Interview with Kerry O’Brien, 7.30 Report, ABC TV

Subject(s): Global Financial Crisis, Reserve Bank Governor, Malcolm Turnbull, US Trip:

O’BRIEN: Prime Minister Kevin Rudd, if there is a recurring phrase on the global financial crisis in the commentary from some of the world’s top financial minds, it’s “uncharted waters”. Do you agree that the world financial system is in uncharted waters and facing its biggest challenge since the Great Depression?

PM: Well Kerry, let me just say this. First, I won’t put a time measure on this Kerry, but certainly Kerry in my discussions with the Treasury and the Reserve Bank and APRA, and the ACCC, the ATO, ACOSS, ABS, AFL, ASIO, DFAT, NRL, DSD, ADF, DMO, RSPCA, ASADA, ANAO, ASEAN, ASX and ABBA, it’s quite clear Kerry that we are dealing with something here which we as Australian national economic regulators haven’t had to deal with for decades and the core of it of originates with toxic loans in the United States; but having said that Kerry, the situation has been worsened by the fact that loans have not been adequately securitised via a mechanism of assured non-transparent financial instruments spread tightly across the mortgage belt of this great world of ours, Earth, and that’s now oscillated for a period comprising at least a minimum of 12 months; and yada yada, keep cr-pping on, as you have seen, Kerry, it has affected one institution in the United States after another and so on.

O’BRIEN: Okay Mr Rudd, let’s assume your prattle is true, how can anyone, even the Governor of the Reserve Bank, say with any certainty what the possible impact or likely impact of the Wall Street meltdown is going to be on Australia?

PM: Well Kerry, I don’t accept your quasi intimidatory road map of scar tissue or your question either. But what I can say is this Kerry: because the Reserve Bank Governor is very mindful of the state of the balance sheets of Australia’s banks and equally very mindful of the rocket I’ll fire up his a-se if APRA’s balance sheets are not in sound order, therefore at times like this it’s important to be clear cut about where problems exist, but it’s equally important to be balanced about the underlying strengths and attributes, not just of the economy overall but of these very institutions based on what is agreed are an objective analysis of their balance sheets, to be certain in your mind that the advice you receive is not just sound and balanced but favourably transparent with what other institutions, financial regulators, the investment sector and the like, what they are expressing in terms of our current economic forecasts …

O’BRIEN: Let me interrupt your verbal hemorrhage if I may to ask you to what extent the US crisis will play in Australia.

PM: Well Kerry, I’ve said from day one, right back at the beginning of the year, at the dawn of time, the cradle of civilisation, that we are facing uncertain global economic times because of the global financial crisis. Now Kerry, the number of times I have reflected on this at the dispatch box in question time or in front of the mirror at the Lodge over the last nine months is probably, I don’t think I could count how many times I have done that, but let me try: one, two, three, four, five, six, seven, eight, nine, ten, eleven … [transcript temporarily delayed due to bad light — Ed] … But the key thing here Kerry is the health of the system, the health of the Australian banking and financial system, the health of the Australian finance system, the health of its balance sheets, the health of the regulators, the health of the health of the health of the health; and let me just freeform from here on, most financial regulatory systems around the world look at Australia and ask themselves this question – why don’t they have as robust a regulatory arrangement as we do in this country? And you know what the answer is Kerry? F-ck knows. Wayne Swan just found it in Peter Costello’s room when he moved in.

O’BRIEN: Putting your bullsh-t to one side Rudd, you and Mr Turnbull are circling each other at the moment like a couple of wary wrestlers if I could put it that way … Is it really so wise to be attacking Turnbull on the basis of his wealth. If his wealth is an issue, why isn’t yours?

PM: Well Kerry, these attacks are not coming from me. If Mr Albanese or Mr Tanner want to rubbish a self-made man, if they want to pour sh-t over someone who has risen from near poverty to a position of independent wealth, if they want to smear and besmirch someone just because they didn’t sponge off the state like a giant mammary to be sucked and licked and tickled at will, then that’s all part of the to and fro of the political conversation –

O’BRIEN: Sorry before you drivel any further, the Opposition has now set its sights on your penchant for overseas travel, pointing out that you will have been overseas for 50 days out of 300. Is another trip really necessary?

PM: Well the first thing to be said Kerry is that when I go overseas, I go there to lecture heads of state, presidents, prime ministers, premiers, secretaries, governors, ambassadors, screen writers. And the other thing is this: in going to New York I have the opportunity to lambast an empty United Nations with my unique take on climate change — pay the coal industry to make their sh-t looker whiter. But you know something? It is a vital element in an age of complete global interdependence – whether it’s on security, whether it’s on climate change, whether it’s on the state of the global economy, whether it’s self aggrandisement on a truly vainglorious measure — to be in a position where you can pick up the phone and deal with people and/or meet with them because they know who you are, well Kerry, that has to be self-fulfilling don’t you think?

O’BRIEN: Prime Minister we are out of time, thanks for admonishing me.

PM: Anytime Kerry, anytime.