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Hotel Sofitel, Melbourne, 12.30pm Thursday 31 July 1997: transcript of doorstop [Thredbo disaster; bombing in Israel; interest rates]


JOURNALIST: Mr Costello, have you a response to the tragedy at Thredbo?

TREASURER: Yes, I am sure that the hearts of all Australians will go out to the victims and the families that have suffered this terrible loss at Thredbo, and on behalf of all Australians I convey our sympathy to them. The Commonwealth Government is ready to provide whatever assistance it can on request. The Emergency Services of New South Wales are handling the matter, and I've spoken earlier today with Premier Bob Carr and conveyed to him that the Australian Defence Forces will make available any equipment that is required. I believe at this stage that they have the necessary technical equipment and civilian personnel in place to handle the rescue efforts.

JOURNALIST: How did you first hear about the tragedy?

TREASURER: I was notified very early this morning by relevant Commonwealth officers. I relayed the offer of Commonwealth assistance to Mr Carr, the New South Wales State Emergency Services handling the matter, and I believe they have all the necessary resources at their disposal, and we just hope that the rescue effort can go ahead.


While you are here, I just want to say one other thing about the tragic bombing in Israel overnight. The Australian Government condemns terrorism. I've written to Prime Minister Netanyahu this morning, and indicated to him the Australian Government's deep concern as to this tragedy, the fact that we condemn terrorism, that we believe and hope that this will not set back the peace process and the Australian Government wishes the peace process success in continuing.

JOURNALIST: The High Court has ruled that there be no compensation for the stolen generation children. Was that the right decision?

TREASURER: Well, the High Court makes its decisions according to law, and it's made its decision on constitutional grounds. The case was actually argued by the previous government and what that means is that there is no constitutional entitlement to sue, as I understand it, that's a decision of law, and of course we abide by the High Court's decision.

JOURNALIST: Treasurer, do you plan to visit Thredbo at some stage?

TREASURER: Well look, if I can make a contribution, of course. I'll have a look at that, but at this stage it's the rescue effort that's going ahead, and it's important that the rescue effort go ahead with all resources unhindered.

JOURNALIST: Are you happy with the banks' response to the official rate cut...?

TREASURER: Well look, the banks have to pass on the full amount of interest rate reductions to business. I called on them to do that. A number of them have passed it on in relation to mortgages, and it's important that the banks do. It's important that customers shop around actually . If you're with one of the banks that's not passing on the full amount, go to a mortgage originator or a bank that is, because there are good deals that can be done out there at the moment, and the reason why interest rates have been brought down is not to benefit the banks it's to benefit the home buyer, and it's to benefit business.

JOURNALIST: A couple of weeks ago you were unenthusiastic about the need for a further interest rate cut, saying the first four had to be given time to take effect. How do you view this latest interest rate cut then?

TREASURER: Well, the point I've always made is that interest rate reductions take 12 to 18 months to work their way through the economy. Some of the rate reductions late last year are still to work their way through the full economy. If you look at the interest rate reduction yesterday some of the banks are not talking about passing it on until September, so it doesn't even take effect until September, so they work on a delayed time scale. But the thing is this, that as those interest rate reductions work their way through the economy it's a great bonus there for home buyers and for business. The bonus for home buyers of these interest rate reductions is that you can now save $330 a month on your interest bill.

JOURNALIST: Today's retail trade figures show a fall of 1.8 per cent seasonally-adjusted. Is that an alarming sign?

TREASURER: Oh no. Today's retail trade figures follow very substantial rises in the preceding month. The figures bounce around a bit, but over the course of the year they have been strengthening in trend terms, and this is something to be welcomed. What they show is that retail spending, whilst not booming, is solid, and it is expected to continue over the course of the year.