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Wednesday, 15 October 2008
Page: 9257


Mr MARLES (7:07 PM) —I rise to speak in support of the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Bill 2008, the Financial Claims Scheme (ADIs) Levy Bill 2008 and the Financial Claims Scheme (General Insurers) Levy Bill 2008. In doing so, I say at the outset that it is disappointing to hear the contribution that has been made by the member for Moncrieff. It was an admirable thing that we heard the Leader of the Opposition provide his support to the package of measures put forward by the Rudd government in what are extraordinary global economic times, but since then we have seen one opposition member after another—which has been repeated just now by the member for Moncrieff—display a certain meanness of spirit instead of coming to the table and working with the government to deal with this extraordinary crisis which the globe is facing and which Australia is obviously facing as part of the globe.

To be honest, what small businesses want, what constituents in my seat want and, indeed, what every Australian citizen wants is for the people who are in this building, in this place, to put aside their party differences and work together to deal with what is an extraordinary situation facing this country. It is a situation which did not begin here—it began in the United States through the subprime mortgages which were being issued in that country—but it is a problem which has now spread across the globe. As the Prime Minister said yesterday:

The truth is that we are going through the worst financial crisis in our lifetime. I’ve described it as the economic equivalent of a national security crisis.

Alan Greenspan a few weeks ago said:

… let’s recognise that this is a once-in-a-half-century, probably once-in-a-century type of event.

He described it as the worst by far in his career. They are very strong words, not from an Australian regulator but from the most esteemed American regulator, about the situation that the world finds itself in. So it extends well beyond the issues which are going on in Australia. Indeed, this is an issue which began in America, which is spreading around the globe and which we need to act upon in this country. To come up with the sorts of comments that we have just heard from the member for Moncrieff is, frankly, very disappointing indeed.

Around the world we have seen 25 banks fail or need to be bailed out by various governments. Indeed, last night the US administration announced that it would seek to invest a further US$250 billion in shares in nine of its biggest banks. Of course, that follows the move that the United Kingdom government announced on Monday to invest £37 billion in two British banks. In fact, in Australia the situation involving banks is much better. The environment here is much better than has existed around the world, but that is why it is so important that, as a government and as a parliament, we act now, decisively and rapidly, to prevent the worst effects of this coming to fruition in Australia. That is what the package of reforms announced by the government, of which these bills are an important part, is doing.

These bills that we see in the House now provide, in essence, for the guaranteeing of bank deposits from Australian depositors in Australian banks, a very important measure indeed. It needs to be explained in a little detail, although time does not permit me to go into an enormous amount of detail in relation to this. It is very unlikely that we would ever see a situation where the money that people have in banks would ultimately be lost, even if a bank were to fall over in this country, but if we did see a bank get into trouble and deposits frozen then it might be some considerable time before people access their funds, so this bill provides for a scheme to be set up which enables the government to pay out the deposits of the depositors immediately and then to go through the process of recovering the funds from the liquidated banks, were that to be the case. That measure, the wholesale-funding guarantee for banks, which allows Australian banks to compete for funds on the global money market, and the $10.4 billion Economic Security Strategy, which was announced yesterday, are a very significant set of measures aimed at trying to put this country in the best possible position that it can be in to weather the storm, and that is exactly what these measures will do.

In the brief time that I have left to me, I want to say something which is particular to my electorate. The people of Geelong have a history in relation to this issue which makes their minds very attuned to what is going on and, in turn, very appreciative of the measures that the government has taken. I am referring to the Pyramid Building Society collapse, which occurred in Geelong in 1990. If there is a community in this country which knows the devastating effects of losing its deposits, or at least having its deposits frozen, it is Geelong, because that is exactly what was experienced by so many people in Geelong in the year 2000, when the Pyramid Building Society was wound up with debts in excess of $2 billion. It took people more than a decade to recover the money that they had in deposits in that building society, and the whole Pyramid episode scarred the community of Geelong. This has taken a long time to overcome. It is really only now, almost 20 years later, that we are properly emerging from that event and from that time. So, representing the people of Geelong, I say to this parliament that the significance of putting legislation through this parliament right now which guaranteesthe deposits of people depositing money in Australian banks cannot be overstated. It is an incredibly important measure to take in terms of providing confidence in the system and protections to individual depositors.

So I very much commend these bills to the House. I very much commend the package of measures that the government has put forward to deal with this crisis. I see the Treasurer in the House at the moment, and I would very much like to congratulate him on all the work that he has done in what is an incredibly difficult and challenging set of circumstances that our nation faces. I call on the opposition, in light of the contribution that we have just heard from the member for Moncrieff—and not just his comments but other comments that we have heard since the announcement yesterday—to put aside all the party differences, to drop all of that rhetoric and to work with the government so that everybody in this building is pulling in the one direction to make sure that this country is properly safeguarded against what is an extraordinary global crisis.