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Sky News Hour -

View in ParlView

Press Conference

Parliament House

Canberra

5 November 2008

SUBJECTS: MYEFO; RBA Interest Rate Decision

TREASURER:

Thanks for coming along today for the release of MYEFO. This is one of the most important economic
updates of recent years, given the current global conditions. So, I hope you'll be a bit patient as
I take the time to go through all this. There's plenty of time and I'll be around for the rest of
the day. And of course, as you know, we're making Treasury officials available to brief you.

Now, the first point that I want to make is that there's no point in trying to sugar coat these
figure.

The global financial crisis has smashed a $40 billion hole in the Budget. And of course, if
international conditions were to deteriorate further, then there could be more to come.

The numbers I'm releasing today show the Budget has felt the full force of the global financial
crisis. And this is yet another dramatic reminder that we are not immune from the impact of the
global financial crisis.

I do want to say just a few things first about the global financial crisis. I think, as we are all
aware, this is the biggest global upheaval since the Great Depression.

At the time of the Budget the Government was acutely aware of the risk posed by global turmoil,
including that the situation could get worse. That's why at Budget time, we spoke of the need to
build a strong surplus to act as a buffer against global turmoil. I'm glad to say that with that
foresight, we have the capacity to deal with this situation, even as it has changed so dramatically
over the past few months. We are well placed to deal with it.

As I said when I returned from the United States, the global financial crisis took a particularly
nasty turn around the time that Lehman Brothers fell over on the 15th September. And following that
time borrowing costs soared, credit markets froze and of course stock markets around the world
suffered some very significant losses, as you can see in that chart there. The blue is, of course,
Australia. The red is, of course, the United States.

In Australia, the ASX200 fell from above 5,000 points to around 4,000 points from mid-September to
mid-October. That is, it lost a fifth of its value in the space of one month. And of course, that
has caused significant losses for a lot of people. And of course, during this period and prior to
then, something like 30 banks around the world have failed or been bailed out. And of course, all
members of the G7 group of advanced economies have now experienced negative growth at some point
this year. So, all of this is having a dramatic impact on global growth.

When all of this intensified in September, the downturn was of course going to become deeper and
more widespread. The world's major advanced economies are now expected to grow at their lowest rate
in more than 25 years. And of course, these global difficulties do impact here. Economic and
employment growth will slow, and we've been upfront about that from the very beginning.

Growth is expected to slow to 2 per cent in 2008/09 - ╛ of a per cent point lower than forecast at
the time of the Budget. This is slower growth, but it is solid growth, given the international
circumstances.

And if you just have a look at the global growth comparisons there. Have a look at the United
States - zero growth in 09. In the G7 - down to about ╝ per cent in 09. So, we are doing pretty
well compared to the rest of the world, but there are some dramatic movements going on. And of
course the UK is definitely and most assuredly in recession.

And of course, weaker global growth has seen sharp falls in global commodity prices, and our terms
of trade are now forecast to decline from their recent peaks. You can see that in the graph there.

Nominal GDP growth, which has been running at around 8 per cent over recent years, is forecast to
slow to just 3 per cent in 2009/10.

So, all that weaker global growth impacts particularly domestically here on employment. And of
course, the employment numbers in MYEFO do show that there will be pain in the community.

At Budget time we forecast that unemployment would rise to 4╛ per cent by mid?2009. The changing
global conditions has meant that forecast has been revised up to 5 per cent in June 2009 and 5╛ per
cent for June 2010.

That brings me to the fiscal forecast. Despite the impact of the global financial crisis, we
continue to budget for surpluses. An underlying cash surplus of $5.4 billion, or 0.4 per cent of
GDP, is forecast for 2008/09.

Now, this is important to note because all of those other countries that we looked at before are
facing recession and budget deficits. It's important to note that Australia is still forecasting
modest growth and modest surpluses. You can see that in the comparison there most dramatically -
only two countries with modest growth and modest surpluses - Australia and Canada.

Now, the impact of the global financial crisis is going to have a very serious impact on revenue.
Of course, that impact on revenue does impact on the size of future surpluses, particularly from
2009/2010. The fact that we are still budgeting for surpluses owes a lot to the hard yards that the
Government did in the last Budget, particularly the savings we made in that Budget to bolster our
surplus while still delivering tax cuts in the years ahead.

