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Transcript of doorstop interview: 15 January 2008: blame game; interest rates; Public Service cuts.



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Christma

State Di Australia New Sou Northern Queensla South Au Tasmani Victoria Western

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Tue, 15th January 2008

TURNBULL DOORSTOP - BLAME GAME, INTEREST RATES, PUBLIC SERVICE CUTS The Hon Malcolm Turnbull MP Shadow Treasurer

E&OE

SHADOW TREASURER:

The challenge for Mr Rudd is to stop blaming the previous Government and start governing. He told us that when he was Prime Minister the buck would stop with him. We’ve heard no plans for keeping the economy strong. We’ve seen his new Treasurer, Wayne Swan, drop the ball and be treated like an utter mug by the big banks; their welcome note to Wayne Swan was to put their interest rates up, without any movement from the Reserve Bank.

Mr Rudd went to a meeting with banking bureaucrats today at the Reserve Bank and emerged with nothing to say. The people he should be talking to are the bank bosses at the big banks that have put the rates up. He should be doing what his Treasurer had failed to do, demanding a detailed explanation of why those rate rises are justified. If Wayne Swan had done that at the outset those rises probably wouldn’t have occurred and if they had occurred they would have been a lot less than they have been. So they fumbled the ball already and Australian borrowers, Australian homebuyers are paying the price.

JOURNALIST:

Last week you said on PM that you would meet with the banks, have you met with them?

SHADOW TREASURER:

Yes I have. I have met…I have spoken to, or met with all of the four banks, the big banks. I have had some detailed discussions with them. I have urged all of them to make their reasons, their claimed reasons for putting rates up public. Now Wayne Swan should be doing that too. If he did it as Treasurer, he has the moral authority that Peter Costello used to great effect. Peter Costello really put a lot of pressure on the banks to keep interest rates low. He wasn’t afraid to do that, he wasn’t afraid of being called a bully by the banks, but Australian homebuyers benefited. Now Wayne Swan has been treated like a mug, they have taken advantage of his inexperience and he hasn’t put the pressure on the banks that they need.

You see, if the banks are obliged to justify this rate rise they will be much more cautious about making it in the first place and in addition if they justify it, then when financial condition overseas improve, then we will know that they’ll have to reduce their rates. But it is like a black box. They said, ‘oh there is all this pressure overseas and we have got to put our rates up.’ But they haven’t demonstrated precisely how those international financial events have affected their cost of borrowing and Wayne Swan is the man who has the ability, the moral authority to oblige them to make that justification and he has failed to do so.

JOURNALIST:

What do you think about cuts to the Department of Foreign Affairs?

SHADOW TREASURER:

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