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Tuesday, 3 February 2009
Page: 22


Mr TURNBULL (3:33 PM) —My question is to the Prime Minister. I refer the Prime Minister to the comments by the Deputy Prime Minister in Davos, where she said:

We have open and competitive markets backed up by a world class financial and prudential regulatory system—indeed given the flaws exposed by the global financial crisis in financial and prudential regulation I would say our system is even better than world class.

Does the Prime Minister agree with his deputy that Australia has the best financial regulation in the world?


Mr RUDD (Prime Minister) —I have said repeatedly in the parliament and elsewhere that Australia is well served by its financial regulators. Can I also say to the Leader of the Opposition, in response to his question—and I listened carefully to his remarks before and his statement to the parliament about the previous government’s robust response to recommendations on better regulation of the Australian financial system—what did the previous government do about recommendations over many years for the establishment of a deposit insurance scheme in Australia? In June 2000, the FSF study group on deposit insurance recommended:

An effective deposit insurance system can promote public confidence and contribute to the stability of the financial system …

What did the previous government do about that? Nothing. In September 2002, APRA’s submission to the HIH royal commission called for a financial claim scheme to protect insurance policyholders and creditors, including deposit holders in the financial system. What did they do about that? Nothing. What happened with the government’s previous adviser, Professor Davis, when he recommended:

Internationally, deposit insurance and insurance policyholder protection schemes are becoming widespread. Australia is one of only two Organisation for Economic Cooperation and Development (OECD) countries without some form of explicit deposit insurance.

What did they do about that? Nothing. And so the list goes on.

I noted very carefully the Leader of the Opposition quoting his new ideologue of choice, Mr John Taylor, someone who is a well-known supporter of—if not somewhat infatuated with—Milton Friedman, the father of deregulation, together with Friedrich Hayek. What did Taylor say when he was asked about Milton Friedman? Taylor—the person who the Leader of the Opposition has quoted extensively, not just today but elsewhere; the person who idolises Milton Friedman—says:

I keep asking myself, ‘What would Milton say? What would Milton do?’ …

If you want a clear statement of the right-wing deregulation, antiregulation agenda to which you have linked yourself, out of your own mouth, I simply draw your attention to the full text of what Mr Taylor has said.

Honourable members interjecting—


The SPEAKER —Order! I just remind members that if they want to make an intervention at this stage during question time, they require the call.