Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Hansard source

I thank the shadow Treasurer for his question. Let me do two things: one, direct the House's attention to the complete paragraph that the shadow Treasurer quoted from; and, two, deal with his question about banks and passing interest rates on. I think it is very important that the House gets the full paragraph. I will refer to the full Reserve Bank statement and then I will refer to the paragraph that the shadow Treasurer referred to. The paragraph says:

Information about the Australian economy suggests moderate growth overall. The terms of trade have now peaked and will decline somewhat in the near term, but they remain very high.

In response, investment in the resources sector is picking up very strongly, with much more to come. Some related service sectors are enjoying better-than-average conditions. In other sectors, cautious behaviour by households and the high exchange rate have had a noticeable dampening effect. The unemployment rate has increased a little over recent months, though it remains close to 5%.

That paragraph of the Reserve Bank statement is pointing to the patchwork economy that the government talks about consistently. When you have a patchwork economy with resources steaming ahead and, as a result, the Australian dollar at historical high levels and sustained high levels, that does put pressure on other sectors of the economy that are trade exposed, including manufacturing. We have been talking about that for months and months and months—talking about the patchwork economy and how we are responding to it.

See this speech in context