Now, almost all of the decrease in the surplus beyond 2008/09 is due to massive reductions in
revenue associated with the global financial crisis.

Other policy decisions have relatively little impact. It's all due to a very big change in revenue
caused by the global financial crisis. And that's what this chart takes us through. This chart
firstly shows our surpluses, the surpluses we built at the Budget to buffer against global turmoil.

Now, since that time we've produced an Economic Security Strategy, and you can see its impact on
2008/09 and 2009/10. Now, we've put that Economic Security Strategy in for 2008/09 to bolster
growth to avoid the impact of what is coming down the track from international circumstances.

Now beyond that, there have been some inevitable policy decisions that must be taken, and they have
impacted to a relatively small amount on future surpluses. What I'm dealing with here is drought
assistance, some decisions that have been taken for the PBS drug listings. These sorts of things
are normal policy decisions that occur between budgets.

But what has been absolutely dramatic in driving the surpluses down has been the changes to
revenue. The global financial crisis has smashed $40 billion out of projected surpluses. It's hit
$40 billion worth of potential tax revenue. And that is what you can see in the graph.

I'll just take you through the individual components of that.

Tax receipts have been revised down by $4.9 billion in 2008/09, $12.2 billion in 2009/10, 12.4
billion in 2010/11 and $7.9 billion in 2011/12. These are all a direct consequence of what's
occurred in global equity markets and the impact of that on capital gains tax, the impacts of
credit market turmoil, weaker global growth and the falling terms of trade.

You can see it there pretty clearly in this graph that almost all of that fall is accounted for by
falls in capital gains tax and company tax, and all of that is a consequence of what's going on
internationally.

So, that's the backdrop to the figures that have been provided in MYEFO today, but it also puts
into context why the Government moved so swiftly and so decisively with our Economic Security
package some weeks ago. We did that to get ahead of the game. We did that because we knew what was
occurring internationally was dramatic, and we did that because we knew we had to bolster growth
immediately, which is what the Government has set out to do.

And of course, as you are aware, we now have fiscal policy on the one hand with monetary policy on
the other, working in tandem to boost and to strengthen our economy.

Our central objective is to protect working families as much as we possibly can from the impact of
the global financial crisis, hence the $10.4 billion Economic Security package to strengthen the
economy and to protect households.

The surplus was put there for the good times and, of course, it's there to be used when times get
tough, and tough times have arrived. Today's figures make it pretty clear that the economy was
crying out for the boost that the Government delivered, now backed up by an easing of monetary
policy from the Reserve Bank. Had we not acted decisively, economic growth would have been much
weaker than currently forecast with all of the flow-on impacts on employment.

The strategy is expected to result in a boost to the level of real GDP of between half and one
percentage point. It will help to create up to 75,000 additional jobs over the coming year.

I think all of these numbers show that our strategy was delivered at the right time to the right
people with the right amount of stimulus for the economy. It's targeted at those parts of the
economy that need it most. And as I said before, it does now mean that fiscal policy and monetary
policy are working in tandem to strengthen the economy given what is occurring internationally.

So, the figures I've released today show that our Budget is feeling the full force of the global
financial crisis. They are a dramatic reminder that our Budget and the country is not immune from
global turmoil and financial market turmoil.

But the point I would make, and I've made time and time again, as a country we are better placed to
withstand the fallout than just about any other country in the world. We do have a strong financial
system. We have four of the world's strongest banks. We are located in a region which is still
growing, albeit more slowly than people had anticipated. We did the hard yards in the Budget to
produce a strong surplus which is now standing us in good stead, given the turn that international
events have taken.

I just want to emphasise that the Government is prepared to take the tough decisions, the tough
decisions necessary to protect our economy in these uncertain times. And we have to be very clear -
Australia did not cause this global financial crisis, but we're prepared for it and we're dealing
with it probably better than most other advanced countries in the world.

Over to you.

JOURNALIST:

You said at the start in your opening comments that (inaudible) given inflation projections,
doesn't that suggest the economy will at least not be growing in a couple of years' time
(inaudible) actual real growth. Also, what does this slashing of surpluses mean for the
Government's infrastructure and aspirational tax cuts?

TREASURER:

All of our forecasts are there for you to digest, Laura.

JOURNALIST:

(inaudible)

TREASURER:

The statement is coming out and you're going to get a briefing from Treasury, and I'm happy to make
myself available. This is a statement that is delivered at a normal time, six months from the
previous Budget within a few days, and you're welcome to go through everything in great detail.
Now, so can we...

