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Tuesday, 14 October 2008
Page: 8955


Mr TURNBULL (2:10 PM) —I refer the Prime Minister to his previous answer and ask: what are the revised growth and unemployment estimates for the Australian economy upon which the government relied in formulating this package, and what impact does the government believe the stimulus will have on the Reserve Bank’s ability to continue reducing interest rates?


Mr RUDD (Prime Minister) —Firstly, on the question of growth, the honourable member will be familiar with the forecast which has been put into the budget and released by the Reserve Bank. Obviously, following recent developments in the international economy, we will see a further slowing in growth and a further acceleration of unemployment across the major economies in the world, including Australia. That is why we have taken these measures. We believe it is the right and responsible course of action. Secondly, in response to the honourable member’s question, the Reserve Bank itself determines the future directions of monetary policy. We on this side of the House supported in an unqualified manner the decision taken by the Reserve Bank to reduce rates by 100 basis points in recent days following 10 interest rate rises in a row under the term of the previous government. Future interest rate settings lie with the Reserve Bank. Our responsibility is to make sure that monetary policy and fiscal policy are headed in the right direction and in the same direction. Given the extraordinary events in the international economy coming off the back of a global financial crisis, these are the right policy settings for Australia now, for the economy and for households.