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(generated from captions) blues people have got used to seeing every three years are

over. There is some relief

for borrowers with the RBA board leaving interest rates

on hold for a ninth straight

month. The RBA point to

uncertainty on global

financial markets and high

inflation data as it left the

cash rate at 4.75%. And

treasurer Wayne Swan has

spoken to reporters about the

RBA decision. I think it's pretty fair to say that

today's decision by the independent Reserve Bank is

welcome relief for families

and businesses that are doing

it tough. It means that a

family with a $300,000

mortgage are still paying

$4,500 a year less than they

were prior to the global

financial crisis. But of

course if you're struggling

with cost of living

pressures, every dollar

counts and for the Government's part what we are

putting in place is the fastest fiscal consolidation

on record to make sure that

we don't add to any inflationary pressures in our

economy. And of course we are

investing directly in productivity enhancing infrastructure, education and

skills. These are all very

important. I' also make the

point that the RBA has very

strong ly said that our

Government fiscal policy is

cite. That's very important

to consider in the

environment that we are in.

investments and We are making historic

infrastructure and investing

in productivity enhancing

reforms which ensure long

derm sustainable growth in

our country. I wanted to make

a few remarks with the global

economy. There's been a lot

happening out there.

Certainly we've seen a very

important first step in the

United States today, but I

think the United States has

still got a long way to go

before they get their budget

in order. We've also seen

global uncertainty and

instability in Europe in

recent times. What these all

demonstrate is that in both

Europe and in the United

States there's a very painful

period of adjustment a head

when it comes to getting

their budgets in order and

reducing public debt. But all

of this is a very stark

reminder of just how healthy

the Australian Government

budget is compared to other

developed economies. Our net

debt will peak at less than

one tenth of major advanced

economies. And we've put in

place a very effective fiscal

policy when we move to

stimulate our economy in the

face of the global recession,

we also put in place an exit

strategy at the same time.

And we are implementing that exit strategy and bringing

our budget back to surplus in

2012/13, unlike virtually any

other major developed economy

. So our Government has put

in place the appropriate

fiscal settings in a way very

few other advanced economies

have responded. We're

bringing our budget back to

surplus, statement invest

inning productivity enhancing

reforms, work force

participation and Sprts. When

you look at the Australian

economy our economic

fundamentals are strong. We

compare our unemployment to have low unemployment. If you

United States it is almost the unemployment in the

twice the level of Australia.

We have strong financial

institutions, world class

regulators and of course we

are ideally located in the

strongest growing region of

the world. We've seen the

shift in economic power from

west to east which also

serves to assist our economy.

We also have a well functioning parliament and

strong Government that has

got its budget through in

record time. Also a proven

track record of dealing with global economic instability.

We also recognise that not everybody in the Australian

economy is in the fast lane,

households and businesses who and there are still can

are doing it tough in what

for many is a patchwork

economy. What we will do as I

Government is get on with the

job of governing, put in the

essential reforms to ensure strong economic growth as

well as spreading opportunity

right around our country.

Over to you. They're keen to

fire interest rate trigger.

It's just some of those

events ... I don't accept

that characterisation as all.

As you know these decisions

are taken by the independent

Reserve Bank. What I see in

assessment of the global the statement today is an

economy, an assessment of the

Australian economy, the

Reserve Bank will take its

decisions on a month by month

basis. But I don't accept

that you can reach an

automatic conclusion from

today's statement. In the

statement the investment in

resources is picking up,

cautious spending by

householding is having a

dampening effect, why do you

think households are being so

cautious? I've spoke be

about the cautious consumer

for many months now. I first made a significant speech

about this back in April. I

made a number of points, I

think they're really

important to understand.

First and foremost we are

still living with the

aftershocks, if you like, the aftershocks of the global

financial crisis and the

global recession. That had a

dramatic impact and impact on

both income and wealth in the

Australian economy, the share

market is not back to where

it was prior to the global

financial crisis, many people

with retirement savings are

still not back to where they

were are prior to the glesk.

We've also seen the impact on

international uncertain. This

has been broadcast into our

economy month after month.

We've had a diet of this

broadcast in our economy from

both Europe and the United

States over the last three or

four days. On top of that,

you've also got the high Australian dollar bearing

down on many of our

industries, particularly our

tourism industry and our manufacturing industry that are exporting. There are a

variety of factors which are

impacting on consumer

sentiment and producing the

outcome of a cautious

consumer. On top of that

you've got this entirelying

negative and destructive

campaign of talking our

economy down by tat Tony

Abbott and his tea party

Liberals, that's what's been

going on in recent times,

those things combined. But

the advent of the cautious

consumer has been with us for

some time. We saw the savings

rate in Australia tick up during the global financial

crisis, we saw it tick up

again at the end of last

year, and we've seen it tick

up through this year. What

that means is Australians are saving more and spending

less. There are a variety of

influences on that outcome

and I think I've accurately

just described all of those

influence. Treasurer, in a

statement by the Reserve Bank

it says the flood recovery

and the resources sector recovery won't happen until

last year. Is that the reason

for the Reserve Bank to hold

off? No I think what is

evident is that the floods,

the natural disasters, the

floods in Queensland, psych

clone Yasi, the bushfires in

Victoria in combination of

what occurred in Japan did

have a dramatic impact on our

economy. We saw that in the

March quarter national

accounts. So there's been a

whole range of factors

impacting upon confidence and

growth, from the higher

dollar, the natural disasters

and of course the hangover

effects of the global financial crisis and the

global recession, exacerbated

by this new bout of political

and economic instability in

Europe and the United States.

I think Australians can take great confidence from the

fact that here in Australia

we have a Government which

has pushed through its budget

in record time, we have a

Government in Australia which

has a proven track record of dealing with global

instability. All of those

things mean our fundamentals

are strong and we stand this

stark contrast to the events

that are happening in Europe.

Our public debt is low and

our budget is in good nick

compared to those other countries. You didn't

mention the fact that

consumers are expecting to

pay carbon tax from July 1

next year. Can you say that

has had no effect? I think

we've had a very negative

debate in Australia led by the Liberal Party which has

talked our economy down day

in day out. Let's be frank

about this. The carbon price doesn't start for another

year. What I'm dealing with

is what is happening right

now. You've had the Liberal

Party talking our economy

down out there with their wrecking ball smashing

confidence going round making

all sorts of extraordinary

untrue statements about the

impact of a carbon price.

You've also had all of those

other factors I spoke about

before, the impact of the

natural disasters, the high

er dollar. There are a lot of people doing it tough because

of the higher dollar, a lot

of tourism operators I spoke

to in Cairns, we dove a

paxwork economy and that's

why when we brought down the

budget in May this year we talked about the need to spread opportunity right

around our economy, that our

budget had to deal with not

only the fact that we've got

a big investment pipeline and a resources boom but had to

make sure we spread the opportunities from that to

every corner of our patchwork economy because not everybody

in our economy is in the fast

lane of the resources boom.

On the hospital reform, as

treasurer how concern ed are

you that $16 billion had to

be spent to bring the states

on board on... I accept

accept that characterisation

at all. It is entirely affordable. It recognises the

fact that we have to have in place long term agreements

but also we've got to get

value for money. What is put

in place in this agreement is

a way to ensure we do have

get value for money. I think

this is a ground breaking

agreement for Australia. The

issue of intergovernmental

relationships in held is one

that has bedevilled our

social policy for a long

time. This will inject

certainty, value for money outcomes, I think that's

something we can all be