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INTERVIEW. THANK YOU FOR JOINING US THIS MORNING IN BEIJING. THE RBA -- LET'S GET THIS OUT OF THE WAY, THEY WILL NOT DO ANYTHING TODAY? >> I'M NOT EXPECTING SO, BUT WE WILL WAIT AND SEE. SO 1.5% WILL PROBABLY STAY ON HOLD. SOMETIME LATER THIS YEAR THEY NEED TO CUT. WHAT IS THE DILEMMA THAT THEY HAVE BECAUSE THEY STILL HAVE INFLATED PRICES IN THE PROPERTY MARKET, BUT ALSO SLUGGISHNESS ELSEWHERE IN THE ECONOMY? >> THE ECONOMY IS SLOWING DOWN. THE CLASSIC THEORY IS THAT THEY ARE GEARING FOR THE POSSIBILITY OF A CUTS. ON THE OTHER HAND, VERY INFLATED HEALTH PRICES AROUND THE EASTERN SEABOARD. REPORTER: NEARLY A MILLION DOLLAR MEDIAN HOUSE PRICE RIGHT NOW. >> RBA WOULD LOVE TO CUT FROM THE CORPORATE SECTOR AND CERTAIN GEOGRAPHIES. AND RAISED IN THE EAST, BUT THEY CAN'T DO THAT. THEY HAD DECIDED TO KEEP RATES ON HOLD AND USE MICRO FINANCIAL STRATEGIES IN THE HOUSING MARKET. WE HAVE SEEN IS PUT ON INVESTMENT PROPERTIES AND THEN INTEREST ONLY BORROWING TO TRY TO ACHIEVE THAT. REPORTER: THEY ARE TARGETING MOVES AS WELL? >> ONE OF THE TOOLS THE BANKS HAVE IS TO CHANGE THE PRICING. THEY INCREASE THE PRICE TO SLOW DOWN. WE ARE DOING A LITTLE BIT OF THE WORK FOR THE RBA ON HOUSING. REPORTER: IS THE BIGGEST RISK A CRASH IN PROPERTY? >> IN TERMS OF LARGEST EXPOSURE, YES. WE THINK IT IS A LARGE PROBABILITY, BUT IT IS SOMETHING THAT WE STRESS TESTS A LOT AND THINK ABOUT. THERE ARE VERY REAL DIFFERENCES IN THE AUSTRALIAN MARKET THAT SUGGEST THAT IS LIKELY. ON THE FACE OF IT, IT IS RISKY. REPORTER: ARE THE GOOD TIMES OVER FOR THE BANKS? YOU WANT TO MAKE YOURSELF MORE AGILE, BUT YOU HAVE MARGIN PRESSURES AND INTEREST IN THIS -- INTERVENTIONIST GOVERNMENTS AND A BANK LEVY THAT IS GOING TO BE IMPOSED, R THE GOOD TIMES OVER? >> THEY ARE GETTING COVERED. IT IS ALWAYS BEEN HARD WORK. WHAT HAS DRIVEN BANK EARNINGS OVER THE LAST 20 YEARS HAS BEEN AN INCREASE IN HOUSEHOLD LEVERAGE WHICH IS BEEN AFFORDED BECAUSE OF INTEREST RATES. THAT IS NOT GOING TO DRIVE THE FUTURE. THE FUTURE HAS TO BE DIFFERENT. WE HAVE BEEN GETTING READY FOR THAT FOR A LITTLE WHILE. IT IS ALL ABOUT CAPITAL EFFICIENCY AND PRODUCTIVITY. REPORTER: WHAT ABOUT THE BANK LEVY? YOU CALLED IT A REGRETTABLE POLICY, BUT AMONG THE BIG BANKS YOU HAVE BEEN HAVING A MORE CONCILIATORY TONE. ARE YOU MORE RESIGNED TO THE FACT THAT IT IS GOING TO HAPPEN? >> ALL PARLIAMENT SUPPORTED. WE DO NOT THINK IT IS GOOD POLICY AND THINK IT WILL HAVE UNINTENDED CONSEQUENCES. WE HAVE SEEN VERY LITTLE VALUE AND BLEEDING ABOUT IT. WE SHOULD BE GETTING ON WITH THE GOVERNMENT WORKING