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Wednesday, 15 October 2008
Page: 9254

Mr CIOBO (6:55 PM) —These certainly are unique times. No-one, I believe, would have foreseen the extent to which this global economic crisis has rocked global financial institutions. Twelve months ago does not seem that long ago. The world ostensibly had quite a different landscape. Although it was clear, storm clouds were brewing; it certainly was not the case that the extent to which those storm clouds would develop into almost the perfect storm was understood. Speaking in support of the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Bill 2008 and cognate bills today, as indeed the opposition are, is really a signal that we recognise the importance of this measure of bills and of the government’s stimulus package to provide stability and to help rebuild confidence not only in Australia but as part of that chain of developed countries around the world which have all in recent times experienced a significant erosion of financial stability and economic confidence.

These bills do several things. From an opposition point of view, the coalition certainly initiated this process when we commenced an inquiry when we were still in government to look at developing what was widely regarded by Australians as an implicit guarantee of their deposits into becoming an explicit guarantee. These bills build on those initial moves that were undertaken by the coalition. The unlimited bank guarantee for three years, which expires on 12 October 2011, and the most likely introduction of the cap is the epicentre and the key platform upon which the entire framework of this legislation is supported. The coalition certainly supports this as the central thrust of maintaining stability and building confidence. We also support the review of the scheme in three years time, and it is the opposition’s view that this should ideally be undertaken by the Productivity Commission. The development of this guarantee on bank deposits and deposits in other ADIs is certainly one that we believe is best supported by the introduction of the levy scheme as outlined in the legislation. It means that, if there is a failure, the first port of call will be the ADI’s capital, followed by a levy on other ADIs and then ultimately taxpayer initial funding if there is not immediately the adequate amount of capital contained in the ADI or through the levies and also for subsequent repayment.

Although the perfect economic storm has now taken place around the world to an extent not seen before, it is important to recognise that this is of itself not the sole factor. It has been my very genuine concern, which I have spoken about in this chamber for a number of months, that although these are large international problems, these problems have been exacerbated in a domestic context by decisions taken by the Rudd Labor government. I have particular concern for those 2.4 million small businesses in Australia that employ around 4.4 million Australians and will find this particular period of time exceptionally difficult. The development of confidence and the importance of maintaining economic stability are certainly fundamental to ensuring that small businesses in Australia continue to enjoy, as best as is possible in these circumstances, the trading conditions that will help to sustain their business.

As much as this debate and this discussion both domestically in Australia and internationally has focused on the need to ensure economic stability, we must not lose sight of the fact that at a micro level we need to recognise the need of small businesses in this country to be heard. We need to ensure that small businesses in this country get their voice across to those in charge of the levers of government: the small business minister, the Treasurer, the finance minister and the Prime Minister. It is of fundamental importance to provide confidence that goes beyond the key economic institutions, the ADIs, and consumer confidence in the deposits in ADIs. We need to also deal with the complete erosion of business and consumer confidence that has occurred in Australia to date.

The reality is that a key, fundamental and, I believe, neglected aspect in this discussion by the government has been the government’s role in eroding that confidence. I do not dispute for one moment that the international economic tumult has played a very major part in that erosion of confidence. But let there also be no mistake that this government’s actions in a number of key policy areas have exacerbated the impact on business and consumer confidence as a result of this international economic tumult. Let it not be lost on anyone that small business people across Australia today, while concerned about the international economic factors, are also very concerned about the policies of this Rudd Labor government which are having a material negative, detrimental impact on the running of their businesses.

That is not a partisan political point. It may sound like it, but it is not. It is in fact me being an advocate for the facts as expressed in, for example, the Sensis small business survey. That survey of about 1,800 small businesses in Australia has highlighted that, when questioned directly about the federal government’s policies, small businesses in Australia believe that the Rudd Labor government’s policies are actively working against their small business.

These measures that are contained in the bills before us today will certainly go a very long way towards rebuilding some confidence and toward providing economic stability. That is why the opposition supports them. But let it not be said by the Rudd Labor government that that then means that they can approach this debate with clean hands and claim that the complete collapse of business and consumer confidence in this country is all attributable to international economic factors, because it is not. The international economic factors play a role. But that problem is exacerbated by a government that frankly does not know what it is doing when it comes to small business policies for this country.

One of the key concerns that I hear from small business is the lack of transparency in the Rudd Labor government. Small businesses do not know who calls the shots in the Rudd Labor government. When the Rudd government were first elected they claimed that they would be open, accountable and transparent. Ahead of the government’s announcement, the opposition called for an increase of the guarantee from $20,000 to at least $100,000, and I am certainly pleased that the Treasurer and the Prime Minister listened; I am pleased that the Labor government adopted the coalition’s policy on that front.

The government said that it would be transparent. But what we have seen as recently as question time this afternoon when the opposition did its job and questioned the Prime Minister on, for example, the economic forecasts upon which this government based its position that $10.4 billion should be spent to help stimulate the economy—when the opposition dared to question the Rudd Labor government about what those forecasts were and the likely impact on unemployment and the business conditions for small businesses in Australia—is that, instead of being open, honest and transparent with the Australian people and with the opposition through this institution, the Rudd Labor government resorted to ridicule. That is why small businesses in this country do not have confidence in this government to deliver the kind of leadership that they are looking for when it comes to the financial and economic management of this country.

I say to the Rudd Labor government on behalf of Australia’s 2.4 million small businesses and on behalf of constituents in my electorate that they need to ensure that their actions match their words. The opposition will provide support and indeed are doing so on these bills and on the economic stimulus package that is being provided to the Australian people. But we will not back down from our responsibility to ensure that Australian taxpayers have scrutiny of the legislation and of the government’s intentions and that they understand, through transparent government, why the stimulus package is the size that it is given the newly revised economic forecasts. It is not good enough for the Rudd government to say that they will not reveal the newly revised forecasts and that we can just wait for them to come out in good time in MYEFO.

I support these bills. I certainly support the economic stimulus—based on the very limited amount of information that the government has deemed it appropriate to release to the opposition and, through the opposition, to the Australian people. But I also reinforce to this Labor government that it is time to be upfront and transparent and to release information about the revised economic forecasts. Most fundamentally, this Labor government must recognise that, through policy decisions that they have taken and that they continue to signal to Australia’s 2.4 million small businesses, they are exacerbating the confidence problems that are a consequence of the international economic tumult and making those confidence problems from abroad even more significant in a domestic economic context. Instead of running away from that fact, the government should acknowledge it, deal with it and provide leadership.