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.