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Rudd predicts tough economic times ahead -

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Rudd predicts tough economic times ahead

Broadcast: 03/11/2008

Transcript

TONY JONES, PRESENTER: The Prime Minister has described Australia's economic outlook as difficult,
tough and ugly. A batch of new economic figures out today depicts a stalling economy with falls in
housing, retail sales and employment. The numbers only add to expectations of a significant cut in
interest rates tomorrow.

From Canberra, Hayden Cooper reports.

HAYDEN COOPER, REPORTER: When confronting an unruly mob, the well worn political jargon can fall on
deaf ears.

KEVIN RUDD, PRIME MINISTER: An education revolution. What does that mean?

HAYDEN COOPER: The kids at Bulimba State School in Brisbane are years away from experiencing the
latest change, but it will sound familiar to university graduates: a return to compulsory student
services fees.

CHRISTOPHER PYNE, OPPOSITION EDUCATION SPOKESMAN: But if, as we suspect, the money is funnelled
back to the student unions, then we are seeing the reintroduction of compulsory student unionism.

KATE ELLIS, YOUTH MINISTER: Although this will be capped at $250, we are not returning to the hefty
fees of the past, and there'll be a deferred payment plan available to all students.

HAYDEN COOPER: Since the Howard Government scrapped compulsory student unionism, universities have
been crying poor and unions say campus services have suffered. But Kevin Rudd's wary of reigniting
an old argument.

KEVIN RUDD: But this is a contribution which goes to the universities, not to any individual
student union.

HAYDEN COOPER: And what's more, in these times, everything comes back to the nation's bottom line.

KEVIN RUDD: It's gonna be very, very important for our economy in the future for you to have the
best education possible in the world.

HAYDEN COOPER: Anything will help. The Prime Minister saved the bare truth for a different
audience.

KEVIN RUDD: It will be a difficult, tough and ugly period ahead.

HAYDEN COOPER: The economic indicators back him up: house prices fell in September, most
significantly in Brisbane and Canberra; while at the other end of the scale, Hobart and Darwin
bucked the trend.

WAYNE SWAN, TREASURER: Well, these have been very strong markets and there have also been, over
time, very strong increases in prices. But the one thing I do know about the housing sector
generally is that there still is a shortage of housing for many Australians, and we're gonna boost
this sector through the increase in the first home owner grants.

HAYDEN COOPER: Job advertisements are down too by almost 6 per cent, according to the ANZ survey.
And retail spending is heading in the same direction.

CHRIS RICHARDSON, ACCESS ECONOMICS: What's happened in the last six weeks is a game breaker for
Australia's economy.

HAYDEN COOPER: The message from Access Economics is: get used to it.

CHRIS RICHARDSON: Next month's numbers for retail, the October numbers, will be particularly ugly.
Shoppers went on strike in recent weeks, and you can't blame them. They've been fed a diet of
horror headlines about what's happening.

HAYDEN COOPER: The Prime Minister stands ready with the adrenaline shot.

KEVIN RUDD: The Government remains prepared to take whatever action is necessary in the future.

HAYDEN COOPER: And the Reserve Banks is ready to go for the whip; the tip for Melbourne Cup Day is
a half a percentage point cut in official interest rates. And this time more than last, the
commercial banks are under pressure to pass it on.

WAYNE SWAN: As quickly and as rapidly as they possibly can.

JOURNALIST: And in full?

WAYNE SWAN: Well, in full, and if they can't do in full, they better have a pretty good
explanation.

HAYDEN COOPER: The decision will arrive just in time for the race. Last year, he tipped
"efficiently"; this year, he's "zipping".

KEVIN RUDD: Why have I chosen Zipping? Because it's time to zip.

HAYDEN COOPER: Zipping in a mad rush.

Hayden Cooper, Lateline.