Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

All members of the House would be aware of the turbulence that has convulsed world financial markets throughout the course of this year. One of the world’s oldest investment banks has filed for bankruptcy, the US government has tipped billions of dollars into Fannie Mae and Freddie Mac, the world’s largest insurer has been nationalised by the United States government and, across the United States and Europe, markets continue to suffer unprecedented turmoil.

A key challenge for the government and for our independent regulators is to remain vigilant in the face of these overseas events. Our prudential regulation is amongst the best in the world, as was recognised by the IMF overnight. So we are well armed, but we are not bulletproof in this turbulence around the world. But even in adversity there can be opportunity. In these troubling financial times there will be opportunities for Australia. In these turbulent times investors will be looking for a safe place in which to invest their funds, and Australia fits the bill. That is why the government continues to take concrete steps to transform Australia into an international financial services hub. It is a government priority to make Australia a leading financial centre in Asia.

Tomorrow I will be introducing legislation into the House to reform the way the tax act deals with managed funds—an important step in promoting Australia as a financial services centre. Of course, these changes all flow from our reduction in the withholding tax on budget night—a very important reform that has been widely welcomed. I would have thought it would be something that would be welcomed on both sides of the House, but unfortunately that is not the case.

I am asked to report on challenges to the financial sector, and one of the challenges is the shadow Treasurer’s complete lack of understanding of economics. The Treasurer has informed the House of some fundamental errors by the shadow Treasurer, and it is with a heavy heart that I have to report yet another error by the shadow Treasurer. In her now infamous speech on Monday, she said this at the dispatch box:

It is symptomatic of a government that is unsure of where to go or how far to go. This is a government that says it wants to promote Australia as a financial services hub and then reduces withholding tax for foreigners.

I even checked the Hansard this morning and it is still there. Sometimes mistakes can tragically disappear from the Hansard but this one is still there. She came in in full flight, the Wall Street Journal in one hand and a pair of scissors in the other, and off she went to launch an attack on our withholding tax policy. This is an initiative which has been widely welcomed across the financial services sector. Stephen Dunne, the managing director of AMP Capital Investors, said:

Reducing the withholding tax for foreign—

investors—

… will strengthen Australia’s competitiveness as an … investment centre.

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