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Tuesday, 14 October 2008
Page: 8963

Mr TURNBULL (2:51 PM) —My question is to the Prime Minister. With the introduction of government guarantees for deposit-taking institutions, does the Prime Minister now believe that the banks should pass on the full one per cent rate cut from the recent decision of the Reserve Bank?

Mr RUDD (Prime Minister) —The government’s first responsibility is to take every necessary action to maintain the long-term stability of the Australian financial system, and we take that responsibility very seriously—hence why we made the statements we made a week or so ago about the pass-through of the recent 100 basis point decrease in official rates by the Reserve Bank, in contrast to the populist statement by the Leader of the Opposition, who as a former merchant banker should know better that in these difficult times—

Opposition members interjecting—

Mr RUDD —The interjection from the Leader of the Opposition is that he does know better. He knows better than the Reserve Bank of Australia, he knows better than the Australian Prudential Regulation Authority, he knows better than the Secretary of the Treasury, he knows better than the council of economic regulators and he knows better, on his own admission, than anyone else on God’s earth on this question. Can I say to the Leader of the Opposition: there are some serious issues at stake here. It is a global financial crisis requiring decisive action by governments around the world, including this government, to maintain the stability of our financial system and we will act in accordance with the regulator’s advice in this difficult time rather than take short-term, populist positions in order to secure a headline.