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Turnbull's 'ego' didn't contribute to rates cut: Swan

The World Today - Wednesday, 8 October , 2008 12:15:00

Reporter: Sabra Lane

TANYA NOLAN: Listen to the Federal Government's take on yesterday's unexpected move by the Reserve
Bank to cut interest rates by one percentage point and you will hear the word "decisive" repeated

The Prime Minister Kevin Rudd says the Reserve Bank took decisive action to help strengthen
Australia's position amid the global financial crisis and Treasurer Wayne Swan has praised the
Reserve for acting decisively on monetary policy.

But the Opposition leader Malcolm Turnbull says it's thanks to him that the banks are passing on
most of the cut to borrowers.

Wayne Swan begs to differ, saying the bank's decision has everything to do with the current global
financial crisis and not as he puts it, Mr Turnbull's ego.

From Canberra, Sabra Lane reports.

SABRA LANE: The Treasurer, Prime Minister, and Opposition leader conducted something of a media
blitz this morning, selling their messages on the Reserve Bank's extraordinary decision.

WAYNE SWAN: Well certainly this will be welcome relief for families and businesses, it's a
substantial easing of monetary policy and because of that it will certainly strengthen the economy.

KEVIN RUDD: This was decisive action by Reserve Bank, decisive action to help families, but
decisive action also, which we believe which is consistent with global economic outlook we face.

MALCOLM TURNBULL: The only people I've been criticising have been Mr Swan and Mr Rudd, for their
failure to demand accountability, for their supine attitude and for their abandonment of thousands
of borrowers and millions of homebuyers around Australia.

SABRA LANE: Mr Turnbull's been pressuring Australia's big banks to pass on the entire interest rate
cut to their customers; so far, they've passed on 80 per cent of it.

The Opposition leader says the Commonwealth Bank's $2-billion takeover of Perth-based BankWest
shows the banks are strong enough to pass on the full one percentage point cut.

MALCOLM TURNBULL: I think it demonstrates the financial strength of the Commonwealth Bank; the
Commonwealth Bank is here buying, spending $2-billion to buy another bank, that's not the action of
a bank that is under dire financial pressure.

SABRA LANE: The Prime Minister attacked Mr Turnbull's stance in an opinion piece written for a News
Limited newspaper today, he says now is not the time for risk-taking, best guesses or irresponsible
populism. But he expects the banks will pass on the rest of the cut, when financial markets

Mr Turnbull shrugged off the Prime Minister's attack on Radio National.

MALCOLM TURNBULL: Like so much of what he says it's just words and he may as well have said, you
know, transformational collateralism, or something, you know, he's always coming out with words,
you know, maybe he can weave this into his campaign to eliminate greed in the world.

SABRA LANE: Mr Rudd says for now, his priorities are the economy, and the economic stability of the
retail banks.

But, Mr Turnbull says that means the Government's run up the white flag on borrowers and small

MALCOLM TURNBULL: I have stood up for borrowers and I think borrowers have got a better deal as a
result. Wayne Swan and Kevin Rudd abandoned them last week.

FRAN KELLY: So how much of this rate cut, rate cut from the banks announced yesterday do you take
credit for.

MALCOLM TURNBULL: I am not taking credit for...

FRAN KELLY: Well, yes you are.

WAYNE SWAN: Well Okay Fran. Can I just finish the sentence now; I am not taking credit for any
particular amount of it, who can say.

SABRA LANE: Treasurer, Wayne Swan pounced.

WAYNE SWAN: I know Mr Turnbull thinks that the whole world revolves around his ego, but there are
some events in the world that are much bigger than Mr Turnbull's ego.

The fact is the Reserve Bank is responding to international events, and it's responding by
providing an easing of monetary policy for Australia families. It's got absolutely nothing to do
with Mr Turnbull, basically since the Great Depression there has not been an event of this nature.

SABRA LANE: The Prime Minister told ABC Radio in Melbourne, given the Reserve Bank's action, his
Government's surplus, and the high standard of regulation here, that Australia was the best placed
economy in the world to cope with the crisis.

KEVIN RUDD: There are fundamental distinctions between the state of our major banks here in
Australia, and the state of major banks in the United States and in Europe. The balance sheets are
strong, we have the best bank regulators in the world.

And because of that and because we have strong budget policy with a $22-billion surplus as a buffer
for the future, we are best positioned of all economies in the world to see Australia through this
global economic storm.

SABRA LANE: And he told Fairfax Radio, that China will help many countries through the instability.
While China's growth rate will slow slightly, to around 9 per cent Mr Rudd says it will still need
resources, which will help Australia's bottom line.

KEVIN RUDD: China has a huge impact on the economies of the East Asia region, as well as now the
global economy. My understanding is that china will continue to drive strong economic growth for
its own national purposes, but that is also good for countries like Australia because China is such
a major trading partner of ours.

TANYA NOLAN: Prime Minister Kevin Rudd.