JOURNALIST: How are you and Government leaders planning to cushion the effects on all Australians of the global financial crisis. Why doesn't the public have a right to expect the banks do what Malcolm Turnbull said to do and pass on all the next interest rate cuts?
PM: The first that we have as responsibility in Government is to ensure strength of the Australian economy and the strength and stability of the Australian financial system.
This is fundamental. It is fundamental to everything and what has been pleasing and good about the discussion with colleagues today is their collective commitment for everyone to do their part.
Part of the future lies in the confidence which comes also to the nation through an integrated program of nation building, investment in infrastructure, investment in economic infrastructure and I don't know a single Premier or a Chief Minister around this table who couldn't identify for me immediately two of three major infrastructure needs in their respective States or Territories which need investment.
We are a nation committed to infrastructure, we are a Government committed to nation building and I think that is going to be very important part of our economic message to the nation in these globally unsettling times.
And the second part of your questions Geoff, it goes to the stability of the financial system. You have got two alternatives here.
One is you can respond to the advice of the financial regulators and the Reserve Bank has as early as last week was saying that the cost of capital for our lending institutions has been directly affected by the global financial crisis and you can respond to that. That's why we have said that we want to see a maximum pass through of any reduction in official interest rates to consumers. But we also want to make sure that we maintain the stability of the Australian financial system consistent with the advice of the regulators.
So either you can act responsibly in response to the advice of the regulators or you can choose to play short term populist politics.
The Government that I lead will take the hard decisions in the interests of the long term stability of our country's financial system. Now if that's politically unpopular on the way through so be it. It is the right thing to do .
JOURNALIST: (inaudible)
PM: The challenge is also to look 3, 6, 9, 12 months ahead. We still do not know for example what will happen with the passage of the proposal which is currently before the United States congress. This morning Australian time and very early Perth time, I was speaking to the House Majority Leader in the United States, Steny Hoyer, who is a bloke I have gotten to know in recent times, about how the legislation will progress through the House of Representatives.
We are still up for a debate in the United States. It is tough, it is tough politically. I certainly put to him the view of a friend and ally of United States of the importance of both Houses of Congress to pass an important measure to stabilise an important financial system, there and therefore globally.
What I am saying to you is, we do not know, the final detail of the passage of that proposal of the United States Congress. We do not know its long term impact. And therefore the prudent course of action is to be looking ahead 3, 6, 9, 12 months later and to ensure that we are responding intelligently and appropriately to the advice of the regulators and as I said as late as last week who were advising us about the cost of capital for Australian institutions now and into the future and to make appropriate and sensible preparations for that. My responsibility is to do everything sensible to maintain the stability of the Australian financial system and I intend to do so.
JOURNALIST: The Premiers all came here today to say that they would like to see fast tracking of your infrastructure funding. You went to the election with some very clear policies about process involved (inaudible). Can you guarantee that even though you bought forward this schedules that those standards will stay in place?
PM: Absolutely. And the reason is that Infrastructure Australia has been established under national legislation with an advisory broad and for the purposes of exercising complete probity of analysis, cost benefit analysis of every infrastructure proposal put to it.
Why? It is taxpayers' money and it is expensive. It is a lot of money and we only intend to use this money wisely investing and dealing with the infrastructure bottlenecks of the future.
Bringing forward an interim report is an important measure. But you know something it will not lead in any way to any compromise to the processes associated with Infrastructure Australia.
Projects will be considered on their merits and will be subject to the due diligence of Infrastructure Australia.
JOURNALIST: (inaudible)
PM: No, laudable as it is, not maybe Matthew.
JOURNALIST: (inaudible)
PM: You know something the job of politics is to get it right at both levels. The Premiers and Chief Ministers have been making good and strong points about the nation building challenges which we face and particularly at this time of stresses in the global economy.
The same time you can deal intelligently and flexibly in response while not compromising in the integrity of your assessment process.
This is a lot of taxpayers' money we are talking about $20 billion. It is not going to be thrown up against the wall, let me tell you. It is going to be used wisely, and therefore that is the process we have invested in.
JOURNALIST: (inaudible)
BLIGH: You would get at least 8 arguments on that.
BRUMBY: There are a lot of engine rooms around the place.
PM: Well some 4 cylinders, some 6, anyway (inaudible). Can I say I have said every time I've come to the West, and I say this as a loyal son of the great state of Queensland, is the figures speak for themselves in the West. In mean in West about a third of the nation's exports come from here. Am I right Colin?
BARNETT: A little more.
PM: Thank you for that.
And therefore the commands respect. I have said when I was Leader of the Opposition, I have said so as Prime Minister, and I have been many, many times in the last 18 months that the national Government needs to invest more in this State's infrastructure needs into the future. Why? It is in the national interest to do so.
So much of the country's wealth comes out of this State. But for the other parts of the country which we will respond to in national interest terms, infrastructure needs are far, wide and broad. The challenge is to get it right. We discussed today the scope of the Building Australia Fund. Our initial investment is $20 billion and subject to future budgets we will be investing in more. We intend to be long term partners with the States and Territories in nation building.
You know it was a term which sort of became unfashionable for a while. We are about to bring it right back into fashion, it is the right thing to do.
JOURNALIST: (inaudible) there could be a $10 billion impact on the upcoming budget because of the financial crisis. Those figures, is that true?
PM: That was in the Oz, it was on the front page. I have said before at press conferences in Canberra, is that if you have got a global financial crisis and it has been unfolding for some time it is going to global economic growth to be ratcheted back. That's true, it's both attested to by the IMF and by the World Bank and by others and that has therefore led to revised growth projections for Australia. That means revenues (inaudible) be down as well. That is clear. On the quantum we are working our way through that.
