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Early Agenda -

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ASHLEIGH GILLON: Hello and Welcome back to AM Agenda; I'm Ashleigh Gillon in Canberra. Well the
surest bet going around today is that the Reserve Bank will again slash interest rates, this time
analysts predict a cut of half a per cent as the central bank contemplates slowing growth and a
gloomy jobs outlook.

Joining me now from Sydney-our politician's panel, the Liberal frontbencher Scott Morrison and the
Labor backbencher David Bradbury. Good morning to you both.

DAVID BRADBURY: Good morning Ashleigh.

ASHLEIGH GILLON: David firstly to you. Considering the certainty the government says its bank
deposits scheme has given to the banking sector. Does this mean the banks today should pass on any
interest rate cut in full and immediately?

DAVID BRADBURY: Yeah, well thanks Ashleigh. Look our position has been quite straight forward on
this that we would expect that the banks would pass through the full rate of any cuts-and obviously
we're not pre-empting any decision of the Reserve Bank today-but we would expect that the full
value of those cuts would be passed through as soon as possible. Now that's a position that we took
at the last interest rate cut ...


DAVID BRADBURY: ... but significantly-what was most significant was the decisive action that we'd
taken as a government in relation to the bank guarantee which had freed up the inter-bank lending,
and as a result of restoring some certainty to financial markets. We saw that the banks then found
themselves in a position to pass on the full value of those cuts. So we certainly endorse them
passing on the maximum rate of cut as soon as possible.

SCOTT MORRISON: Ashleigh, I think I need to check my hearing because I remember sitting in this
studio a few weeks ago and the government was arguing that banks shouldn't have to pass on the full
rate cuts.

DAVID BRADBURY: That's not true.

SCOTT MORRISON: Now the Coalition has been consistent all the way through that the banks should be
passing through the rate cuts for a very good reason. And that is because that's where the stimulus
has to get to-it has to get to the real economy. And when we were talking about this issue last
time, the government was making the argument that banks somehow needed to take what ended up being
a 20 per cent commission on the rate cut that went through.

So this time now they're saying they're going to push against an open door on this occasion, but
when the argument is there to be had about arguing for rate cuts to be passed on in full, last time
around they weren't on the field. They made no comment along those lines. They're only going to
argue rate cuts when they think the banks are actually going to do it. And I think the mortgage
holders deserve better.

ASHLEIGH GILLON: This morning the Treasurer, Wayne Swan, was on radio putting pressure on the banks
to pass on any rate cut immediately. He also had this comment to make about the Opposition's role
in the governments handling of the global financial downturn. Let's have a listen.

(Clip from ABC Radio National AM Program, 4 November 2008)

WAYNE SWAN: The Opposition is the last thing we think about when we sit down around the cabinet
table and determine what we must do to protect this country and our national interests from the
global financial crisis. They are simply irrelevant to those decisions.

(End of clip)

ASHLEIGH GILLON: David Bradbury, is the Opposition irrelevant as the Treasurer says? This doesn't
seem to be a statement made in the spirit of bipartisanship.


DAVID BRADBURY: Look I think that the point that the Treasurer is very clearly making is that when
the government is considering what is the appropriate action to take when it comes to economic
policy we are very much focused on addressing the key underlying concerns that the economy is
facing and commentary from those on the sidelines is something that will always occur regardless of
what decisions are taken. But our focus is taking the best possible advice-and that's something
we've consistently done-and then acting decisively to try and insure that all of the economic
settings are in place to help us take on the massive challenges that are coming our way.

SCOTT MORRISON: Ashleigh, I think what the ...

ASHLEIGH GILLON: Scott Morrison, what's your reaction to this? Does that sort of comment from the
Treasurer upset you?

SCOTT MORRISON: I think ... No it doesn't upset me, I mean-but I think what it shows is the
government's betrayed its real position on bipartisanship. I mean, what we've said all along
throughout this crisis-and it was Malcolm Turnbull who at the beginning of this year was warning of
the things that come. And we have articles today by Tim Colebatch down in Melbourne who's saying
how Malcolm got these call right, right from the start of the year.

And what we're seeing right now is the need for, I think, for the Coalition to be very much part of
the decision making process and we've put that out there on how many occasions now, where we could
actually be ...

