Henry's cautious optimism justified

Comments on report of “Henry cautiously optimistic on economy”, The Canberra Times, 17/08/2009, http://www.canberratimes.com.au/news/national/national/general/henry-cautiously-optimistic-on-economy/1597731.aspx

Dr Henry's cautious optimism is justified and should be commendable.

Australia has been doing better than all reasonable previous expectations and is still being so, so we do have some causes for optimism.

However, the media and media to longer term world economic outlook is still very much uncertain and there could be a second shockwave coming from international economies as Dr Henry said. We need to prepare ourselves for that possible scenario and be prudent both fiscally and monetarily.

Internally the Australian economy is strong and there are also some encouraging external factors like the rapid recoveries of some economies in Asia. Those will be good for our economy. However, there are also significant uncertain external factors, like the still fragile US economy and how the US and the Chinese economies will adjust to resolve their significant imbalances in savings and consumptions. They can have a big impact on our economy.

Treasury is having a very important task ahead to assist the government in steering the economy to its best possible courses for the future. Dr Henry's statement gives us considerable confidence that they can do it well.