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Tuesday, 21 October 2008
Page: 9725


Mr TRUSS (Leader of the Nationals) (4:37 PM) —What we have seen over the last couple of days is the obvious fact that this government has no capacity to manage an economy. Whether they be in good times or bad, Labor inevitably fail when it comes to economic management. Like every other Labor government around Australia and like its predecessors, this Labor government cannot manage an economy in good times or in bad. Today we have seen the extraordinary situation of the Prime Minister’s pathetic attempt to explain away the Reserve Bank’s concerns about the government’s guarantee on bank deposits.

When the government announced its stimulus package they verballed the Reserve Bank. The government said they had the Reserve Bank’s support for the package in its detail, including the fact that the package was uncapped. They claimed that this had the support of the Reserve Bank and the regulators, but it is apparent from what we have seen in today’s Australian that that was not true. That was never true. Indeed, the Reserve Bank has made it clear that their clear advice was ignored by the government. When they made this decision, in their mad rush to announce a guarantee for all deposits in Australia on 12 October, they completely ignored the concerns of the Reserve Bank. And when this came out into the open today, did the Prime Minister take it on the chin? Did the Prime Minister acknowledge that he had misled the Australian people? After asking the people to trust him and assuring the Australian people that he wanted to take them into his confidence, we found that he had not told them the truth. He told them that the regulators approved this package when clearly they did not.

Now, when it has come into the open today, what did the Prime Minister do? He blamed the staff. He did not blame the butler this time but a person no less senior than the Secretary of the Treasury. It was the fault of the Secretary of the Treasury for misleading and giving wrong advice to the government. It was the Secretary of the Treasury who misled the government and who provided advice which was incorrect. And as the government dithered and stammered their way through question time today it has become abundantly clear that this was an attempt to blame a senior respected public servant for the fact that the spin doctors had overstated the case and made claims which simply were not true. So what we have now is the Rudd Labor government not willing to take responsibility for their own actions and seeking to defame a respected public servant and suggest that he gave them advice which few people will really believe he ever did.

The reality is that he knew what the problems were. The government was determined to seek to trump the opposition. They had, after all, rejected and ridiculed the idea of caps on guarantees. A few days earlier they had rejected and ridiculed the idea of guarantees at all. But bit by bit they had been forced to follow the guidance of the Leader of the Opposition—the policy advice provided by this side of the House—and come kicking and screaming to the reality of what had to be done. Now, during the dithering and stammering from the Prime Minister today what has come out quite obviously is that the government is about to do another backflip. There will be a cap on the level of the guarantee. It may be $1 million; it may be a little more than that. Above that you will have to pay a fee if you want to have the privilege of this guarantee. That is not what the Prime Minister announced when he released this stimulus package. This has been invented since that time.

It is quite clear that the public believed the government when they said that there would be a guarantee on deposits, and many people have taken their deposits out of one institution and put them into one that the government said would be guaranteed. But now there is going to be a limit on that guarantee. What sort of compensation is the government going to pay to those people who were actually foolish enough to believe them when they said the guarantee would be unlimited now that it is clear that it is not going to be guaranteed?

This whole package was always very poorly designed. Labor even bungled the guarantee. Many billions of dollars are invested in funds that do not have the privilege of the access to this guarantee. The nation’s biggest mortgage fund, the $2.9 billion Challenger Howard Mortgage Fund, complained today that there has been a run on their deposits because they do not have the guarantee that is available to even quite small building societies. There are many other organisations, like the solicitors investment mortgage companies and other organisations, which provide very worthwhile financial services. They do not have this guarantee. The government bungled it. And now they have also bungled the maximum amounts that are to be guaranteed. (Time expired)