JOURNALIST:

So, if you could just answer the question about the nominal GDP numbers, and also about what's
happened...

TREASURER:

Well, they're dramatically impacted upon by the terms of trade estimates, Laura, as we know. And as
you saw from the graph up there, whilst they're down, they're still at a slightly higher level than
they would on average have been. The forecasts that we've put out there indicate that we believe
growth will remain positive. But we're not immune from more dramatic impacts that could occur, and
that will have flow on effects in terms of the surplus and growth into the future. Your second
question was?

JOURNALIST:

What's the impact on infrastructure spending proposals and aspirational tax cuts from the fact that
you don't really have (inaudible)?

TREASURER:

There are tough decisions to be made, Laura. The global crisis has impacted dramatically on the
Budget, as I said before, but we are running modest surpluses, and that's a good thing. Should
things turn adverse internationally in a more dramatic way, that will have flow-on effects for
surpluses.

But in terms of the choices that we make about future policy direction, I'll make a couple of
points. Firstly, we are committed to pension reform. We've made that clear. But as regards what we
can do, whether it comes to infrastructure, whether it comes to reform of federal-state relations
or a whole host of other areas, there are tough decisions that must be taken.

JOURNALIST:

Are you forecasting positive real growth in each quarter?

TREASURER:

We are forecasting positive real growth and...

JOURNALIST:

In each quarter?

TREASURER:

We are forecasting positive growth. We are forecasting positive growth.

JOURNALIST:

Yes, yes, but my question is, are you forecasting it in each quarter.

TREASURER:

We are forecasting positive growth.

JOURNALIST:

You've given us a yearly figure, though, for GDP growth. You haven't given us a quarter-by-quarter
figure. Are we to take it that if we see the quarter-by-quarter figures in MYEFO they will roughly
around 2 per cent or do we expect that some quarters will dip far lower towards negative growth?

TREASURER:

We have done what we normally do. We have forecast our growth of 2 per cent. We expect growth to be
positive, okay? We expect growth to be positive.

JOURNALIST:

In each quarter?

TREASURER:

That is our forecast, and we have forecast this as we normally forecast these matters. 2 per cent
positive growth. I can't be any clearer than that.

JOURNALIST:

Treasurer, with the Budget surplus (inaudible) smaller and growth being lower, if not for the
economic stimulus package and what is its actual impact on growth and surpluses?

TREASURER:

As I said in my remarks, between half and 1 per cent. It's a 1 per cent stimulus.

JOURNALIST:

But the impact on the surplus as well.

TREASURER:

Impact on the surplus? I couldn't give you the estimate of the impact directly on the surplus, but
what I can tell you is that its impact will be between a half and 1 per cent, and the jobs impact I
referred to before.

JOURNALIST:

What is the outlook on inflation (inaudible)?

TREASURER:

Sure, I'll just pull out the inflation brief... CPI - three and a quarter in the Budget, three and a
half MYEFO.

JOURNALIST:

In the outer years?

TREASURER:

I'm just looking for those. I'll come to that in a sec. Go to the next one and I'll give it to you.

JOURNALIST:

Mr Swan, do you foresee the possibility of further stimulatory measures to be announced this year?
And secondly, on the infrastructure you seem to be sending out (inaudible) conflicting messages. On
the one hand it's saying that this is one way of (inaudible) and encouraging speculation about it.
On the other hand from what you just said, you seemed to put it into a different category than
pensions, suggesting that you might have to revise down (inaudible)?

TREASURER:

We've made it very clear that we'll be delivering on pension reform, Michelle.

JOURNALIST:

I'm talking about infrastructure.

TREASURER:

Yes, well as I said, we've got to take some tough choices between all of those other areas that are
before us. There is the COAG agenda - that will be tough. There is a variety of other reports
before the Government and of course there is infrastructure expenditure as well. We've made it
pretty clear that...

JOURNALIST:

(inaudible) scale back?

TREASURER:

I'm not going to forecast what we're doing in each individual case. But of course the size of the
surpluses does impact on our capacity to deliver on a range of areas that we are ambitious for
reform in. But we are delivering on pension reform. We are very keen on bringing forward
expenditure when it comes to infrastructure. We do have the funds, as you are aware, in our
infrastructure funds. We've got a process in place to deal with that, and we intend to bring
forward as much as we possibly can to boost and strengthen the economy.

