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Tuesday, 25 November 2008
Page: 11310


Mr PEARCE (8:38 PM) —Can I start by saying that I think it is always interesting to hear a new member to this House carrying on about how they perceive the other side of the House. I was just chatting with my honourable colleague at the table, the member for Denison, who has been here three times as long as I have. I recommend to the member for Lindsay that maybe in the forthcoming Christmas-New Year period—I hope that he will have the opportunity to relax with his family—if he has any time, he might care to order just a few videos of his party during 13 years in opposition. He referred to the opposition playing politics and political point-scoring. I would just say to the new member for Lindsay—he has only been here for one year—that I really recommend that he does a bit of research about his own side of politics before he starts firing some pot shots at us. I have been here for 7½ years, and every day for 7½ years I have heard nothing but the Australian Labor Party playing politics with everything possibly known to man. So I think it is interesting to hear new members, in their naivety, try to present themselves in a way that makes them holier than thou.


The DEPUTY SPEAKER (Hon. Peter Slipper)—I would gently remind the honourable member to return to the bill.


Mr PEARCE —Thank you, Mr Deputy Speaker. We are here to talk about the Guarantee Scheme for Large Deposits and Wholesale Funding Appropriation Bill 2008. Looking at the explanatory memorandum, which I picked up off the table tonight, it is interesting to see on page 3 that the announcements were made on 12 October and the date of the effect of this bill is 28 November, and here we are today on 25 November introducing the bill. You really do have to ask yourself the question: what on earth has this government has been doing since 12 October to make an announcement on 12 October and introduce legislation into the House some six weeks later?

Of course we know the answer to that question. The answer is they have been trying to sort out the absolute mess that they created with their announcement on 12 October. It is difficult to try to construct a phrase which in an adequate way sums up the absolute mess that this government has created through its announcement on 12 October. I have thought about various descriptions, but it is difficult to come up with a description that totally reflects the dislocation that this government’s announcement has made in the Australian financial system. I guess the best way is to refer to some remarks from the Leader of the Opposition. He has made the point very strongly, and correctly in my view, that we are yet to see a leader of a developed nation throughout the world actually make things worse, by their response to the global financial crisis, other than Kevin Rudd, the Prime Minister of our country. He has managed to earn this distinction for himself because through his policy responses he has made things worse in our country rather than better. I think that does define him in the true and proper way that he deserves to be defined.

This bill goes to providing a guarantee scheme for large deposits in the wholesale funding issue. This is a proposal that the opposition requested of the government six weeks ago—weeks and weeks and weeks ago. And for weeks and weeks and weeks we have been hearing from the government that they would not legislate, that there was no need to legislate and that everything would be fine. So what we have seen today from the Treasurer is probably one of the biggest backflips in Australian parliamentary history. I notice that no government speakers so far have mentioned this, but Mr Deputy Speaker, you being the very astute person that I know you are, will recall that it was around the middle of this year that the government said that it would introduce a guarantee to cover deposits up to $20,000. We have just heard the member for Lindsay criticising our position for stating that there might be a deposit limit of $100,000, but it was the government that proposed a policy initially of $20,000.

On 10 October that week we called on the government to increase that guarantee to a minimum of $100,000. We did that because we were hearing firsthand the reports of deposits being moved from second-tier ADIs et cetera into the so-called big four banks. So it was that on 12 October, just two days later, the Prime Minister announced the introduction of an uncapped guarantee for all deposits of Australian banks, building societies and credit unions and the subsidiaries of foreign banks and for wholesale term funding. It has gone down in Australian political history, of course, that the Prime Minister did that without even talking directly with the Governor of the Reserve Bank of Australia. Mr Deputy Speaker, I am sure you would agree with me that it is incredible to think that the Prime Minister of Australia could actually make this decision without consulting directly the Governor of the Reserve Bank of Australia.


The DEPUTY SPEAKER —I would like to remind the honourable member for Aston that as Deputy Speaker I have no views.


