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Tuesday, 25 November 2008
Page: 7183

Senator LUDWIG (Minister for Human Services) (3:37 PM) —I give notice that, on the next day of sitting, I shall move:

That the provisions of paragraphs (5) to (8) of standing order 111 not apply to the Guarantee Scheme for Large Deposits and Wholesale Funding Appropriation Bill 2008, allowing it to be considered during this period of sittings.

I also table a statement of reasons justifying the need for this bill to be considered during these sittings and seek leave to have the statement incorporated in Hansard.

Leave granted.

The statement read as follows—

Purpose of the bill

The bill provides a standing appropriation for the Australian Government’s Guarantee Scheme for Large Deposits and Wholesale Funding (Guarantee Scheme), which applies from 28 November 2008. The bill also provides a related borrowing power.

Reasons for Urgency

The Guarantee Scheme is legally binding against the Commonwealth without a standing appropriation from 28 November 2008. However, potential wholesale investors need to be confident that any calls on the guarantee will be met quickly, in the unlikely event that an Australian authorised deposit-taking institution were to default on a loan.

The provision of a standing appropriation from 28 November 2008 will assure international markets that Australian institutions are, in their wholesale borrowings, supported by an Australian Government guarantee, and that payments made under that guarantee will be timely.

This will bolster financial system stability, confidence in our banks, building societies and credit unions, and help ensure the flow of credit to Australia’s businesses and households.

(Circulated by authority of the Treasurer)