resources is slowing down because of China's ongoing economic transformation. Australia has seen iron ore prices fall by 15 per cent, while gold prices continue to decline at 21 per cent.

Mr Bowen said Australia is experiencing the effects of a slow mining industry as the economy is moving towards the production phase. Managing the transition will require careful management in the coming months, according to Mr Bowen.

The Reserve Bank of Australia (RBA) is standing by to cut interest rates if the need arises. Mr Bowen said the Reserve Bank has still room to move in the coming months to boost the economy when the time comes. The bank has the capacity to implement further changes if the economy needs more support due to an unstable global economy.

The RBA has left its cuts on cash rates on hold for the second consecutive month. When asked if Mr Bowen is reframing the Australian Labor party's economic message, he said that the Australian economy is resilient, but a transition needs proper management.

Mr Bowen said PM Rudd's government has the necessary skills and experience to provide sound economic management. The Opposition, headed by Tony Abbott, may have a different approach.

Managing the economic transition is what Labor governments do. Mr Bowen recalled how the Hawke and Keating governments did this in the 1980s and 1990s. Managing large transitions during the global financial crisis became successful than any other economy under Mr Rudd's first term as prime minister.