We should have been sitting in that room on the 12th of October. Glenn Stevens should have been
sitting in that room on the 12th of October. The only people who were sitting in that room on the
12th of October were Cabinet ministers, the Treasury Secretary and a bunch of photographers. They
had plenty of time for politics and rolling up their sleeves on the 12th of October, but they had
no time to pick up the phone and talk to the Reserve Bank Governor. They had no time before going
out and making public statements to consult with the Coalition and to get to a position where we
possibly might have been able to go out in a position of stronger support. No, it's Kevin Rudd who
makes the decision ...

DAVID BRADBURY: No, this is part ...

SCOTT MORRISON: He makes the decision and he expects everyone just to fall in line.

DAVID BRADBURY: ... this is part ... What this is is part of the born to rule mentality of the Liberal

SCOTT MORRISON: Kevin Rudd is the one out there who is saying ...

DAVID BRADBURY: They seem to have ...

SCOTT MORRISON: Kevin Rudd is the one out there who is saying...

ASHLEIGH GILLON: Okay, David Bradbury can we get your take on this?

DAVID BRADBURY: Yeah, look this is-as I said-this is the born to rule mentality of the Liberal
Party. What we saw ...


DAVID BRADBURY: ... was a change of government, a change of government that occurred in November last
year. We are confronting ...

SCOTT MORRISON: We didn't elect an Emperor.

DAVID BRADBURY: ... the challenges that are facing our economy and we're taking decisive action. Now
in terms of whether or not the Opposition should have had a seat at the table when key decisions
were being made, you know that frankly ... bipartisanship is something that we hear a lot of talk
about from the Opposition ...

SCOTT MORRISON: From the government-they don't do it.

DAVID BRADBURY: ... but when push comes to shove there's no demonstration of unity on matters of key
significance. What you saw from Malcolm Turnbull-in one of the most irresponsible things that we've
seen in my time observing politics-was when he came forward and called for the sacking of the
Treasury Secretary.

SCOTT MORRISON: Oh, you know that's not true. That is an absolute untruth.

DAVID BRADBURY: (inaudible) economy facing the biggest challenges of a generation.

ASHLEIGH GILLON: Okay, well guys I'm sure that Malcolm Turnbull will have a lot more to say about
the Treasurers comment today. I just wanted to move on to something else. Scott Morrison, you're
the Opposition's housing spokesman. Yesterday there were some pretty grim data released showing the
biggest fall in house prices in 30 years. The Treasurer seems confident that a shortage of housing
combined with the governments boost to the First Home Buyers Grant will help stabilise the market.
Do you agree with him?

SCOTT MORRISON: Well I've being saying now for some weeks that the relative strength of the
Australian housing market verses what's happening in the US and what's happening in Europe is
significantly different.

There is a chronic level of undersupply of housing across Australia and the Treasurer's right and
to the extent that that will underpin-in relative terms-the housing market across Australia. And
the reason we have such a high level of undersupply, and it's particularly true in where we're
sitting today in Sydney, is the land release policies and the infrastructure delivery policies. So
for those of you-for those people who are sitting out there in their homes today-I think we can
take relative comfort over the position of the Australian housing market verses what's happening

That's no reason to be complacent, but the biggest threat-and the banks will tell you this-the
biggest threat to what's happening in the housing sector is what happens to unemployment. Because
when unemployment was at the levels it was when Labor last left office, the rate of mortgages in
arrears was a third higher than it is today. And so that is the thing that really put stress on
mortgages is what people-if people are in their jobs and if the economy is being managed well to
keep people in their jobs. And that's the focus I think we really need now from the government.

ASHLEIGH GILLON: Okay, David Bradbury on another issue, a Reserve Bank Board member and climate
change economist, Warwick McKibbin, today says the government should delay the introduction of its
emissions trading scheme to after the government's planned 2010 date. McKibbin says there's
unlikely to be a new post-Kyoto deal striking Copenhagen at the end of next year because he thinks
the next US president simply won't have all the right people in place to make that happen. Does
that worry you? Do you think this is something that is a view that voters may be increasingly
taking as well?

DAVID BRADBURY: Look I don't think anyone would be surprised by the comments that have been
attributed to Mr McKibbin today. He's been on the record as taking a similar position to that
consistently in the past. But in the same way as we respect the right of the Reserve Bank to make
its decisions independently we also reserve the right as a government to take decisions in relation
to government policy and, you know, the views of Mr McKibbin will be taken into account as will the
views of all serious contributors to the public policy debate on this.

