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Wednesday, 15 October 2008
Page: 9207


Ms JULIE BISHOP (3:27 PM) —On Sunday and Tuesday of this week, the Prime Minister made two significant announcements, both in the context of the global financial crisis. The first announcement, an unprecedented step on the part of an Australian government, was to give an unlimited explicit guarantee for all deposits in authorised deposit-taking institutions—Australian banks, building societies and credit unions—and also to give government backing to wholesale term funding of Australian banks. The second announcement, made yesterday, was a $10.4 billion package designed to be a fiscal stimulus for the Australian economy.

The opposition have said in relation to both announcements that we understand the government is seeking to shore up the Australian economy. We understand that the government is addressing the concerns that other governments around the world have expressed in their response to the global financial crisis, and we said we would support these measures. Of course, we expected—and I am sure members of the public would have expected—that the opposition would be given briefings by Treasury and government officials regarding the details, the assumptions and, indeed, the forecasts that have underpinned these significant announcements. This is a reasonable request and I must say that we have had meetings with some Treasury officials and representatives of the government. But today in question time the government’s approach to disclosure, transparency and accountability was there for all to see.

Last night the Prime Minister set the scene. He said he would level with the Australian people. He acknowledged that fear of the unknown is a key factor in the current economic crisis. In fact, many have said that the financial crisis is being driven by a crisis of confidence that is being driven by a crisis of fear. One of the great unknowns at present is the full impact of the global financial crisis on the Australian economy. It is partly unknown because the crisis is still unfolding overseas—governments are reacting and responding to events as they occur—but it is also partly unknown because of the growing list of questions that remain unanswered by this government.

In question time, the opposition sought, on behalf of the Australian public, to ask the government perfectly legitimate and perfectly reasonable questions about the basis for the $10.4 billion package. After all, this is a package which essentially halves the surplus—the buffer that had to be put away for a rainy day—in one fell swoop. The responses that the coalition received to our questions really indicated the government’s uncertainty and incompetence on this issue. For a start, we asked questions about the economic advice that the government had received that caused it to begin considering an economic security strategy. The Prime Minister brushed that off with, ‘Oh well, a couple of weeks ago’ and then, ‘We had a meeting over the weekend’ and that is all we need to know. When we asked questions about the specific economic forecasts that have led the government to believe that a $10.4 billion fiscal stimulus package was necessary, we were told that we can wait for those forecasts. They are not going to provide revised economic forecasts at this time. Yet, if we dare question the basis upon which this strategy was put forward, the indignant response is quite astounding.

We are still waiting for the details of the implementation and the details of the regulation of the bank guarantee scheme; they remain unknown. Specifically, the current forecasts for unemployment and growth are still a mystery. Various ministers have said that unemployment will go up, but they refuse to let the Australian people in on the detail of those forecasts. They have refused to let the Australian people know the position in relation to growth. Interestingly, the Treasurer said, ‘You are all going to have to wait for MYEFO,’ the Mid-Year Economic and Fiscal Outlook. Then the Treasurer made the outrageous claim that the coalition, when in government, released the Mid-Year Economic and Fiscal Outlook at 4.30 pm on Christmas Eve. He was obviously trying to infer that, when in government, the coalition mischievously put out the MYEFO at 4.30 pm on Christmas Eve. On not one occasion did the coalition release MYEFO at 4.30 pm on Christmas Eve or at any time on Christmas Eve yet that is what the Treasurer told the House.

On each occasion, the MYEFO was released within six months of the budget. In fact, it was the coalition who introduced the concept of a Mid-Year Economic and Fiscal Outlook. For our first budget, which, of course, was handed down in August of 1996, the first MYEFO was produced by 28 January the next year, 1997. Thereafter we reverted to May budgets, and on each occasion the MYEFO was released not at 4.30 pm on Christmas Eve as the Treasurer asserted in this House but within six months of the budget. The Treasurer should come back into this House and explain to the Australian people why it is that he accused the coalition of handing down the Mid-Year Economic and Fiscal Outlook at 4.30 pm on Christmas Eve when that was not the case.

The Prime Minister told the House yesterday that the government believes its $10.4 billion Economic Security Strategy is large enough to make a significant contribution to strengthening the Australian economy into the future. So today we asked, quite reasonably: what is the forecast for the growth of the Australian economy over the next 12 months? But the response was confected outrage—how dare the opposition ask what forecasts the government is relying upon when it commits $10.4 billion of taxpayers’ funds to an economic stimulus strategy! According to the Prime Minister, the information that the government is relying upon is the World economic outlook of the International Monetary Fund, which projected growth to be 2.2 per cent in 2009, and the Reserve Bank’s forecast of August this year, which forecast growth at 2.25 per cent. So, reasonably, we asked, ‘Is the Prime Minister asserting to the Australian people, through the Australian parliament, that this $10.4 billion package is to stimulate growth that is projected to be positive—that is, at least 2.2 per cent next year?’ The Prime Minister refused to answer that question.

