Transcripts

DOORSTOP INTERVIEW SYDNEY 3.30PM TUESDAY 6 OCTOBER 2009

6th October 2009

DOORSTOP INTERVIEW

SYDNEY

3.30PM TUESDAY 6 OCTOBER 2009

E&OE………………………………………………………………………………………

Subjects: RBA’s decision to increase the cash rate today, ETS, Kokoda track

JOE HOCKEY:

Australians have just received their first bill for the Rudd government’s reckless spending.

For a family with a $400,000 home loan, this represents an increase in mortgage repayments of around $1,000 a year. That’s $1,000 a year after tax – there goes the $900 cheque that you received from the Rudd government, and there’s more to come.

This will have a profound impact on any Australian with a credit card, with a home loan, with a business loan. It will have a profound impact on many Australian small businesses that have done it tough over the last few months.  And they haven’t received the full benefit of the decreases in interest rates, and the banks have not passed on those decreases in full.

For Australia’s two million small businesses, this is the beginning of a very long and painful journey.  It will be harder to get credit, it will be more expensive, and it’s those small businesses that are the backbone of employment.  They are, in many ways, the backbone of the Australian economy and they will feel it most desperately.

Wayne Swan and Kevin Rudd were crowing about how fiscal and monetary policy would work together. Well now we have a situation where the government is continuing with its reckless level of high spending whilst the Reserve Bank is increasing interest rates in the opposite direction.

This says everything about the government’s failure to make its deeds work with its rhetoric.

The government was quick to blame the former Coalition government for all the increases in interest rates. Now it has to accept responsibility that its reckless and at times wasteful spending is putting upward pressure on interest rates and today the Reserve Bank responded.

This is also going to put upward pressure on the Australian dollar at a time when our farmers and our exporters can least afford it. This will have a significant impact on the tourism industry which is a massive employer around Australia.  Because not only will their costs of borrowing go up but also the upward pressure on the Australian dollar will have an impact on the Australian tourism industry and other Australian exporters of course, including agriculture, education and a range of others.

The Rudd government was always quick to claim credit for decreases in interest rates, now it has to accept, sadly, responsibility for increases in interest rates. And its reckless spending has had a direct impact on the interest rate increase ahead of market expectations today.

JOURNALIST:

Craig James and others said this morning that at 3-odd per cent, the only way is up. Is that correct" I mean, we’re way higher than America anyway?

JOE HOCKEY:

Well it appears as though Australia is the first of the G20 nations to start increasing interest rates and there are clear indications that they’ll continue to increase. You see, the Australian government had the third biggest package in the OECD. It spent more money than any other nation in a comparable situation, and Australia is now paying a price.

This is the first bill to come home to Australian families and small businesses, as a result of the government’s reckless spending.

JOURNALIST:

Isn’t a result of the fact that Australia didn’t go into recession like every other country did?

JOE HOCKEY:

Well the fact is that the government went to extreme levels of expenditure. The government is continuing with what it calls its ‘emergency levels’ of expenditure. Even over the next two or three years the government is maintaining its expected levels of expenditure at the last Budget. And those levels are extremely high and it’s reckless expenditure, Australians are now today receiving the first bill for the $900 stimulus cheques and there’s more to come.

JOURNALIST:

[inaudible]

JOE HOCKEY:

We’re still arguing, we’re still saying the government has spent too much money. It is continuing to spend too much money because the government’s spending is no longer economic, it is political.  And the Reserve Bank said...

JOURNALIST:

Banks are often reluctant to pass on interest rate cuts. What do you expect will be the news from the banks now that they’ve been given this rise?

JOE HOCKEY:

Well the government has given… Wayne Swan today gave the banks a blank cheque to increase interest rates at the full rate. Now Australians did not receive the benefit, the full benefit, on the way down, but today Wayne Swan gave them the blank cheque to increase interest rates to the full extent.

And I would say to the government, now that we have less competition in banking, now that we have an increase in interest rates, the government needs to do something about its reckless spending, to start to put some downward pressure on interest rates, rather than upward pressure on interest rates.

JOURNALIST:

[inaudible]

JOE HOCKEY:

Well that’s a matter for the Reserve Bank. The Coalition has been warning that the bill would come for those $900 cheques.  That the bill would come for all those school buildings.  That the bill would come for $3 billion of pink batts. Today the bill has been sheeted home to every Australian family, every Australian small business. Ultimately all the spending has to come to an end, but the government is continuing with it and that will continue to put upward pressure on interest rates.

JOURNALIST:

Mr Turnbull has called a special Party meeting for the 18^th  - on a Sunday, no less. Why is that, and what do you think will be achieved?

JOE HOCKEY:

Well, it’s an opportunity for people to have their say. It’s a good thing. On the one hand, you’re criticised for not giving people an opportunity to have a say, and on the other hand you’re getting criticised for holding a special Party meeting outside of Parliamentary Sitting so that everyone can have their say. You’re damned if you do, and you’re damned if you don’t.

JOURNALIST:

[inaudible]

JOE HOCKEY:

I’m sure they’ll back the Leader.

JOURNALIST:

Barry O’Farrell said today that he is worried that infighting in the Federal Liberal Party will affect his chances at the next state election in New South Wales.  What do you make of those comments?

JOE HOCKEY:

I would say that nothing will save the Rees government from defeat at the next election.  Prophetic words!

JOURNALIST:

Just to finish, you’ve walked Kokoda. Is there any pressure that the Australian government can bring to bear to stop operators having people walk who shouldn’t be?

JOE HOCKEY:

Well, it is reckless of operators of the Kokoda Track to allow people to undertake the walk without a full medical check. It is reckless for insurers to provide insurance to those operators and those walkers if they have not had a full medical check. And I would say to Australians, it is no stroll in the park, Kokoda. It is damn hard. You need to make sure that you are fit and medically prepared for what is an arduous and demanding trek.

[Ends]