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Govt says Opposition's recession diversion cl -

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Govt says Opposition's recession diversion claim is ridiculous

Reporter: Sabra Lane

PETER CAVE: Senior government ministers say they're now using the word 'recession' when talking
about Australia's future prospects, because it's part of the regular 'full and frank discussion'
they're having with the Australian public about the economy.

The Treasurer Wayne Swan says the Opposition's claim that the Government is only using the word now
to deflect attention from its immigration policies is 'ridiculous and desperate'.

But the shadow Treasurer Joe Hockey says the Government isn't being full and frank, saying if it
were, the Prime Minister should have made the admission to the public months ago.

Mr Hockey claims the declaration is a carefully manipulated distraction to divert the public's
attention from last week's fatal explosion on an asylum seeker boat which claimed five lives.

From Canberra, Sabra Lane reports.

SABRA LANE: Economists and financial market analysts say they've known it for weeks - some say
months - and yesterday the Prime Minister admitted it was inevitable Australia would slide into a
recession.

Since last month, Ministers have consistently said the nation would experience a period of negative
growth, but they've been loath to say the word 'recession'.

But given his boss finally used the R-word, the federal Treasurer also felt comfortable saying it
this morning.

WAYNE SWAN: Given the state of the international economy and the further downgrades to growth
prospects that are coming from organisations across the world, particularly the IMF, I think it is
inevitable that we will be dragged towards recession.

SABRA LANE: Wayne Swan says he can't say how deep or long the recession will be, saying the
information will be released on Budget night.

But he says Australia's flagging economic fortunes are due to global factors.

The International Monetary Fund is due to update its forecasts for the world tomorrow. Mr Swan says
the figures probably won't be good.

But he won't say what new information the Government's relying on to warn about the recession.

WAYNE SWAN: What we can say is that growth is slowing dramatically.

We won't see the official figures for some time.

SABRA LANE: Well, the Prime Minister's signalled he wants to talk about a recession now.

He raised it yesterday, you've backed his admission, but you don't want to talk about the
specifics. Why?

WAYNE SWAN: We have had a regular and frank discussion with the Australian people over months.

I said back in March, as the Prime Minister said back in March, that it was almost inevitable.

SABRA LANE: And Mr Swan has dismissed the opposition's claim the Government's only using the word
recession now because it wants to deflect attention from its border protection policies and last
week's explosion and five deaths off Ashmore Reef.

WAYNE SWAN: That is completely ridiculous, and demonstrates just how desperate the Opposition have
become.

SABRA LANE: Given the concern the Government has about the asylum seeker issue then, will the
Department of Immigration, Defence and Customs and Border Security be quarantined in next month's
Budget?

WAYNE SWAN: Oh look, I'm not going to speculate about next month's Budget, nor am I going to
speculate about the issues to do with asylum seekers.

The Federal Police inquiry is ongoing; they will reach their conclusions. And the Government has
absolutely no intention of running across that independent process.

But I can make this point, and I think it's very important.

The global environment has never been more critical to the framing of a Budget in this country, and
the Budget has never been framed at a more difficult time.

And both the Prime Minister and myself will engage in a frank and regular discussion with the
Australian people about the international challenges that poses for us, and what we must do to
capitalise on the opportunities that will flow as we go through a period of recovery and
reconstruction.

SABRA LANE: The Shadow Treasurer Joe Hockey says the Government's argument that it's now using the
word recession because it's being frank with the public is rubbish.

JOE HOCKEY: Well, they're not having a frank discussion with the Australian public.

If they were doing so, they would have done it some months ago when certainly, in non-agricultural
economy of Australia, we were in recession.

And it certainly appears that we are in recession. This is just a distraction - a carefully
manipulated distraction - from the tragic event of the burning and sinking of a vessel north of
Australia, and the refugee problem that Kevin Rudd now has.

SABRA LANE: The Government had to make the admission at some point. What's wrong with making it
yesterday?

JOE HOCKEY: Well, the timing of yesterday's announcement was extraordinary.

There was no new economic data, and it's all part of Kevin Rudd's very carefully managed media
diary; his attempt to have distractions from issues which he does not control and where he has no
answers, such as that relating to illegal immigrants.

It is also the case that the Government is probably in the midst of Budget considerations, and
recognises that all the promises that they've made in relation to cash splashes and major new
announcements are accounting for a massive part of the Budget, and that they have a Budget that is
clearly in freefall.

SABRA LANE: Mr Hockey says if the Government is serious about transparency it should take the
public into its confidence now, and say what spending cuts and tax increases it's considering in
the Budget to help the country out of the recession.

JOE HOCKEY: They are not being fair dinkum with the Australian people about the need in the future
for increased taxes, for higher interest rates and for massive cuts right across the board in
Government expenditure.

So far, we've had Kevin Rudd doing a very good imitation of Santa Claus.

He has spent, spent, spent.

He has failed to deliver on his job promises.

And the net impact is, we have rising unemployment, and Australia very definitely in a very deep
economic downturn.

PETER CAVE: The shadow Treasurer Joe Hockey ending that report from Sabra Lane.