Ms JULIE BISHOP (2:22 PM) —My question is to the Treasurer. Why has the government had three different positions on short selling in the last three days?

Mr SWAN (Treasurer) —I thank the member for Curtin for her question. I congratulate her on her appointment. I look forward to a constructive dialogue and debate about these matters which are so important to the economic health of the country. The parliament is the appropriate place for that. Let us just deal with short selling. Was there any legislation on short selling in 12 years from that side of the House? No.

An opposition member—There was no need for it.

Mr SWAN —There was no need for it? Okay. That is good. I will just take them through this issue. We did say earlier in the year that we would move to legislate for the disclosure of covered short selling. The government has prepared a bill in that area. But, as everybody in the world knows, financial markets melted down last week. In response to that, governments around the globe moved to change their position on short selling. They moved to change their position on short selling because of the carnage that was going on in stock markets in an environment that was so destabilising it had lost touch with the economic fundamentals of many companies. So there was a very strong case at the end of last week for substantial action on short selling.

ASIC, the independent regulator, determined late on Friday that they would take some further action. What happened after the market closed in Australia over the weekend was that further decisions were taken by other governments internationally. A further decision was taken in the United States by the SEC. A further decision was taken in Canada, and in at least three other countries decisions were taken. So over the weekend I conferred with all of our regulators. In fact, on Friday afternoon there was a meeting of the Council of Financial Regulators. On Friday afternoon and through the weekend I conferred with our regulators on this position and I conferred with people right across the financial services sector, because the ban on short selling in various forms by all of those other countries would have exposed our market first thing on Monday morning to a wall of funding that could have really had a detrimental impact on many, many reputable Australian companies.

We on this side of the House make no apology for the decision of our independent regulator to ban short selling—a decision they announced late yesterday afternoon. It was a very important decision in the history of this country. There is a case for short selling, but there is not a case for short selling in the market environment in which we now find ourselves domestically and around the globe. We are a small market and it was simply not possible for us to remain open to short selling when every other market in the world had closed. What occurred was that the regulator met again and took an independent decision on Sunday afternoon, announced it and it has been applied from this morning. This is yet another example of our regulators being up to the mark and acting to protect our national interest. I would have thought those on that side of the House really would have understood how important this decision is and how it deserves bipartisan support.