Now, just on inflation, I just picked up my sheet. In terms of MYEFO, 08/09: 3.5. 09/10: 3.

JOURNALIST:

Any other measures before Christmas?

TREASURER:

I don't rule other measures in or out. The Prime Minister has already indicated that we will be
doing more when it comes to infrastructure and has set a timetable before Christmas for that.

JOURNALIST:

Mr Swan, when you talk about the COAG agenda, I think there's a health agreement coming up.

TREASURER:

They're all on the table.

JOURNALIST:

The big ones of health and education (inaudible).

TREASURER:

All the agreements, Clinton, are up for negotiation. We've just had a massive reform of Specific
Purpose Grants and we've collapsed them down to five or six. Health is a big one, education is
another, indigenous affairs is another, there's quite a few of them, and they are all up for
negotiation at the COAG meeting that's occurring later this year.

JOURNALIST:

Why have you chosen today to release your information on MYEFO when the media's completely awash
with the US elections?

TREASURER:

A very simple reason. I said, and the Government said, we would release it within a month of the
Economic Security Strategy. I'm heading overseas tomorrow. If we had released it on Monday before
Melbourne Cup day, that might have been a bit of a problem. If we had released it on Melbourne Cup
day, that would have been a problem. So, it was released today as I'm flying out tomorrow - the
last possible date I can leave the country to attend the G20.

JOURNALIST:

Treasurer, on those funding deals, the Government said that they would (inaudible) pay extra to the
States to achieve all your specific reforms. If you haven't got the money to pay them extra, do you
therefore have to kind of wind back on your ambition of what you want to achieve with federalism?

TREASURER:

We've said that there are tough decisions to be taken. There will be an impact across a range of
areas because of these circumstances. What we will do is that we will take the responsible course
of action. We've committed to pension reform. But when it comes to a range of other areas which
include COAG and many others that the Government is ambitious about, we will have to take some
tough decisions and make some choices. It's really that simple.

JOURNALIST:

Mr Swan, further to Michelle's question, which is more important: the political imperative to keep
the Budget in surplus, or risking going into deficit to provide infrastructure that might actually
help stimulate the economy?

TREASURER:

What is absolutely most important is to strengthen our economy, and to do everything that we
possibly can to strengthen our economy in the face of these global economic conditions. What we've
said is that our policy is to have a surplus on average over the cycle. That is certainly our
intention. But if global conditions were to worsen, it would have impacts on the Budget. It would
have impacts on employment. But what we are absolutely determined to do is everything that we can
do responsibly to strengthen our economy in the conditions in which we find ourselves.

JOURNALIST:

So, you are prepared to go into deficit if necessary?

TREASURER:

No what I'm saying is that our policy is...

JOURNALIST:

(inaudible)

TREASURER:

That's not what I said. What I said is, to keep the Budget in surplus on average over the cycle. We
have modest surpluses - the only country in the world with them - but in the circumstances we are
in, if conditions were to turn more adversely than they have, that may have an impact on the size
of those surpluses that...

JOURNALIST:

Will it push them into deficit?

TREASURER:

Well, I'm not going to speculate about things that haven't happened yet, Peter. But what I can do
is forecast for the future - that's what MYEFO's about - and the Government expects to be in
surplus. That is our objective and it remains our objective.

JOURNALIST:

Mr Swan, how would you describe the risks of these forecasts?

TREASURER:

The risk here, David, is on the downside, as you're aware. But having said that, coordinated global
action is occurring. You've seen action in terms of monetary policy around the world in recent
months. You've also seen other governments around the world move to stimulate their economy. Both
those things, I think, also hold out the prospect of stabilising conditions internationally.

JOURNALIST:

Mr Swan, could you just clarify (inaudible) guarantee that the infrastructure funds will be fully
funded (inaudible)?

TREASURER:

No, well there's $26 billion allocated to the infrastructure funds, and they were to be added to
from future surpluses. We will add to those funds as circumstances permit, but there are monies
available for the infrastructure funds right now.

JOURNALIST:

But you said and the Prime Minister has previously talked about the $76 billion nation building
agenda (inaudible)?

TREASURER:

Well, that adds in other transportation projects as you're aware, Laura, and we're looking at all
of those as well.

