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(generated from captions) policies, it's not clear at

this stage. Thank you. For

now, more on the story

presented in some quarters that

the Rudd Government was setting

up onational bank to borrow

billions to lend to the states

to spend on infrastructure,

Opposition Treasury spokesman

Julie Bishop joins us now from

Canberra. Good morning. Good

morning. What do you understand the Government has

in mind? The details are very

sketchy but we do know from the

Prime Minister and the

Treasurer that such a proposal

is under consideration. It is

apparently a proposal by

Premier Nathan Rees of NSW for

the Federal Government to set

up some kind of bank where

funds would be channelled

through this bank to the states

and to ensure that the

infrastructure projects can be

developed. Now, it does have

shades of Whitlam and

chemlarny, I guess, harking

back to the 19 70s when then

Minister Rex Connor decided to

raise loans overseas without

going through Treasury and he

focused on Arab banks and it

was a shady story. It was a bit

before my time in politics but

it has a touch of Whitlam about

it but the details are sketchy.

Our concern is it not be used

as a means to channel money

through to the states to prop up failing State Budgets

because the money would be off balance sheet as far as the

Commonwealth was concerned. It

is a byte a stretch to talk

about a whiff of Whitlam, isn't

it? It was all done in secret

back then and it was a shado go-between, there's no suggestion this is the case

this time round? I'm talking

about the front page of the

papers. The fact is Malcolm

Turnbull raised this issue, it

wasn't raised by the

Government. Malcolm Turnbull

raised the issue and then the Prime Minister and the

Treasurer have had to confirm

that, yes, such a proposal was

under consideration. Now it's

out in the public domain, we

would like to hear details of

what is being proposed, what

role the Premier of NSW is

playing in all of this and how

such a bank would work if the

balances were - well, if the

money were held off balance

sheet, what that would mean for

the Commonwealth bottom line.

Then again t could be all very

straight forward that when a

country faces recession you

need to go into debt and you've got to borrow the money

somewhere so you go to the

financial markets internationally. The idea is

to avoid going into recession.

That's why we are keen to see

the stimulatory package the

Government has introduced will

work through the economy. We're

pleased the Reserve Bank is now

bringing down interest rates.

It's clear that the full impact

of the interest rate rises

earlier in the year is now

being felt by the economy in

terms of the lack of business

and consumer confidence but now

that rates have come down so

rapidly, 3% in the last 4

months, hopefully that will

continue to stimulate the

economy. We still have positive

growth, unlike many other

countries, and we are one of

probably two advance ed economies not forecast to go

into recession. The figures

show we went backwards in the

last two quarters but do you

expect because of the stimulus

package had money will be spent

shortly in the next week or

two, at least people start to

spend the money, do you think

in the next quarter we'll see

an increase in growth? There

is a lag factor involved here.

As I said, we're starting to

see the full impact now of the

Reserve Bank's decision, egged

on by the Government earlier in

the year in their fight against

inflation to push up interest

rates. The full impact of that

is now being felt so obviously

this dramatic easing of

monetary policy in recent

months will take some time to

flow through the economy but

also the fact that the

Government has decided to spend

essentially 1% of GDP in one

hit, that should have a

stimulatory effect. The full

impact of it won't be known for