Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer. Will the Assistant Treasurer outline to the House the powers that Australia’s regulatory authorities have in dealing with the current global financial crisis? Has there been any criticism of those powers or of other government action in relation to current events?

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

I thank the honourable member for Isaacs for his question, because it is important that the House is aware of the powers that APRA has, on behalf of the government and the Australian people, to protect bank deposits in these difficult times. Following the announcement of the guarantee of bank deposits by the government, it is also important that the House is fully aware of the substantial powers that APRA has to protect government funds.

Of course, Australia’s regulatory framework and APRA’s powers have been recognised as being among the best in the world. APRA has the power to request any information from a deposit-taking institution and can direct the institution to do or not do anything in relation to the conduct of its business. This includes giving directions to an institution to correct its behaviour before a crisis happens. If an institution is likely to fail, APRA can organise a compulsory transfer of the business to another willing institution. APRA has the power to remove any director or senior manager from office or to direct the institution to undertake or not undertake various financial transactions. APRA may appoint itself as a statutory manager to replace the management of a distressed institution.

The government has given APRA even further powers in this climate of uncertainty. APRA will be able to, if needed, more easily change the ownership of a bank by issuing new shares, selling shares or cancelling shares. This is important because, in times of distress, APRA will be able to strengthen the financial institution in question in a short period of time and avoid damage to deposit holders or the financial system more generally. In the unlikely event that an institution failed, the government through APRA would take control of the institution’s insolvency. And, if the government is not fully compensated through the insolvency proceedings, a levy on financial institutions can be imposed to ensure taxpayers are not out of pocket due to the financial collapse.

I am asked by the member for Isaacs if there is any criticism of these powers. I can report to the House that, despite all these powers and the strengthening of these powers by the government, and the Leader of the Opposition continues to quibble as to whether the powers are strong enough. We saw this again last night in the latest instalment of Kath-and-Kim economics—also known as the Leader of the Opposition’s address to the nation, his latest ‘look at me’ moment. Last night the Leader of the Opposition again said:

… we are concerned to ensure that safeguards are put in place so that Government guarantees offered to banks do not result in taxpayers picking up the tab for bank losses.

That is what the Leader of the Opposition said last night, despite the fact that, in his speech to the House on the bill, he recognised the safeguards that are in place. It is the conviction politician saying one thing in the address to the nation and saying anything in the House to gain popularity.

I am also asked about criticisms of government actions. As the Treasurer has outlined to the House, last night the Leader of the Opposition criticised the government for not predicting this crisis, despite just a few weeks ago saying that nobody could have predicted this crisis. Even the American version of Kath and Kim had more credibility than the Leader of the Opposition last night; it was a joke. But it gets worse. This morning, the member for Aston went one better. The member for Aston, the member for Higgins’s campaign director, went on Sky’s Agenda with the member for Rankin and said this: ‘The member for Higgins has been warning of the financial tsunami for some months.’ We know he is the campaign director for the member for Higgins, and he is still at it, saying the member for Higgins has been warning of a tsunami for some months. In fairness, the member for Higgins did talk about a financial tsunami last year. There is only one problem: he was talking about and predicting a tsunami arising out of policy decisions made in China. This is what the member for Higgins said on 26 October last year:

… the day they—

referring to the Chinese—

decide to float their currency, you will get a huge reversal of financial flows around the globe which will affect all exchange rates. That is why I compare it to a tsunami.

Mr Speaker, through you, with the greatest of respect, can I send a memo to the opposition: China has not floated the yen—that is not the cause of the international crisis.

Opposition Members:

Opposition members interjecting—

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

China has not floated its currency. I do not blame the member for Higgins—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Paterson will resume his seat.

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

for not predicting this crisis, but they should not pretend that he did.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: this is a government that is supposed to be restoring some sort of confidence to the market instead of conducting something like a clown show.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

What is the point of order?

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

It goes to relevance.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Dickson is warned, because it is not a point of order. The House will come to order! The Assistant Treasurer will resume his seat for a second—hopefully it will be for a second.

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

We do not blame the member for Higgins for not predicting this crisis, but we do blame the member for Aston for claiming credit for the member for Higgins for predicting something he did not—for predicting that the Chinese would float their currency—

Opposition Members:

Opposition members interjecting—

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

Yuan is what the Chinese currency is called—and then claiming, in hindsight, that he knew it was coming. I do not know what is worse on the other side: the Leader of the Opposition claiming to see the future or the member for Higgins refusing to acknowledge the past.