Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

But I would make the point, Mr Deputy Speaker Sidebottom, mindful of that, that this policy in terms of Labor's approach to depositors goes to the very core of the covered bond issue. The reason it goes to the core of the covered bond issue is that, at the height of market uncertainty about where depositors would find sanctuary, it was the Labor government's decision to introduce an unlimited guarantee that effectively completely denuded market linked investment funds, the third-party smaller tier lenders out there in the marketplace. As a direct consequence of Labor's completely botched policy in this regard, we saw the mass migration of depositors' funds from market linked investment funds to, predominantly, the four major banks. We saw ADIs and, in particular, the four major banks gorging themselves on depositors' funds as depositors sought sanctuary, racing from market linked investments to the four major banks.

As a direct result of that botched Labor Party policy, we saw competition in the banking sector effectively collapse. The four major banks now have the highest market share percentage when it comes to loans that Australia has seen for decades. We have seen massive blow-outs in the differential between the official cash rate and bank mortgage rates for, for example, a standard variable mortgage. These are the consequences of a failed approach to policy that the so-called finance minister of the year brought to the table. Now, in an attempt to try to deal with the issue of banking competition, the finance minister of the year has once again had to go to the opposition to look for policy initiatives—because it was in fact the shadow Treasurer, who is at the table, who first raised the issue of implementing a covered bond market in the Australian economy. It was the member for North Sydney who, two months prior to the announcement by this Labor government, raised the importance of introducing covered bonds. I do not want to sound bitter, so I want to throw a bouquet to the international finance minister of the year and highlight the fact that I welcome the Labor Party's decision to embrace coalition policy in this respect. I welcome the fact that they have taken this decision, because otherwise the Labor Party, short of adopting coalition policy, would continue their merry flirt with bad policy that would make a bad situation even worse.

So the covered bonds bill that is before the House today implements, in many respects, a central tenet of the nine-point plan that was introduced on 25 October last year by the shadow Treasurer. Covered bonds—

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