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ABC News Breakfast -

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Interview with Virginia Trioli

ABC2 Breakfast News

3 December 2008

SUBJECTS: Qantas/British Airways, National Accounts, Global Financial Crisis, RBA Rate Cut

TRIOLI:

Wayne Swan, good morning.

TREASURER:

Good morning, Virginia.

TRIOLI:

Now, before we get onto news financial and economic, your response to a potential merger between
Qantas and BA?

TREASURER:

Well, those are matters that will be discussed between the two companies. The Minister [for
Transport] made some comments about this yesterday and our bottom line is that Qantas remains in
majority Australian ownership. The fact that there may be some changes beneath that in terms of the
way in which foreign ownership is regulated is something that is discussed in the Green Paper
presented by the Minister yesterday.

TRIOLI:

Now, moving onto other matters. The National Account figures are being released today. What do you
expect them to show?

TREASURER:

Virginia, I don't speculate about the figures. They'll be out at 11.30 today. But we've made it
very clear in terms of the world outlook that world growth is certainly slowing, probably slowing
substantially, and that certainly will have an impact on the Australian economy, on growth, and on
employment growth in this economy. But we'll see the full extent of that at 11.30 today.

TRIOLI:

Interesting analysis that we've been hearing on our program this morning, Wayne Swan, about the
disconnect now between the American and the Australian markets. We don't necessarily follow them
into their negative territory. Do you see, in your view, that it's possible for Australia to pull
away now from the financial situation that America finds itself in?

TREASURER:

It's certainly the case, and I've been saying this throughout the year, that if you were to be in
any country in these circumstances, the country you would want to be in is of course Australia. But
we are certainly not immune from the fallout of what's occurring not only in the United States -
it's now officially in recession. Europe is in recession. Japan is in recession. The UK is expected
to head there. And of course we now see a substantial slowing of growth in the developing world as
well. So, the world hasn't decoupled. We're all interconnected, and we're not immune from that. But
we have some home grown strengths which serve us well in this environment.

TRIOLI:

So, you're still confident we can avoid a recession?

TREASURER:

I'm certainly confident that the Government is taking every action it possibly can to strengthen
growth. That's why we put our economic security package out there which really begins to flow in
full from next week - the additional payments to pensioners, the additional payments to families,
to carers and so on. All of that has been done and now of course we have the Reserve Bank with a
substantial easing of monetary policy, so we've got fiscal policy and monetary policy working
strongly in tandem. Those two things combined can certainly strengthen our economy in the face of
the global financial crisis and its fallout for this country.

TRIOLI:

Wayne Swan, thanks for joining us this morning.

TREASURER:

Good to be with you.