ON HOW TO BEST IMPLEMENT THIS TO AVOID THOSE UNINTENDED CONSEQUENCES. REPORTER: WHAT ABOUT FURTHER BANK LEVIES? >> WE ARE WORRIED LESS ABOUT THE FINANCIAL IMPLICATION OF THIS LEVY, BUT MORE ABOUT WHAT IT SAYS ABOUT GOVERNMENT POLICY BETWEEN GOVERNMENT AND INDUSTRY IN GENERAL PARTICULARLY AROUND THE BANKS. WE HAVE SEEN THE U.K. IN PARTICULAR START ONE WAY AND THEN CHANGE FORM OVERTIME. THAT IS WHERE PEOPLE ARE WORRIED ABOUT. REPORTER: ARE WE HEADED TOWARD A PROLONGED SLOWER GROWTH OR NEGATIVE GROWTH ENVIRONMENT IN AUSTRALIA? YOU'RE NOT HAD DO SCORED ON QUARTER OF NEGATIVE GROWTH RECESSION SINCE THE EARLY 1990'S. THIS IS SOMETHING THAT THE AVERAGE PERSON IN AUSTRALIA IS GOING TO HAVE TO GET USED TO AND THE INVESTORS IN THE BANKS WILL HAVE TO GET USED TO LOWER PROFITS THAT THE BANK AS WELL? >> THE AUSTRALIAN SYSTEM HAS DONE A GOOD JOB OF TRANSITIONING FROM MASSIVE MINING INVESTMENT INTO A CONSTRUCTION LED BOOM BASED ON STRONG MIGRATION INTO THE COUNTRY. NOW THAT HAS TO COME TO AN END. GROWTH WILL BE MUCH HARDER TO COME BY. WE HAVE BEEN USED TO GOOD GROWTH FOR 30 YEARS. LOW GROWTH FEELS LIKE A PER SESSION -- RECESSION TO A LOT OF OUR CONSUMERS. THEY ARE ALREADY STARTING TO ACT DIFFERENTLY ABOUT FLAT GROWTH. REPORTER: YOU BELIEVE THIS COMMODITY CYCLE IS OVER? >> THE COMMODITY CYCLE IS NOT MY JOB TO PREDICT. IT CAN BE VOLATILE. IT HAS BEEN AN ENORMOUS BENEFIT TO AUSTRALIA. WE SHOULD NOT COUNT ON ANOTHER RUN UP ON COMMODITY PRICES FOR THE FUTURE. REPORTER: YOU SOLD OFF A FINANCE AND TO A GROUP, AND SO THE ANOTHER STATE. ALSO 38% OF A BANK IN INDONESIA AND AMM B HOLDINGS IN MALAYSIA, WHAT IS NEXT? >> WE HAVE ANOTHER THINK WE ARE LOOKING AT, RESHAPING WEALTH BUSINESS IN AUSTRALIA. THE REASON FOR B HOLDINGS IN MALAYSIA, WHAT IS NEXT? THOSE BEST -- PRETTY SMALL BUSINESS. IN THE LOWER GROWTH ENVIRONMENT YOU HAVE TO BE ON YOUR GAME. WE CAN PICK A FEW THINGS AND DO THEM WELL. IT IS MUCH BETTER TO HAVE INTELLECTUAL AND FINANCIAL RESOURCES FOCUSED ON OUR CORE BUSINESSES. IT IS TIME THAT THEY MOVE ON. REPORTER: LET'S TALK ABOUT THE AMMB POSSIBLE SALE. 23.9% STAKE. THERE ARE A LOT OF LOOSE STRINGS THAT COULD JEOPARDIZE IT. ARE YOU CONFIDENT THAT THE SALE COULD GO THROUGH AND THAT THE EVALUATION THAT SOME HAVE SAID? >> WE ARE HOPEFUL. WE DO NOT KNOW ALL THE DETAILS. WE ARE A SHAREHOLDER. THE THING ABOUT MALAYSIA IS PARTIES SEEK APPROVAL TO NEGOTIATE. THAT APPROVAL HAS BEEN GIVEN. NOW THEY SIT DOWN AND NAIL OUT A DEAL AND WILL BRING IT TO SHAREHOLDERS. WE DON'T REALLY KNOW THE DETAILS. I THINK IT IS A GOOD THING FOR THEM TO MOVE FORWARD. THEY SHOULD SEEK SCALE IN A