JOURNALIST:

Treasurer, $41 billion, the point of the question (inaudible) $41 billion which is now turning into
$26 billion with possibility of...

TREASURER:

And what I've just said is that we will add to those funds as circumstances permit.

JOURNALIST:

Treasurer, you mentioned the easing of monetary policy. The Commonwealth [Bank] not passing on the
full rate cut yesterday, how important is it now for other banks to (inaudible)?

TREASURER:

Well, I'm certainly disappointed the Commonwealth Bank - and I'm sure their customers are
disappointed - they didn't pass on the full amount. There has been cuts in the official rate of 200
basis points in the last couple of months, and all of those have been passed on prior to this
latest 75 basis point cut. I would hope that all banks think of their customers and pass on this
latest cut in full. I'm sure customers are disappointed the Commonwealth Bank has chosen not to do
that.

JOURNALIST:

Treasurer, (inaudible) just to clarify this. When you say 'over the cycle', what do you mean?
(inaudible)

TREASURER:

I'm saying on average over the cycle. That's what I'm saying. That's...

JOURNALIST:

Well, you're not denying, then, that you could go into deficit in a (inaudible)?

TREASURER:

We're not forecasting going into deficit in any single year. But I've made it very clear, if
international conditions were to further deteriorate, that would have an impact on future
surpluses. But it's not my job to speculate about that. My job is to put out these forecasts, which
are the work of Treasury, which project positive growth and modest surpluses for the future.

JOURNALIST:

On infrastructure (inaudible), the global financial crisis is surely going to have an impact on the
ability of the private sector to come up with funding for (inaudible)?

TREASURER:

Well, we'll do what we can responsibly do. There are a variety of knock-on effects of what's
occurred from the global financial crisis. It is the case that it is also impacting upon the
capacity of the private sector to proceed with projects. We still have a fair bit of investment, as
you'd be aware Tim, in the pipeline, but it certainly does impact on some future investment
intentions of some companies.

JOURNALIST:

Treasurer, you said that it's going to require some tough decisions in the next couple of years. Is
the ETS in 2010 a protected species, or could it be one of those tough decisions?

TREASURER:

No, our intention is to commence the ETS in 2010. That's why we've proceeded with the modelling
which we've published. It's all about strengthening our economy as well. It's an important measure,
and it's our intention to proceed in 2010.

JOURNALIST:

So, do the tough decisions include looking at other spending that might be reallocated due to the
new circumstances?

TREASURER:

Look, we've got to go back and have a look at everything. But we have implemented all of our
election commitments in the context of the last Budget. We do have ambitious plans across a range
of areas. We are going to have to cut our cloth to suit the circumstances. I've made it clear that
the commitment to pension reform is one that we are proceeding with within the timetable that we
indicated we were following, and that remains the case. But there are a large number of other
areas, which we are ambitious to proceed in, in which we will have to take tough decisions and make
tough choices.

JOURNALIST:

Is the national broadband plan one of them, your $4.7 billion plan with an equal amount from the
private sector if they can find it. Is that one of them on the table now?

TREASURER:

I'm not going to go through the full list one by one, Peter, and rule them in and out. These are
decisions that the Government takes as part of its normal budgetary process. The Government is
going through that process now. This is the time of year that preparations for next year's Budget
commence. The Strategic Budget Committee of Cabinet has been working overtime anyway, and we are
going through all of the normal processes.

JOURNALIST:

(inaudible) is the only protected area. Is that what you're saying (inaudible)?

TREASURER:

What I'm saying is, one, we've kept all of our election commitments that we took to the people at
the last election. Since that time we have committed to a process of pension reform, and that
remains the case. Thirdly, there will be a range of policy areas where we will have to take tough
decisions about priorities. The Government is in the process of doing that.

JOURNALIST:

Mr Swan, have you inherited what the Americans might politely call a mud sandwich?

TREASURER:

I don't see it like that. The most important thing that is at the forefront of my mind when I look
at the conditions we are in, is protecting the national interest. And the Government is absolutely
determined, as I've said in my remarks earlier, to do everything we can to strengthen the economy
and to deal with the circumstances in which this country now finds itself.

JOURNALIST:

Mr Swan, in terms of you nominating pensions today as the protected species (inaudible), we know
you're committed to pension reform and have been throughout your political career, but are you
reflecting to us today your aspiration or the Government's (inaudible)?

