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Wednesday, 15 October 2008
Page: 9253

Mr NEUMANN (6:48 PM) —Martin Luther King Jr, the famous civil rights campaigner, once said:

The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.

These are times of challenge and controversy for our country. There is a crisis afoot, a crisis of confidence, liquidity and nerve. Following this $700 billion asset bailout by the US congress of the US banking system, I never thought I would see the day, even then, when President George W Bush would go home to West Texas and announce a plan to buy up $250 billion worth of stock in the nation’s leading banks. Never did I think I would see in my lifetime a situation where seven European nations were acting in concert, as they did last Monday, to aid their banks with US$2.3 trillion in guarantees and other emergency measures. We are seeing a coordinated response. Four European governments—Ireland, Germany, Denmark and Iceland—have moved to ensure 100 per cent of eligible deposits, and we are doing the same.

The government is acting boldly and courageously, and the Prime Minister and the Treasurer deserve credit for that. Despite the fact that we have one of the strongest banking systems in the world, we are not immune to what is going on. The IMF’s forecast of growth in 2008 showed an expected growth of 2.5 per cent compared with the average of 1.2 per cent of other major advanced economies. So it is timely that the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Bill 2008 and cognate bills are before the House guaranteeing deposits in our financial institutions, protecting the savings of Australian people and providing them with a 100 per cent guarantee that their hard-earned savings are safe. This guarantee will apply for three years, after which the government will consider a cap. The bills before the House provide compensation to eligible policyholders with claims they may have against failed insurers as well. The bills establish arrangements to improve judicial and statutory oversight of financial institutions and insurers. They improve arrangements concerning the transfer of assets and liabilities between institutions and they facilitate recapitalisation. The new Financial Claims Scheme will be managed by APRA. In the event of a failure, no longer will bank deposit holders go into the mix with other creditors; they will receive a 100 per cent guarantee that their deposits will be paid back to them. It is a welcome measure, I am sure.

This is an extraordinary time. It is an extraordinary guarantee, and it means about $800 million of Australian bank and financial institution deposits will be covered. It is hoped and expected—the Australian public hopes and prays—that no financial institution will fail. It has not happened in the past and we do not expect it in the future. But we must be cautious and confident in the measures we take. I commend the Treasurer and the Prime Minister for what they have done. It is important that we give confidence to the Australian public in relation to these measures. My office in Ipswich has been inundated with people ringing up and discussing not just the pensioner assistance announced by the government yesterday in terms of its economic security strategy but also the financial crisis.

I welcome also the government’s $10.4 billion Economic Security Strategy, which contains five elements. But I want to focus as I conclude in the few minutes I have available to me on the assistance we are giving to pensioners, carers and those who are doing it tough in our community, particularly disability support pensioners. For so long they have been left out, and so many of my constituents will benefit from the assistance given yesterday. It is expected that nearly 44,000 households in my electorate will receive assistance, getting the kind of help that they need just before Christmas.

I want to finish on this note: I received an email from a fellow called Garry McFadden who lives in Leichardt in Ipswich. He said:

I would like to congratulate the Rudd Government on their promise to give all pensioners and carers a substantial cash bonus. This is the first time any government has treated all types of pensioners as equals. Under the Howard government disability pensioners and carers were treated with contempt by the government and Centerlink. I would like to see this Government legislate to make it an offence for any person or organisation to discriminate against disability pensioners and carers.

He is very passionate about this. He goes on, and I think this is probably the attitude taken by a lot of Australians, so I want to finish on this note:

I am the first to criticise any Government or Government organisation that I feel is not doing the right thing—

I think that is a common feeling amongst the Australian public—

but I also believe in giving credit where it is due and I must give credit to the responsible way the Rudd Government has handled the worst economic crises in my lifetime.

I am sure that people in my electorate are saying, ‘That is a terrific response,’ and that is quite apt. There would be pensioners and carers throughout the country who, like Garry McFadden, would be saying, ‘Congratulations to the government, ’ and amen to that. I commend the bills to the House.