Profile: Saul Eslake
Profile | 25th March 2009
This weekend, ANZ chief economist Saul Eslake will fly to China with his wife, Linda, for a 10-day trip to Fuzhou, on the country’s south-east coast.There are plenty of work-related reasons why a senior economist would be visiting China but the trip is purely personal: the Eslakes are collecting their adopted son, Jonathan, 20 months, a brother for Caroline, 7, whom they adopted from China in 2004.
Later in the interview, Eslake, 51, muses he would like his biggest achievement to be successfully nurturing two children from China into happy and decent adults. But that’s a question for 15 years’ time.
Now, Eslake is focused on being one of Australia’s best-known economic pundits.
He typically makes 150-200 presentations a year to about 20,000 people and regularly appears in the media to explain his views on financial issues ranging from interest rates to unemployment data.
In a nutshell, Eslake says there’s no doubt the economic outlook has deteriorated over the past three to six months, especially since the collapse of Lehman Brothers and AIG in September and the growing realisation that China is not going to insulate Australia from the global financial crisis.
In fact, Eslake contends that Australia “looks, feels and smells” like it’s in a recession, even if the technical definition of two consecutive quarters of negative economic growth has not yet happened.
He says unemployment will reach at least 7.5 per cent and the economy will shrink this year – but things will not necessarily get as tough as they did in the recessions of the 1980s and 1990s.
“I don’t want to underplay the seriousness but Australia will do ‘less worse’ than almost any other economy,” Eslake says, noting strengths such as our banking system and our stronger housing market.
He gives qualified approval to the Federal Government’s two fiscal stimulus packages, describing their timing and size as “highly appropriate”. But he would have liked the second one to be better targeted on long-term needs such as infrastructure projects.
Eslake clearly loves being an economist but it wasn’t his top passion. As a schoolboy growing up first in Smithton on Tasmania’s north-west coast, then in Hobart, he loved history.
“But I realised you needed to be an exceptionally gifted writer to make any money as an historian,” says Eslake, adding that he chose economics by a process of elimination, discounting law and medicine because of “an irrational fear of self-employment” and eliminating professions that would require him to leave Tasmania.
He ended up on the mainland anyway. Initially he had a type of honours year cadetship that required him to head to Canberra after uni and work in Treasury and then, after working back in Tasmania for 18 months, he realised he “had to choose between living where I wanted to live and earning a decent living and doing challenging work”.
Eslake moved to Melbourne in 1983, working first as an economics adviser to the then Liberal opposition leader Jeff Kennett, then as chief economist at McIntosh Securities and National Mutual (now part of AXA).
In 1995, he became ANZ’s chief economist – on the condition that the bank did not expect him to do it for two years then move into the executive ranks, as his predecessors had. Fourteen years later, he’s still there, in a job he first flagged to himself in 1983 that he would like to do.
“It’s the best job for an economist in Melbourne,” says Eslake, although he would like to return to live and work in Tasmania at some stage “before I’m senile”.
THE BIG QUESTIONS
Biggest break Getting the chief economist job at McIntosh Securities [now part of Merrill Lynch]. It gave me the chance to establish my own identity in this area, a chance to be myself and shape the role in a way that suited my interests.
Biggest achievement Landing this job [at ANZ]. Chief economist at one of the big four banks is kind of the pinnacle of this profession in a sense. And persuading my wife [Linda] to move from New York and Washington to live on the other side of the world.
Biggest regret Not living or working overseas as an adult.
Best investment The house we bought [in Melbourne’s inner east] in October 1995. It will, to a large extent, fund our [eventual] retirement in Tasmania.
Worst investment I remember thinking at the end of 2007 that I should sell our shares and pay down debt but I didn’t do it. [Eslake runs his portfolio through a trust structure and fund manager, so that there is no conflict with his economist role.]
Attitude to money I don’t do my job for the money. If I did, I would have done as my predecessors did and been chief economist for two years then climbed the executive ladder. I see money in terms of what it enables me and my family to do, not as a measuring stick.
Personal philosophy I try to be true to myself and say what I think.