And when the numbers are good and ready, I am sure you will be maybe not the first to know, but I am sure you will know soon after that.
JOURNALIST: Mr Barnett your first COAG, the only Liberal Premier. (Inaudible) infrastructure (inaudible) are things moving fast enough as far as you're concerned?
BARNETT: Well I was happy with yesterday and today's discussions as I said, particularly with the Prime Minister. Western Australian will be putting in a revised submission on what we believe are in this state's and the nations best interest. And we'll endeavour to get that to Canberra within the next two to three weeks.
JOURNALIST: (inaudible) Mr Brumby are you concerned that the impact of the financial crisis (inaudible) will be that impact on PPPs and the ability to secure finance from the private sector, and if that happens, will the Commonwealth money be enough to bridge that gap?
BRUMBY: Well, what I've said about that is the global financial conditions will make it a more difficult environment for PPPs than would otherwise have been the case. Nevertheless, I expect that there will be a significant number of PPPs in Victoria and across Australia that will be fully funded over the next few years.
But what I've said more generally, and what has been echoed today in the discussions we've had and in the communiqué, is that in the current environment, where there will be less available credit around the world for capital projects there is a bigger and more important role for Government.
And that's what we discussed today, and I couldn't have been happier with the discussions we had today. The fact that subject, of course, and fully consistent with proper processes as the PM has said, we're going to see the interim report from Infrastructure Australia. That will mean more money for more capital works can hit the ground sooner than would otherwise have been the case. And that's exactly what we need in terms of stimulating activity and maintaining strong economic conditions going forward.
So I think the steps we've taken, plus the agreement today on national PPP guidelines, is exactly the right thing for governments to be doing, and will create that better investment environment, albeit a more difficult environment than it was three months or three years ago.
JOURNALIST: (inaudible) do you now think our economy needs the shot in the arm that big government infrastructure spending will give it (inaudible)
PM: The nation has for a long time needed infrastructure bottlenecks to be dealt with. The Reserve Bank has been saying that for a long time. As I've said repeatedly in parliament in Canberra, there has been up to 20 warnings about infrastructure bottlenecks across the nation. That is a continuing need.
What I've also said in recent times, and again in the parliament in Canberra, is that what's our response to the global financial crisis? One, maintaining a policy of a strong financial management through a strong Budget surplus to provide us with a buffer for the future. But two, through that also to implement our long term strategy of nation building - a $76 billion plan for nation building. I've said that before and I'll say it again.
These two needs are entirely compatible. And, I'm determined to get on with the job. And it's been a good discussion with the Premiers and Chief Ministers today on that.
RANN: Can I just take that question from the other states, to say that infrastructure. I mean let's just remember, and I've been at COAG meetings now for more than six and a half years, the previous Federal Government wasn't in the game of infrastructure. In fact, we've already seen a role out of significant infrastructure in relation to the River Murray's needs and the re-engineering of the river. And I think what we're talking about now is a real commitment. I mean, my state has doubled the infrastructure spend and with PPPs which we've committed to, effectively tripling the infrastructure spend. In the past, we've had state governments that were spending more on infrastructure than the entire Federal Government, so we welcome what is happening with infrastructure now. We welcome the fact that we're going to get a report by the end of this year so we can get cracking.
But it's in stark contrast to what we've had over the last six and a half years, or twelve years, where infrastructure couldn't be discussed at COAG meetings.
JOURNALIST: (inaudible)
PM: No, what you'll see in the communiqué today and I'm sorry it is not ready for you, and I went through a summary of what we did today which was not comprehensive it's partial. One of the things that we've done today, and people have actively contributed to this, is the new intergovernmental agreement on early childhood education for indigenous Australians.
That's consistent with a commitment that I gave as Prime Minister at the time of the national apology about closing the gap.
That's led to detailed work with the states and territories over the last several months which has brought together that intergovernmental agreement which I've signed today, or I'm about to sign today, but the communiqué will go through that.
Colin Barnett though in a discussion with me last night and again in comments this morning, triggered some thinking on my part about how do we take that part of closing the gap into, frankly a much broader national agenda. And that is, states, territories and the private and community sector marching to the beat of the same drum on a complete response to the challenge of indigenous Australia. And that will be informed, also, by the report that we'll receive soon on the experience of the NT intervention.
JOURNALIST: Another major problem facing us all is the price of petrol (inaudible).
PM: We'll sort that through really quickly - I wouldn't worry too much about that. The key thing is having someone in the saddle. We've got one. In contrast to previous administrations when no such entity existed. This is right, it helps, it helps in terms of maximising consumer power together with other measures. And while we're here in Western Australia, I draw attention to the fact that FuelWatch has operated successfully in this state since the year 2000 I think, Colin, 2001, introduced by the then Liberal Government. We sought to do that nationally, as you know.
These are all measures designed to increase consumer power in what is a very difficult cost burden for families across the country, and that is the price of petrol.
JOURNALIST: (Inaudible)
PM: I'm a big fan of the LNG industry, always have been, always will be. I've seen a lot of their projects, and it's exciting to see what's happened on the North-West Shelf and where it can all go to into the future.
Second point, though, is on the specific impact of the Carbon Pollution Reduction Scheme on LNG, as I've said already, we'll sort through in our consultations with industry, precisely how LNG and other industries will be dealt with - strongly affected industries, emissions intensive trade exposed sectors of the economy. This is a very comprehensive exercise that the Commonwealth is engaged in at the moment. It's not easy, it's hard, it's complicated. But you know something, it's necessary to do in the national interest and we are being thorough about it. And I draw your attention to the most recent report by Ross Garnaut, which again continues to inform the debate.
I think we'd better zip, folks, because I know a few of the colleagues have got to start zipping themselves to other parts of the country.
Thank you, thanks very much.