In these extraordinary times, which call for extraordinary action—we have been told by the Prime Minister that these are dangerous times—why will the Prime Minister not release the revised economic forecast so the entire Australian community can understand the basis upon which this government took the action? The opposition has asked for the economic advice that underpins the package to be released. We were told we have to wait. On what basis are we to assume that the government believes that this package is large enough to provide the stimulus that they believe is required? All these questions remain unanswered.

What advice have the Treasury and other government officials provided to the government that prompted them to begin considering delivering this large package? Last Wednesday the Prime Minister was saying that our economy was strong, robust and growing and that we were in the best position of virtually every other country to withstand the global financial crisis. Yet by Monday, a $10.4 billion package was being released to the Australian public. What advice did the government receive between, let us say, last Wednesday and Sunday that gave rise to the consideration of such a package? The finance minister told us on Lateline last night that the government had received ‘plenty of advice about where things were heading’. Perhaps he would like to share that with the Australian public. What is the nature of the advice that the government has received about where things are heading? The Australian public would like to know the basis upon which this package was constructed. That advice has apparently been received from the head of Treasury and other government officials, but what is the nature of the advice?

The finance minister told us on the Lateline program last night that the government had received advice:

… that suggests that absent some serious action by the Government on both fronts, both with respect to the financial system and with respect to stimulating economic activity.

What advice? What advice did the government receive that said absent some serious action there would be consequences? What action was recommended with respect to the financial system? What action was recommended with respect to economic activity? Why are the Australian public not being informed? Why are we being told that we have to wait in these extraordinary times that demand extraordinary action? Why can’t the Treasurer release this information?

What about unemployment growth? We are talking about people’s jobs. We are talking about people’s livelihoods. Government ministers come in here and blithely say, ‘Oh, well, our forecasts on unemployment were wrong and there is going to be an increase in unemployment,’ but refuse to give the Australian people any insight into what that increase might be. There was a forecast in this year’s budget that unemployment would increase by 134,000 and yet has the Minister for Employment and Workplace Relations ever been upfront with the Australian people and admitted that that is the figure contained in the budget papers? No, the minister has not done that. You have to go through and analyse the budget papers to find that figure of 134,000. The minister for employment has refused to admit that the government’s forecast for unemployment was 134,000 job losses within the next 12 months. What is the current forecast? I ask the minister at the table, who will be speaking next: will he stand up and tell the Australian public the government’s current advice and current forecast on unemployment?

If you take the people of Australia into your confidence, they can take action themselves. They can recast their priorities. They can do things within their own lives, within their own households and within their own jobs. Businesses can take action and reorder priorities if the government is upfront with them, levels with them and tells them what current information the government has that has caused it to take these unprecedented steps.

We are told by the government that there are going to be tough times ahead. We are told by the Treasurer that there is a rocky road ahead, yet today the government has failed to answer every detailed question about the economic advice it has received about the revised economic forecasts that it currently clearly has. It has refused to take the Australian people into its confidence. The government has refused to level with the Australian people.

As I said at the outset, the financial crisis is now largely being driven by a crisis of confidence. Governments around the world are responding to that crisis of confidence. For example, the stock markets in recent weeks have been driven largely by a loss of confidence that has been fed by a fear of the unknown. In the case of the subprime crisis and its subsequent impact on the global financial system, we know that significant losses have already occurred but we do not accurately know the extent of likely further losses. The government has not told us, for example, the level of exposure of Australia’s banks to credit default swaps. When I asked a question yesterday about whether there is any exposure to taxpayer funds through the government’s guarantees on deposits and term funding, the response once more was outraged indignation—‘How dare the opposition ask questions about this government’s handling of Australia’s response to the global financial crisis?’ In fact, the Prime Minister went so far as to suggest that the opposition was acting like the government of Cuba. Is that the kind of language that we should come to expect from the government as they try to instil confidence in the Australian people?

The government must take the Australian people into its confidence. The Prime Minister said he would level with the Australian people. His opportunity to level with the Australian people is to give frank answers to extremely legitimate and reasonable questions asked by the opposition in question time; otherwise, the fear of the unknown will continue to engulf the Australian public. The government must come clean. (Time expired)