TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

Parliament House, Canberra

Thursday, 26 June 2003

8.50 am

SUBJECTS: Interest Rates, Economic Growth

TREASURER:

Well overnight the US Federal Reserve cut interest rates in the United

States by 25 basis points, 0.25 per cent. We welcome that, we think that

will provide additional stimulus to the American economy which has been

very sluggish, and whilst the American economy is sluggish and world

growth is down, that will affect all of the countries of the world, including

Australia. We will find it harder in a period of sluggish global growth

for our exports and until we see a return to sustainable growth by the

American economy, which will fire global growth, it is going to be hard

for exporters around the world. Now, there aren’t many economies

in the world that are growing like Australia is, but what would help

Australia would be if the rest of the world picked up, and if we saw

additional momentum. So we welcome the fact that we are now getting this

stimulus coming out of the United States together with interest rate

cuts and fiscal stimulus, we look forward to a return to growth in the

United States.

JOURNALIST:

Will this mean anything for Australian interest rates?

TREASURER:

Well of course we set Australian interest rates for Australian conditions

and we set it with a clear inflation target in mind. But the fact that

the United States economy is weak, means that it has been harder for

Australia in recent months and the fact that the American authorities

are now reacting and trying to stimulate the American economy will be

a positive for Australia.

JOURNALIST:

So that should help economic growth in Australia?

TREASURER:

Well if you could get a stronger American economy, and bear this in mind

it is very sluggish, unemployment in America is higher than it is in

Australia, growth in America is lower than it is in Australia, America’s

economic prospects are weaker than they are in Australia, but if you

can stimulate the American economy with the effect that that will have

on the global economy, that will be a positive for Australia. Thanks.