November RBA decision: Joe Hockey Doorstop
01/11/11
E&OE…………………………………………………………………………………
JOE HOCKEY:
The Coalition obviously welcomes the announcement by the Reserve Bank today that it will go into the market and reduce the cash rate by 25 basis points. This is good news for Australian households and it’s desperately needed by Australian households. We call on all the financial institutions to deliver in full the 25 basis point reduction. Some have already done that, obviously we expect others to do the same. For everyday Australians this is much needed relief.
Wayne Swan misled the Australian people in parliament when he claimed that the Reserve Bank referred to the Government’s fiscal policy as one of the reasons for the reduction in interest rates. He was dead wrong. In the six paragraph statement from the Reserve Bank there was not one mention of government action other than the Reserve Bank delayed taking into consideration the inflationary impact of the carbon tax. So whilst the Government will claim credit for this, they are dead wrong and the Reserve Bank says that effectively because the Reserve Bank is saying that the reason why they had been able to reduce interest rates, or had to reduce interest rates, was because we have falling consumer confidence in Australia and the non-resources sector of the economy is certainly not growing at the pace that was expected.
So we’ve got a slower economy, we’ve got less consumer confidence, the Reserve Bank had to act and it’s got absolutely nothing to do with the Government other than the fact that the Government is contributing to diminishing confidence in the Australian economy and of course with the introduction of the carbon tax, it’s going to make the cost of living for Australians greater into the future.
JOURNALIST:
Do you think this means that the Reserve will have to act on at least a few more occasions?
JOE HOCKEY:
Well that is up to the Reserve Bank. I suspect that this is going to be only ten minutes of economic sunshine for Australian households because the obvious factor is not in play and that is the Government is doing nothing to lift productivity in Australia and you’ve got the carbon tax coming down the pipeline which will have a negative impact on not only growth but on consumer confidence.
JOURNALIST:
Mr Hockey when was the first you heard that Qantas was considering the grounding of planes?
JOE HOCKEY:
Quarter to five on Saturday.
JOURNALIST:
No one from Qantas spoke to you or your office about the possibility of grounding planes earlier than that?
JOE HOCKEY:
No.
Qantas have been saying repeatedly to everyone around this building, as Anthony Albanese pointed out, they’ve been saying that if the industrial action continues they may need to ground their fleet. The fact is that the Government didn’t respond to it. They didn’t respond to those cries for help from Qantas. It was I think the 14th of October when I first called for Government intervention. As a former Tourism Minister, as a former Minister for Industrial Relations, it was patently clear that Qantas was bleeding. Tourism operators were saying to me that they were moving their customers away from Qantas to other airlines because of the rhetoric of the union leaders and what appeared to be wildcat stoppages.
Quite frankly I ask everyone to reflect on history here over the last few weeks. The distress has been palpable within Qantas. Now their decision to immediately ground their planes was conveyed to the Government well before anyone in the Opposition.
JOURNALIST:
But how did you come to know that there was a possibility that they were considering grounding planes? How did you get that information?
JOE HOCKEY:
Qantas were telling everybody. Qantas told me, like others, that there was a possibility that if industrial action continued and got worse, and they said that to Anthony Albanese as well, they said it to members of the Government. I mean Qantas has been in this building every sitting week for months warning that if industrial relations deteriorated, if the unions continued to be militant, it was going to affect their brand, it was going to affect their company and surely it was obvious that if it deteriorated they would take that action. The issue is why didn’t the Government react to it. And I called for the Government to react to the increasing cries from Qantas and from passengers and the tourism industry about the distress the airline was in because of industrial action.
JOURNALIST:
Do you think that lenders can use the European crisis as an excuse not to reduce their rates or not to pass on the full savings?
JOE HOCKEY:
Well it depends on the banks’ exposures to the European credit markets and also some other markets but from what the individual banks, major banks, have told me there exposure is very limited. Bear in mind they also have had a significant increase in deposits from Australians over the last few months. Add that together with the fact that on this day last year, Melbourne Cup day, banks like the Commonwealth Bank went well beyond the Reserve Bank increase. So there’s no excuse for the banks not to pass on the full interest rate cut.