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Transcript of doorstop interview: London: 12 March 2009: G20 Finance Ministers' meeting; Australian economy; Australian labour force forecast.



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DOORSTOP INTERVIEW

LONDON

12 MARCH 2009

SUBJECTS: G20 Finance Ministers' Meeting, Australian Economy, Australian Labour Force Forecast.

TREASURER:

I'm in London for the G20 Finance Ministers' meeting, as well as to talk to international investors in Australia and to meet with important bodies like the IMF and the World Bank. It's a very important time for Australia to engage. It's an opportunity for me, particularly through a speech at the London School of Economics tomorrow, to underline the strength in the Australian economy, in the middle of this global recession. It's also a very important time for Australia to engage through the G20. Because it's a global recession it deserves global responses, and the Prime Minister and I have been very active in engaging G20 countries in the type of global responses that are required in the environment we find ourselves. This will be an important meeting. We'll be preparing the ground for the Leaders' meeting in a couple of weeks' time. I'm looking forward to working with my fellow Finance Ministers in the G20.

JOURNALIST:

Ben Bernanke, the chair of the US Federal Reserve, doesn't think any concrete decisions will be made at this meeting or at the April summit. What's your view on that?

TREASURER:

This is a Finance Ministers' meeting. We're preparing the ground for the Leaders' meeting in a couple of weeks' time. There are very important issues which require further discussion, arising from the meeting in Washington late last year, very important questions relating to toxic assets in the banking system and the impact of that on the flow of credit, important questions about the future of the IMF; regulation of systemically important financial institutions. These are all matters that are on the agenda, and they are very important. We've seen in recent weeks

the contraction in the global economy. We've seen the savagery of the impact of that in terms of countries around the world, and of course, Australia's not immune from that.

JOURNALIST:

They're important questions, but will we be getting any answers this weekend?

TREASURER:

The Finance Ministers are preparing the ground for the Leaders' meeting in a couple of weeks' time. That's what we do as Finance Ministers. We're here talking through all those issues for the Leaders when they come to the Leaders' meeting in a couple of weeks' time. So, it is not the job of the Finance Ministers to be taking final decisions this weekend; but there is a very important job to do, to go through all of those very important issues, given what is occurring in the global economy and the contraction that's taking place, the impact on growth and consequently employment and confidence in the world economy. These are important things to discuss.

JOURNALIST:

Is Australia expecting concrete outcomes on April 2nd when the Leaders meet?

TREASURER:

Well, certainly we've put forward a constructive agenda, we're one of 20 countries that will be at the table, the Prime Minister has put forward his proposals, particularly when it comes to solving the problem of toxic assets in the banking system, which is impacting upon confidence in the banking system and impacting upon growth. We are very concerned about the IMF and what should be done to reform the IMF - we'll be taking those proposals to the table. We're but one of 20 countries at the table, but we want our voice to be heard. But I can't predict the outcome of that meeting, nor should I.

JOURNALIST:

Do you support the US moves to pump an extra $500 million into the IMF?

TREASURER:

Well, certainly we are very supportive of IMF reform. We certainly think the resources of the IMF need to be increased substantially, and we also

think there needs to be representational reform in the IMF, so they are all matters on the agenda.

JOURNALIST:

Can Australia contribute to any increase in funds for the IMF?

TREASURER:

It's too early to make any prediction about that, but we're supportive.

JOURNALIST:

Can Australia…?

TREASURER:

Well, of course we will, because we are a member. We are a member of the IMF and we contribute to the IMF. But the nature of that increase is up for discussion at this meeting, and it will go through to the Leaders' meeting, and we will be a participant in that.

JOURNALIST:

There's been a bit of a split between the Americans and British and some European countries, some of the European believe there should be more focus at this meeting on regulation while the other countries say it should be more on bailouts. Where does Australia stand?

TREASURER:

Well, I've read those reports. I don't know that they're correct. I'll gauge that when I talk to my fellow Finance Ministers over the weekend.

JOURNALIST:

But does Australia prefer that there should be more focus on one or the other?

TREASURER:

Well, Australia has already put forward domestically a very substantial economic stimulus, that's important, but we also need reform in the banking system globally because of the impact that's having on confidence and employment. You need both fiscal stimulus and you certainly need reform in the banking system, and all the other issues I've talked about today. They all go together. Having one without the other simply doesn't work.

JOURNALIST:

You mentioned that Australia has weathered the financial storm better than most. Does that mean you bring something particular to the table as far as recommendations at the summit?

TREASURER:

Well, certainly Australia is doing better than most other developed countries, but we are simply not immune from a global recession. Certainly the experience of our regulatory system is one that's worthwhile talking about in these meetings. It certainly has done a lot better than many other countries. We have four of the AA-rated banks left in the world in Australia, out of I think 11. So, there are certainly some experiences that are worthwhile talking about from an Australian experience at these meetings, no doubt about that.

JOURNALIST:

Do you think, given that Australia is in a better position relative than others, that others should listen to Australia?

TREASURER:

Well, we simply have a seat at the table, and we want to engage and discuss these important issues, because in a global recession no country is immune. We want to make a positive contribution, we're doing everything we can nationally to cushion our country from the impacts of the global recession, but at the end of the day a global recession also requires global responses, and that's what we're working on here.

JOURNALIST:

Is Australia in a recession yet?

TREASURER:

There's a lot of talk about technical definitions, and I prefer to say that what we're doing is everything we possibly can to support growth, given that we are in the middle of a global recession.

JOURNALIST:

Has the Treasury revised its jobs numbers now that these very dire unemployment numbers came out this week?

TREASURER:

No, we've put forward our economics forecasts in the UEFO document of a month or so ago, and new forecasts will come naturally, as they always do, in the Budget.

JOURNALIST:

But you'll have to revise them upwards, the unemployment figures?

TREASURER:

New forecasts will be in the budget.