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Transcript of doorstop interview: 2 October 2012: Interest rates



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JOE HOCKEY:

This is an interest rate cut Australians badly need. The Reserve Bank has cut interest rates today not because the economy is doing well, but because parts of the economy are doing it tough. Unquestionably, Australia is facing some economic headwinds - and, of course, in the statement today the Reserve Bank recognises that the carbon tax itself is going to have an impact as well. Clearly, the international economic scene is of concern - it is quite clear the volatility coming out of Europe and the United States, together with a lower than expected growth rate out of China is having an impact on Australia. But it shouldn’t be this hard. The fact that there is still very low credit growth in Australia indicates that confidence in Australia is not where it should be. Unquestionably, having a Government making $120 billion of unfunded promises, together with a Government that is not telling Australians how it is going to pay for it, is having an impact. We are now only one quarter of one percent away from what Wayne Swan described as ‘emergency levels’ of interest rates. We are one cut away from ‘emergency levels’ of interest rates - they are Wayne Swan’s words. That is not because the Australian economy is doing well, it is because the Australian economy is doing it tough. We welcome the cut by the Reserve Bank, we think it is absolutely necessary. We would hope

- given the Reserve Bank identifies that our major banks are not under funding pressure - we would hope that the major banks would pass it on in full, and quickly - and in doing so, hopefully stimulate some domestic and consumer confidence.

JOURNALIST:

How urgent is it that Australian banks pass it on? Are you concerned that they might delay the decisions?

JOE HOCKEY:

I think the banks understand that the Australian economy is comparatively fragile. I think they want to see some credit growth, they want to see some stimulus in the housing market, and therefore they will pass it on quickly. I would be surprised if they didn’t - particularly given the Reserve Bank has identified that the banks are not under the sort of funding pressures they have been under previously.

JOURNALIST:

Is a $50 a month drop for families really going to do a lot?

JOE HOCKEY:

Well you might have an interest rate cut now, but increasing taxes on families with a carbon tax, and the as yet undisclosed increases in taxes to pay for Wayne Swan’s spending binge is going to make it all the more harder for Australians - so any relief that comes is most welcome. I think it was quite telling that the Reserve Bank said that the carbon tax and the impact of the carbon tax is yet to really hit, and it will come over the next few months - that proves everything that the Coalition has been saying about the carbon tax and the pressure on Australian family budgets.

JOURNALIST:

The Treasurer said this was a result of international pressures. Are you saying there are things the

Doorstop Tuesday, 2 October 2012 Errors and Omissions Excepted

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Government could have done to avoid today’s decision?

JOE HOCKEY:

Wayne Swan always blames everyone. He blames everyone else, except himself. He is the man who has been in charge of the Australian economy for the last five years. He is the man that has left us with the biggest deficits in Australian history. He is the man that has made us more vulnerable with his big spending ways. Wayne Swan has to accept some responsibility for the lack of confidence in Australia, for the fact that we are more fragile today than we should be. We are still at record levels of terms of trade. We are still at near record highs - much higher than anything under the Howard

and Costello Government - much higher. The fact is this Government is blowing the opportunity of the mining boom - a mining tax slows down mining investment, therefore we shouldn’t be surprised that the Reserve Bank identifies that as one of the headwinds that we have got to deal with. Quite obviously, the upside of the decision today is it will take some of the upward pressure off the Australian dollar - something that I called for this morning, as part of the consideration. But, ultimately, at the end of the day, the bottom line is the best way to take some upward pressure off interest rates is for the Government to actually deliver surpluses; not promise them, deliver them. That will give Australians some respite but you can’t keep promising on the never-never.

JOURNALIST:

Just on other matters, will you boycott the Alan Jones radio show?

JOE HOCKEY:

No.

JOURNALIST:

Why not?

JOE HOCKEY:

Because when you speak on any radio station you are speaking to an audience, not to, particularly, an individual who is asking questions. Frankly, I think it is the height of arrogance to say that you are going to boycott some sort of radio show that has an audience of five, six, or seven hundred thousand Australians. If you are that arrogant that you think that you don’t need to talk to Australians, no matter what their walk of life, then you shouldn’t be in Government.

JOURNALIST:

What do you think of the comments Alan Jones made?

JOE HOCKEY:

As I said this morning, they were hurtful, they were ill-considered, they were nasty. He has apologised, I think we shouldn’t be in the business of spending days and days in Australia commentating on commentators and their commentary. I think we should focus on the real issues that are impacting on Australians, like the interest rate cut now. Quite frankly, I think it is poor form for the Labor Party to start playing political games with this issue, given they haven’t banned Bob Ellis or anyone else from speaking at Labor Party events and some of the things he has said on the same matter, as I read it, are quite offensive.

JOURNALIST:

Companies and sponsors are backing away though.

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JOE HOCKEY:

That is their choice. Anything else that really matters to people?

JOURNALIST:

Do you think that the High Court ruling in favour of Andrew Forrest is good for Australia?

JOE HOCKEY:

It is a matter for the High Court. I think ASIC have some questions to answer because they, very aggressively, went after Mr Forrest. I know that Wayne Swan has been an outspoken critic of Andrew Forrest, so I would hope that ASIC have acted totally independently. I believe they have, but, quite frankly, this is a case that I don’t think ASIC would have wanted to lose and therefore it says a lot about the case overall.

JOURNALIST:

Wayne Swan said he wasn’t across the ruling. Should he have been?

JOE HOCKEY:

Of course he should have. He is the man responsible for it - well not for the ruling, but for ASIC ultimately. Frankly, he has made it part of his hate campaign - to run a campaign against Andrew Forrest, and a number of others - like the Republican Party in the US - now he is running it against radio station commentators. I tell you what, Wayne Swan has a long hate list. Thank you.

[ENDS]

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