But our position has been very clear, that we are committed to delivering on our election
commitments in relation to the carbon pollution reduction scheme and certainly it remains our
ambition to meet those targets and we will be doing that in the most economically responsible
fashion. And I think that is ultimately what people that I talk to in my community are looking for
from government. They want action to be taken, but they want it to be taken in a responsible

ASHLEIGH GILLON: Okay, we are running out of time. Yesterday though the Prime Minister ...

SCOTT MORRISON: Ashleigh can I please-can I just make a point on that Ashleigh? If I could just on

ASHLEIGH GILLON: Sorry, just very quickly Scott ...

SCOTT MORRISON: If I can just make a point on the ETS. People do expect people to take action, but
they expect them to get it right. And what we're seeing here from the government is an inability to
admit when they get these calls wrong, whether it's on the bank guarantees-and the unlimited bank
guarantees-or now on the ETS. McKibbon has making an excellent point. And the government needs to
take note.

ASHLEIGH GILLON: Okay. I just wanted to quickly move onto one final issue. Yesterday the Prime
Minister confirmed that a conversation he had with George Bush-that it was reported incorrectly. Mr
Rudd said that Mr Bush did not ask him what the G20 is. David Bradbury, the Sydney Morning Herald's
reporting today that a US official has said the White House was upset by that report. Should the
government apologise? And do you think that there should be an inquiry as to how this false report
came about?

DAVID BRADBURY: Yeah. Well look the Prime Minister was very clear in his comments yesterday that
these comments were not made.

ASHLEIGH GILLON: But he wasn't, David Bradbury. Mr Rudd didn't say how this story could have been
leaked and he didn't deny that his office was responsible for it.

DAVID BRADBURY: Well look in terms of how this particular story made its way into the papers,
that's a matter we can speculate on 'til the cows come home.

SCOTT MORRISON: You should inquire into it.

DAVID BRADBURY: But the reality is that we don't know how that occurred. But clearly the underlying
concern-that seems to be what people have expressed as a concern-is that this might in some way
impact on our relationship with the United States. Now if the issue was one of concern with the
long term nature of that relationship with the United States, then frankly I do find it a bit rich
for those on the Opposition to be coming forward making these comments when just a short time
ago-we go back to when John Howard was the Prime Minister, but certainly that position stands-he
said that if Barack Obama were to be elected President that would be a good day for Al-Qaeda. Now,
at no time ...

SCOTT MORRISON: When's Kevin Rudd going to apologise for the statements of Mark Latham?

DAVID BRADBURY: At no time have we had ...

SCOTT MORRISON: When is he going to apologise for Mark Latham?

DAVID BRADBURY: Well, at no time have we had anyone from this government ...

SCOTT MORRISON: Has he apologised for Mark Latham's statements? Reckless I think. And that was a
serving US President.

DAVID BRADBURY: Perhaps Scott would like to take the lead and do something his leader hasn't done ...

SCOTT MORRISON: A serving US President.

DAVID BRADBURY: ... and that is repudiate the comments of John Howard. Do it now on television.

ASHLEIGH GILLON: Okay. We are running out of time. Just-Scott Morrison, you're final take on this?

SCOTT MORRISON: Well I think what it's highlighted here is Kevin Rudd can't admit when he makes a
mistake. I mean the conversation was with George Bush. It got out there somehow. There should be an
inquiry. And he can't have these diversionary tactics talking about former leaders. If he wants to
talk about former leaders we can talk about Mark Latham, but we really want to know...

DAVID BRADBURY: Just repudiate the comments.

SCOTT MORRISON: We really want to know ...

DAVID BRADBURY: Repudiate the comments. That's all you need to do.

SCOTT MORRISON: That was for John Howard. This is about Kevin Rudd who is the Prime Minister now
and who, at the moment, is betraying the confidence potentially about conversations he has with the
United States.

DAVID BRADBURY: Well there's no suggestion, there's is no suggestion that the comments were ...

SCOTT MORRISON: And this is not something we can live with as a country ...

ASHLEIGH GILLON: This won't be the last we hear of this story I'm sure. We have run out of time for
today's AM Agenda. David Bradbury and Scott Morrison, thank you both for your time.

SCOTT MORRISON: Thanks Ashleigh.

DAVID BRADBURY: Thanks Ashleigh.