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Thursday, 5 May 1994
Page: 295

Senator MINCHIN (10.45 a.m.) —As Senator Chapman indicated, the opposition supports the Banking (State Bank of South Australia and Other Matters) Bill 1994, which supports the ultimate privatisation of the State Bank of South Australia. This measure has bipartisan support. Both major parties went into the last election campaign as federal parties committed to doing what was necessary to facilitate the corporatisation and privatisation of this bank. The South Australian state Liberal government went into the last state election campaign committed to the ultimate privatisation of this bank.

  I wish to speak on this bill because it is an opportunity for me, as someone who was very intimately involved with events during this period, to remind the Senate and the people of Australia of the disaster which this State Bank collapse represents. This bank lost over $3,000 million in a very short space of time in a state which has only 1.5 million people. It does not take long to work out that we are talking about a debt of $2,000 that has been left to every man, woman and child—including my three-year-old son—in South Australia as a result of this tragedy. It is, remarkably, the biggest corporate loss in Australia's corporate history. This occurred in a little state like South Australia—the weakest and most impoverished state on the mainland.

  The scale of this disaster is beyond belief. Tragically, this is the outcome of governments getting involved in commercial enterprises, and that lesson must be seared into the minds and brains of every politician—particularly every Labor politician—in this country. This is what can happen when governments own commercial enterprises; when we risk taxpayers' money in the financial marketplace. If ever there was proof of the truth that governments should never get involved in commercial enterprises of this kind, this is it.

  This whole debacle is what privatisation is all about. This is the real reason why the Liberal Party is committed to privatisation and why the Labor Party has belatedly recognised the truth of the need to privatise government commercial enterprises. The Labor Party, nationally and corporately, should hang its head in shame over what has happened in South Australia as a result of the collapse of this bank.

  It is not only the bank in South Australia that was losing taxpayers' money in commercial enterprises: the State Government Insurance Commission lost hundreds of millions of dollars in a ridiculous deal on a building in Melbourne. We had this idiotic idea of a government company in South Australia attempting to develop something called scrimber and some $60 million went down the drain. It is not just the bank that we are talking about; the government has a whole legacy of failed commercial enterprises.

  I hope that every single Labor member has learnt a huge lesson from this tragedy. To the satisfaction of the Australian nation, it appears that the right wing of the Labor Party has learnt the lesson. Unfortunately, the Left of the Labor Party appears not to have learnt that lesson. I noticed a headline this morning which stated that the Left is gathering support to oppose the government's plan to sell off federal airports. It staggers me that the Left of the Labor Party has learnt nothing.

  Unfortunately, it would appear that the Australian Democrats have learnt nothing, if I am to read Senator Kernot correctly. She says that the Australian Democrats reluctantly support this bill. The Democrats have been very reluctant to learn the lessons from the fate of the State Bank in South Australia. The Democrats seem to retain their old socialist leanings and believe that governments should still get involved in these sorts of enterprises. The Democrats get very nervous when we approach privatisation. That staggers me.

  The state Labor government in South Australia sat on its hands while this bank went totally out of control. I concur with what Senator Kernot said about the absolute binge that this bank went on. Marcus Clarke went on a lending binge of a type that this country has never seen before; lending money not only all over South Australia, but all over Australia and all over the world—all this from a small regional bank.

  The people responsible for this—the state government, which represented one and a half million shareholders in this bank—just sat by and allowed this binge to go on without exercising any control or responsibility. Throughout this period the state Labor government attacked us, the state opposition, for raising questions. For having the audacity to ask a few questions in the state parliament, for questioning the basis of the bank, we were attacked relentlessly as being anti-South Australian, as being treacherous to the interests of South Australia. A relentless campaign was waged against us for having the wit to ask a question.

  That brings me to the 1985 state campaign, where we proposed the privatisation of entities such as the State Bank. We then faced a massive ALP scare campaign, including, to its great shame, the federal Labor government attacking us for proposing the privatisation of things such as the bank. The great irony now is that, if the Liberal Party had won the 1985 state election, the taxpayers and consumers of South Australia, including the Australian Democrats, would have been spared this $3,000 million loss we now carry. The bank, if sold then, would have brought a considerable price, prior to Marcus Clarke wrecking it.

  I want to take this opportunity to pay tribute to former Senator John Olsen, who led that campaign with great courage and tenacity in the face of this outrageous campaign against him by the Labor Party. It is a tragedy that John was not elected on that occasion and given the opportunity as premier to save South Australians from the debacle and tragedy that befell them as a result of Labor's campaign in that election.

  There is a particular political point I hope the Democrats will take note of. This is not simply a matter of loss of money; when a commercial enterprise such as this is in state government hands, it is an open invitation to political corruption of the worst kind. We saw that, in the case of this bank, in the 1987 federal election and, more particularly and to the great sorrow of John Olsen, the 1989 state election, when the state Labor government blatantly used taxpayers' money to bribe the bank not to increase interest rates prior to those elections. That very act on its own cost John Olsen the 1989 state election. The government used $2 million of taxpayers' money to get the State Bank to stall the interest rate increase that every other bank in the country was bringing in, and so eased its way back into office with only 48 per cent of the vote at that election. This was rank political corruption of the worst kind, and it is what happens when a government owns an enterprise of this kind. Corruption is almost unavoidable.

  The State Bank of South Australia, which is the subject of this bill, is the most dramatic example imaginable of what can happen when a government invests taxpayers' dollars in commercial enterprises. The Labor Party in South Australia has paid the greatest price imaginable for what occurred. For its own reckless irresponsibility, it has been reduced to less than a cricket team in my state, with only 10 seats. It will take that party a generation to get back into office. I hope that all Labor members, and indeed all Democrats, have learned this lesson so that the people of Australia can be spared further debacles of this kind.

  As someone who was around for that 1985 state campaign, I am amazed at how far the ALP has travelled since then, and I give it credit for that. It is refreshing to see an ALP government saying that it will do things such as selling off all federal airports, which it obviously should. Clearly, the ALP has learned something from this. It proves, given the example of the 1985 state campaign, that it is the Liberal Party in this country that is the party of ideas. It is the Labor Party that trots along behind, learning the lessons from what we have been telling it and the people of Australia. We are the champion of ideas, of economic reform and of the things that need to be done to prevent debacles of the kind represented by the collapse of this bank.