Mr PEARCE —Thank you very much, Mr Deputy Speaker, for that. I appreciate that point very much. But it is also fascinating when one takes a second to reflect on the fact that, since all of this fiasco began in the government in and around this announcement—and it may shock you, Mr Deputy Speaker; I know it shocked many people in Australia—the Prime Minister of Australia is yet to come into this chamber and actually address the parliament in relation to the global financial crisis or anything to do with the government’s policies. The Prime Minister is yet to actually come in, stand up at the dispatch box and speak to the parliament about the global financial crisis and any policy response of the government.


Mr Bidgood —Ten billion dollars response!


Mr PEARCE —It is fascinating to think that the Prime Minister of this country is not prepared to come into the chamber—


Mr Bidgood —You haven’t been listening!


The DEPUTY SPEAKER —The honourable member for Aston will just wait while I remind the honourable member for Dawson that he ought to contain himself.


Mr PEARCE —The honourable member for Dawson is yet another new member and I appreciate that he has not been here to see the behaviour of his side of politics over a long period of time.

It is amazing to think that we cannot get the Prime Minister to come into this chamber. I think I know what might be some sort of an incentive for the Prime Minister to come in here. If we were to relocate this chamber overseas, the Prime Minister would come in very swiftly. He would be very happy to address the parliament. I think the problem with this chamber is that it is in Australia. Because it is in Australia, the Prime Minister does not feel obliged to speak to the parliament at all, but if we were to transport the parliament to some foreign country I think you would find the Prime Minister would be delighted to address the parliament—because, as we know, the Prime Minister very much likes to address foreign entities wherever possible. I think the problem that we have is that our chamber is actually in Australia. It is fascinating to reflect on that point.

Since the government announced its policy in relation to this guarantee scheme, we have, as I mentioned earlier, been for weeks and weeks hearing from the government that there is no need to legislate—that everything will be okay. Yet, of course, we see this legislation before us today. What has also been fascinating to watch throughout this process is the way in which this government has sought to cut people out of the debate. We read various media reports about how the government has consulted with the big four banks, but I know for a fact, based on my consultation with the industry, that the government has not been consulting with a broad cross-section in the financial services community at all. As a matter of fact, it has deliberately cut out key players in the financial services industry. That is a major concern. It is a concern because as a result of this government’s policy there has been a huge dislocation in the Australian financial services sector.

The investments of around 300,000 Australians have been frozen as a result of this government’s policy. Government members may think that that is acceptable. Government members may think that introducing a policy to have 300,000 Australians’ investments frozen—Australians who need security and certainty about their investments—is appropriate. I think it is exceptionally inappropriate. Those Australians have been locked out of their savings. Senior Australian business leaders have stated that the government’s policy needs to change. Gail Kelly, the CEO of Westpac, has said publicly that the government’s policy needs to change. Consumer confidence is now at an all-time low. Business confidence is at an all-time low. Inflation is at a 13-year high.

We heard about the Prime Minister’s declaration of war on almost anything. It is fascinating to think about the Prime Minister’s war on inflation, which he declared in January this year in Perth. The member for Dawson might remember that five-point plan to fight inflation. It is interesting that, ever since the Prime Minister announced his war on inflation, inflation has increased every quarter.


Mr Bidgood —Interest rates have gone down!


Mr PEARCE —We have had this declaration of war on inflation and yet every quarter inflation has gone up. So I am not sure how the war on inflation is going, Member for Dawson. Three hundred thousand Australians have had their investments frozen. Senior Australian business leaders have called on the government’s policy to change. Consumer confidence and business confidence are at an all-time low. Inflation is at a 13-year high. Unemployment is now forecast to rise, and the government says—


Mr Bidgood —Interest rates have gone down two per cent!


The DEPUTY SPEAKER —Order! The honourable member for Dawson will cease interjecting.


Mr PEARCE —Thank you, Mr Deputy Speaker. Unemployment is now forecast to rise and the government would have us believe that all of this is within their plan. This is despite their war on almost everything that opens and shuts.

The coalition welcomes this very long-overdue piece of legislation. This is the piece of legislation that we asked the government to introduce. We asked the government to do this weeks and weeks ago. For weeks the government berated us in the parliament and told the Australian people that it was not needed, that it was not required and that they had everything in hand, and yet today we see this piece of legislation tabled in the parliament. We support this legislation. It is long overdue and it is another sign that this government really does not understand what they are doing in relation to the global financial crisis, which of course is of great concern to the people of Australia.