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Monday, 10 November 2008
Page: 10278


Ms HALL (3:06 PM) —My question is to the Minister for Finance and Deregulation. Will the minister update the House on recent assessments of the Australian economy, including the release today of the Reserve Bank Statement on monetary policy?


Mr TANNER (Minister for Finance and Deregulation) —There have of course been a number of assessments recently of the state of the Australian economy and the Reserve Bank has today published its Statement on monetary policy which notes a number of important observations with respect to both global and Australian economic circumstances especially in the wake of the global financial crisis. It does note that there is less dislocation in Australian credit markets than overseas but, nonetheless, that downward revisions of global growth will have an impact on Australia. It does point out that governments and central banks responding to turbulence with various measures have generated some improvement both internationally and of course in Australia but that sentiment remains ‘fragile’ and there is a ‘deteriorating outlook for the global economy’. It notes that the government’s Economic Security Strategy will boost consumption and home building and, together with the impact of the fall in the value of the Australian dollar and the recent reduction in interest rates, that these initiatives will very strongly push back against the downward negative impact of the global financial crisis on the Australian economy.

It does point out as well that our banks are less affected by the turbulence in international financial markets than those of most other countries, that our banks are well capitalised and that their capital adequacy levels are well above the established minimum levels. It is worth noting too, as the Prime Minister referred to earlier regarding the difference in the Reserve Bank’s projected 1½ per cent growth in the coming year as compared to the Treasury’s assessment of two per cent in MYEFO that was published some days ago, that the difference between the two can largely be explained by the fact that Treasury in its assumptions presumes that there will be some further reduction of interest rates in ensuing months whereas the Reserve Bank obviously cannot make any assumptions about future movements in interest rates, and its assumptions therefore out to June 2011 assume that interest rates remain as they currently are. So that essentially explains the difference in the projections.

There have of course been other assessments of the outlook for the Australian economy, most notably from the opposition. Unfortunately, those assessments seem to change on a daily basis and sometimes even on an hourly basis. I note that the Leader of the Opposition believes that consistency is a very important principle. In fact on 8 November he was quoted as saying, ‘I place a very high premium on consistency and integrity in politics.’ Two months ago the Leader of the Opposition was reaffirming the opposition’s commitment to cutting fuel excise. That promise has now been jettisoned. So here we have a reversal of the usual arrangements: we have a government that is honouring its promises and an opposition that is actually betraying its promises before we are anywhere near an election. They are already breaking their promises and they have not even got to the election yet.

One month ago the Leader of the Opposition was saying that the global financial crisis is overhyped. What we did not know at the time was that he was quietly moving his own money out of a property fund that has since been frozen.


Mr Hockey interjecting


The SPEAKER —Order! The Manager of Opposition Business will resume his seat. The minister for finance is starting to stray well away from the question. I give him the call and ask him to conclude his answer.


Mr TANNER —Mr Speaker, I was referring to the sincerity of assessments of the Australian economy to which the question referred. I am referring here to matters that are on the public record, indeed a quote from the Leader of the Opposition:

Well you take advice from your financial planners, you invest in things, you dispose of things.

A million here, a million there—what is the difference? The Leader of the Opposition is a clever politician but you have to watch what he does, not what he says, because that changes on a daily basis.

And I note that we have still not seen any commentary or any proposals with respect to one key question in the global financial crisis set of issues, and that is: what does the opposition have to say about excessive executive salaries? What does the opposition have to say about this issue? I note in the assessment of the issues associated with global circumstances that this is one thing that the Leader of the Opposition has yet to address.

The global financial crisis is not overhyped. It is very serious and it is presenting very substantial challenges to the government. But the government is meeting those challenges with sound economic management and clear positions on the issues and clear initiatives to deal with those challenges. The opposition says that it is supporting the government’s initiatives, that it has bipartisan support for those initiatives, and then within minutes walks away from that position and proceeds to start to snipe at all of those propositions. I urge the opposition to rethink its position and to take a serious, clear and consistent position on these issues, because they are too important for the behaviour that we are seeing from the opposition. We do not need an investment banker’s approach; we need a sound approach from government to dealing with the challenges that Australia faces, and the government will not be diverted from what is necessary to ensure the security and prosperity of the Australian people.