TREASURER:

Well, the Government is already on the record about pension reform and the timetable for it. I've
just indicated my view that that will proceed within that timetable.

JOURNALIST:

Mr Swan, yesterday ACCI called upon the Government to bring forward the tax reform (inaudible) and
to bring forward tax cuts. How do you respond to that in the light of these figures today?

TREASURER:

Well, I would respond to that by saying first of all, there are already tax cuts in the system -
income tax cuts worth $7 billion this financial year that we've just put into the system. On top of
that, a $10 billion Economic Security package with substantial payments for pensioners and carers,
and also additional payments to families with children. That's a fairly significant stimulus in the
system as it stands, but we will review the situation as we go along. As the Prime Minister has
said on many occasions, we will take whatever decisions we deem necessary to protect the national
interest, and we will do it responsibly.

JOURNALIST:

There are tax cuts due next year, though, aren't there, Treasurer? Are they in the tough decisions
category, or are they in the category of election commitments?

TREASURER:

Well, Laura, as I said before, I'm not going through them all one by one.

JOURNALIST:

You singled out (inaudible).

TREASURER:

Yes I did.

JOURNALIST:

They're already in the Forward Estimates, aren't they?

TREASURER:

They are.

JOURNALIST:

So, as a result of already being in Forward Estimates, they're not (inaudible)?

TREASURER:

Laura, I'm not going to make the Budget on MYEFO day. We're going through our normal budgetary
process, as we always do for this time of year, and I'm not going to go through...

JOURNALIST:

But they are legislated.

TREASURER:

They are, absolutely.

JOURNALIST:

So, are they up for possible review?

TREASURER:

No. Michelle, I'm not ruling anything in or out. It doesn't mean to say they're up for possible
review.

JOURNALIST:

You're saying you're going to deliver all of your elections commitments. I would have thought they
were anointed.

TREASURER:

Well, they are. Yeah, they are.

JOURNALIST:

But they could be reviewed? We just want to be...

TREASURER:

I've just made the point that we are delivering our election commitments. They are being delivered.
I said over and above that, there are a whole host of other policy areas that we've got to look at.

JOURNALIST:

So, they are solid?

TREASURER:

Yes, they are solid.

JOURNALIST:

With the broadband plan, was that an election commitment?

TREASURER:

It certainly was.

JOURNALIST:

So Treasurer, just to clarify, the (inaudible) got $4.7 billion in funding already from Telstra
shares and cash that's in the Budget now? You've got that money...

TREASURER:

And it's an election commitment.

JOURNALIST:

And so that's going ahead?

TREASURER:

Look, I'm not going through one by one. I've made it clear we're keeping our election commitments.
I've made it clear that in terms of pensions there's a commitment out there, but we've got tough
decisions when it comes to some of the areas I mentioned. I'm not ruling any of them in and I'm not
ruling any of them out. I'm just going to go through, and the Government is going through, a normal
budgetary process.

JOURNALIST:

But you are guaranteeing election commitments?

TREASURER:

Yes.

JOURNALIST:

Treasurer, if you can guarantee every election commitment, it can't be that tough, can it?

TREASURER:

We actually delivered our election commitments in the last Budget. I just wanted to make that point
that they have been delivered in full. There are a range of other areas out there where people
would like to see action, and it's pretty long. I'm simply making the point that given the new
circumstances, we are going to have to cut our cloth to suit those circumstances, and we're not
going to be able to do the wish list that many people have for us to do. It's just that simple.

JOURNALIST:

Is that a message to the State Premiers ahead of those COAG discussions?

TREASURER:

It is not aimed at State Premiers. It is not aimed at any particular industry group or any
particular group in the community. I'm just simply making a very simple point, that we are in
difficult circumstances at the moment. There will be tough decisions to be made, and the Government
will handle and do all those things responsibly.

JOURNALIST:

Could you clarify for us the real GDP numbers, Treasurer? You've given us one for this year, but
what are the outer years (inaudible)?

TREASURER:

2009/10: 3 per cent.

JOURNALIST:

So, you're basically forecasting a very shallow...

TREASURER:

Sorry, nominal GDP 2008/09: 7╛. 2009/10: 3.

JOURNALIST:

Real?

TREASURER:

Real GDP: 2. 2009/10: 2╝.

JOURNALIST:

So, you're looking at a very shallow and reasonably short downturn at this point?

TREASURER:

At this point, 2╝ next year.