February retail trade figures; economy; petrol prices; National Australia Bank; stem cell research

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Appointments to the Productivity Commission
March 26, 2002
Budget Priority; Defence; Border Protection
April 7, 2002
Appointments to the Productivity Commission
March 26, 2002
Budget Priority; Defence; Border Protection
April 7, 2002

February retail trade figures; economy; petrol prices; National Australia Bank; stem cell research


Thursday, 4 April 2002
12 noon


SUBJECTS: February retail trade figures; economy; petrol prices; National

Australia Bank; stem cell research


Today’s retail trade figures showed a solid growth in retail trade in the month

of February of 0.3 per cent. It is welcome news because it came on the back

of very strong growth in January of about 1.4, but it is a solid result and

it is consistent with an economy which is growing in a solid way. I think there

has been a tendency in recent days to engage in some irrational exuberance in

relation to the economy. We are still in a very difficult world situation. The

Australian economy is growing faster than every other developed economy in the

world, but this is still a difficult world environment and anybody who thinks

that it is sunny uplands all the way home from now on, would be mistaken. Australia

is growing solidly in terms of retail trade, there is a lot of consumer confidence

in the Australian economy supported by low interest rates and low tax rates.

But the international environment is still a very sticky one, and it will take

considerable care in economic management over the next twelve months.


Does it validate a possible interest rate cut, interest rate rise next month?


Well, I have noticed a lot of the press commentary, I think, over recent months

has swung from the pendulum of despair to the pendulum of exuberance in a very

short space of time.

The international environment is a very difficult environment – a Japanese

recession, the United States very weak, Europe very weak. It is true Australia

is the best performing economy in the developed world but you do not want to

think we are out of the woods, it is still a difficult environment. Now, the

good thing about today’s figures are that they show that retail trade grew in

February after a very good growth in January, but it is solid, it is not runaway,

it is solid growth, the kind of solid growth you would be hoping for in this

difficult international environment.


Treasurer, how do you defend this unprecedented commentary on interest rates

by senior Government Members such as yourself?


Well, I have not been commenting on interest rates.


Well you seem to be giving a very clear signal to the Reserve Bank that things

aren’t ready yet for an interest rate rise?


No. I comment on the economy because I am the Treasurer of Australia, that

is part of my job.


Mr Costello, are you worried about any, the world economy worsening as a result

of the Middle East crisis, especially if it starts influencing petrol prices?


Look, the worst thing about the Middle East is the killing and carnage and

I hope that a ceasefire can be put in place, and I hope that the killing and

carnage can come to an end. The secondary consideration is the economic fall-out.

We learnt, not just in Australia but around the world, we learnt in 2001, that

rising oil prices dampened consumer sentiment and slowed growth and contributed

to a world slow-down. That is what we learnt in, as recently as 2001, and you

have got to remember that rising oil prices are not good for economic growth.

We would prefer to see more stable, moderate oil prices.


What do you make of the National Australia Bank’s decision to close some of

its rural branches?


I haven’t seen its announcement. I thought it was not even making one until

next week so I would have to…


It’s signalled its intentions.


…well I would have to see what was involved before I could comment on that.


Treasurer, can I ask you about stem cell research and your position on that?


Well, I am against cloning human beings and creating embryos for the purposes

of research. But, the issue that has come up at present, is, in relation to

already-created embryos which are going to be destroyed anyway, whether or not

research can be done which holds out the hope of alleviating pain and suffering

and bringing possible cures to intractable diseases. And, I think in relation

to that research, in relation to embryos that would be destroyed in any event,

that the possibility for healing sickness is such a great opportunity that I

can see a case for doing that in those limited and controlled circumstances.


What about a conscience vote?


I think this is something where there should be a conscience vote, yes. There

will be different views in relation to this and I think people have to follow

their own conscience. My conscience says it would be wrong to clone, or it would

be wrong to create embryos for that purpose. But you are talking about embryos

that have been created and would be destroyed in any event, and I think the

possibility that research could save lives or alleviate fatal diseases, is something

that we should reach out and in limited, under limited controls we should try

and take.

Okay, thanks.