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Transcript of doorstop interview: Sydney: 5 August 2008: interest rates; Grocerychoice; overseas visit.

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5 August 2008


Subjects: Interest rates; GROCERYchoice; overseas visit.



Well the Reserve Bank today has kept interest rates on hold but the important thing is that the Reserve Bank is so concerned about the state of the Australian economy that it’s forecasting that there is likely to be movement of rates down in the foreseeable

future. Mr Rudd and Mr Swan between them over eight months have destroyed business and consumer confidence in the Australian economy. They talk up inflation as being a crisis. They delivered higher taxes in the Budget and now we’ve seen petrol and grocery prices increase, interest rates increase, superannuation accounts, the stock market and the things that are important to Australians falling.

It’s very important that Mr Rudd and Mr Swan take responsibility for the management of Australia’s $1 trillion economy. Australians are doing it tough and it’s going to be a very tough year for this country. It’s very important that Mr Rudd and

Mr Swan stand up for Australia, that they take responsibility for this economy and most importantly that they stop talking down the Australian economy, which they certainly did in the first part of the year.

Today we’ve had the release of the ACCC report into grocery prices and in 2007 Mr Rudd went around Australia telling Australians a lot of things. He said he’d do something about the price of petrol. He hasn’t. He said he’d do something about the price of groceries. The report today doesn’t do anything about it at all. In fact what Mr Rudd’s now proposing as some sort of what he calls GROCERYchoice is in fact GroceryWatch and Australians have woken up to FuelWatch as being nothing more then a stunt. So too GroceryWatch. And giving shoppers a pair of binoculars and telling them to look at the price of groceries is not going to do anything to bring it down.


We will carefully examine the report from the ACCC. I think we’ve got to be quite concerned about the compulsory nature of unit pricing on small independent retailers and grocers throughout the country. We know that Coles and Woolworths and Franklins are able to, and some of them have already started to move in the direction of unit pricing, but you’ve got to be very concerned about the impact on small retailers and small grocers throughout Australia. It’s very important that Mr Rudd doesn’t do anything at all to reduce competition in Australia’s grocery sector and certainly we’re able to see that GroceryWatch is nothing more then a stunt. It’s not going to bring down the price of groceries at all and it’s about time Mr Rudd came clean with Australians and admitted that he hasn’t really got any real solution for the price of petrol or for the price of groceries.

Tonight I will be going overseas to London, to New York and Washington. I will be having a range of meetings with people in the financial, defence, security, environmental and political and business arenas. I will be meeting key officials from the Bank of England, the Defence Secretary from the United Kingdom and a variety of UK investors. I will also, in Washington, be meeting with the Deputy Secretaries of Treasury, Defence, State and National Intelligence. I will also be having meetings with US investors in Australia, both in Washington and in New York.


Do you think, considering what’s happened with interest rates today, do you think the Australian economy is slowing too quickly?


Well look, I’ve said it earlier in the year, and I say it again, the Reserve Bank has been very bullish over the last six months especially. The Reserve Bank actually considered a 50 basis point, half a percentage point increase back in February. We had Mr Rudd and Mr Swan talking up an inflationary crisis early in the year, reducing confidence in the Australian economy. Nearly $20 billion of tax increases and increases in expenditure in the federal Budget, and at this stage it certainly looks as if with the worst start in retail for 30 years for this year, a fall in new business lending, a fall in new house lending, in personal lending, increasing unemployment - it is obvious that the economy is slowing. That was always Mr Rudd’s plan to slow the

economy. And now the Reserve Bank is in a position, in looking forward, where it is so concerned about the state of the Australian economy, that it’s forecasting there may be room to reduce interest rates in the future as a result of the mismanagement of the economy by Mr Rudd and Mr Swan.


Some people might say that you’re running away from a brewing leadership debate in going overseas tonight. What do you say to that and do you think that you should be here to address any issues that may be arising?


I’ve got a job to do and I intend to keep doing it.



Dr Nelson has Peter Costello told you about his plans?


I’ve got nothing to add to what I’ve already said about that.


Peter Coleman today said he’s behaving like Hamlet. Do you think he is?


Who Peter Coleman?


….Peter Costello….


Look, I’ve got nothing to add to what I’ve already said about it.

Look, the important thing here is that we have Australians who are struggling to feed, clothe and house their children. Australians that are worried about keeping their jobs, who see the value of their superannuation accounts falling, petrol and grocery prices going up, and plummeting confidence in the Australian economy. It is absolutely essential that Mr Rudd and Mr Swan take responsibility for the Australian economy and make real decisions that are in the interests of everyday Australians. I mean what is really worrying Australians at the moment is the capacity for all Australians to keep being able to work at their jobs, to keep their homes, put groceries in the trolley and petrol in the car.

They’re the things about which we are most concerned, and we’ve got the worst start in retail for 30 years. Four of the last six months we’ve had a fall in retail sales. We’ve gone from 24 per cent growth in new business lending at the start of the year

to now only four per cent. We’ve also moved to less then 10 per cent growth in new household lending, the lowest in 26 years, and we’ve also got the lowest rate of personal lending since 1992. On every single benchmark that is important to Australia, Mr Rudd and Mr Swan have failed. All talk. No action. And particularly no action on the things that count - and Mr Rudd has a new tax, T-A-X, coming down the line in the form of an emissions trading scheme and he needs to start to be honest with Australians in terms of what that will mean and rushing it in by 2010.


In saying all that, what would the Coalition have the Government do to fix the economy?



Well the most important thing is that Mr Rudd and Mr Swan complained about the fact they had an inflationary challenge to address. They then talked up inflation as being a crisis. The day before the Reserve Bank actually had a meeting, the Treasurer, Mr Swan, said that the inflationary genie was out of the bottle. We certainly should not have had tax increases in the Budget. We should not have had an increase in spending. And importantly we should have had consistent focus on the economic fundamentals for Australia. Confidence, like hope, is everything. It is fragile and powerful. And Mr Rudd and Mr Swan between them have shattered confidence in our economy, the confidence of small business and the confidence of everyday Australians to be able to feed, clothe and house their families - and for that Mr Rudd you stand condemned.


I believe the ACCC has recommended, just regarding competition sort of between supermarket chains, that they change planning and zoning laws for supermarkets to increase competition, do you think that’s a good idea?


Well look, the report, from having a quick look at the report, the report describes competition in the retail grocery sector as being essential workable. I think most of us are quite open to reasonable things that will bring more competition into the sector. But what we will do is very carefully examine the report and find out if there is anything there at all that delivers on all the talk that Mr Rudd has actually given Australians and the things that we’re concerned about is the impact of unit pricing, particularly if it’s compulsory on small independent grocers and retailers. We will look carefully about the proposals to bring further competition into the market and we’re also interested to know about the relationship between food growers and wholesalers and the large retail chains.

But in the end, as we’ve learned from Mr Rudd over the last eight months, it’s all talk and no action. And Mr Rudd has a lot to answer for as far as grocery shoppers are concerned. And the idea of setting up another GroceryWatch and giving Australian shoppers a pair of binoculars, and sending them out into a supermarket with a shopping trolley with information which is dated by the time they get there - if Mr Rudd thinks that’s going to drop the price of groceries, then he’s more out of touch then we even thought.

Thanks very much.