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Transcript of doorstop: Waterfront Place, Brisbane: 3 November 2008: global financial crisis; economic security strategy; housing data; interest rates; Rupert Murdoch comments.

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Waterfront Place, Brisbane

3 November 2008


SUBJECTS: Global Financial Crisis; Economic Security Strategy; Housing Data; Interest Rates; Rupert Murdoch Comments

TREASURER: There’s some economic data out today which demonstrates yet again that the Australian economy is not immune from the fallout of the global financial crisis. And of course, the economy is slowing as a consequence of the global financial crisis and that’s why the Government put in place its Economic Security Strategy - an Economic Security Strategy to boost demand where it’s needed most, particularly with households and particularly in the housing sector.

JOURNALIST: Is the economy slowing faster than the Government (inaudible)?

TREASURER: The economy is definitely slowing as a consequence of the global financial crisis. The Government will publish in the next week or so our Mid-Year Economic and Fiscal Outlook and all of those figures will be out there for everybody to see. But I would just make this point: the Government does expect to see positive growth. We expect

to see positive growth because Australia is in a far better position than just about any other country in the world. We are not immune from the fallout of the global financial crisis. You can see that in the data today. But we are in a far better position than many other countries around the world.

JOURNALIST: Treasurer, do today’s figures lend any more to the concept of a possible recession?

TREASURER: As I said before, we do expect to see positive economic growth in Australia despite the impact of the global financial crisis. The global financial crisis is impacting upon business, it’s impacting upon households and that’s why we targeted our Economic Security Strategy at households and we particularly targeted the strategy at the housing sector - to boost demand in the face of the global financial crisis.

JOURNALIST: Treasurer, are you concerned about the housing data out today or do you think that your (inaudible) package will alleviate that in the coming months?

TREASURER: We acted decisively with our housing package to boost demand in the housing sector. It’s a very important part of our national economy and we believe that the initiatives that we put in the Economic Security Strategy will boost demand in that sector.

JOURNALIST: Treasurer, the housing data shows that the house prices in Brisbane and Perth have dropped more than the national average. Why do you think this is?

TREASURER: These have been very strong markets and there have also been over time very strong increases in prices. But the one thing I do know about the housing sector generally is that there still is a shortage of housing for many Australians, and we’re going to boost this sector through the increase in the First Home Owner Grant. So, we believe that will strengthen the sector over time.

JOURNALIST: The predicted rate cut tomorrow, do you think all banks should be passing that on?

TREASURER: I can’t predict what the independent Reserve Bank will do tomorrow but certainly if there is a decision from the Reserve Bank to cut rates, I would urge all the banks to pass that on as rapidly as is possible.

JOURNALIST: Is it possible for them to pass it on fully? You did give them a bit of slack there earlier. You’ve pumped the tyres up since.

TREASURER: We have volatile markets out there at the moment. I would expect all of the banks to pass on any cut, should it be announced tomorrow, as quickly and as rapidly as they possibly can.

JOURNALIST: And in full?

TREASURER: Well, in full. If they can’t do in full, they’d better have a pretty good explanation.

JOURNALIST: Rupert Murdoch said next year that Australians would fall on hard times. What do you have to say about that?

TREASURER: Australia’s not immune from the fallout of the global financial crisis. But I think many people like Mr Murdoch understand that in the middle of all of this Australia will do far better than many other countries in the world. We are better placed to withstand the fallout than many other countries, but we’re certainly not immune.

JOURANLIST: Heather Ridout said that there’s a crisis of confidence in the Australian economy. Do you agree with that, and what’s the Government doing to shore up confidence?

TREASURER: The international financial crisis has been profound in its impact around the world and that’s why the Government acted so swiftly to put in place our economic security package to boost demand, and why we acted so swiftly to put in place our bank deposit guarantee and term funding guarantees.