Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is again to the Prime Minister. In the interests of clarifying the confusion of his previous answers, will the Prime Minister say simply and clearly whether the Reserve Bank recommended to the government that the deposit guarantee be unlimited—yes or no?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I do not propose adding to the earlier questions put to me. I put it in these terms again for the benefit of the honourable member: (1) this country, if we stand back from it all, was faced with being buffeted by a significant global financial storm; (2) the relevant strategic and budget committee of the cabinet met across an entire weekend; (3) the options put before us had been the subject of discussions between the financial regulators; (4) at the time that the options which were then adopted were being considered by that committee of the government, the question was explicitly put to the Secretary to the Treasury, ‘Is this the advice of the financial regulators, including the Reserve Bank?’ to which the answer was unequivocally, ‘Yes.’ That is why the government acted.

The credibility of the entire position being put forward by the Leader of the Opposition is again blown completely out of the water today by the Reserve Bank governor, who says the actions by the government were sensible and the Reserve Bank of Australia supported them. The only one it seems who does not support them is the Leader of the Opposition. I presume the Leader of the Opposition is therefore wedded to his policy of $100,000 as being the appropriate limit. The Leader of the Opposition should reflect long and hard as to who would be excluded by that particular number, as well as reflecting long and hard on why in the five years after HIH no action was taken on the part of those opposite.

I say to the honourable member, as he seeks again to make short-term political capital out of the long-term national economic interests of this country, that it is far better that we have people engaged in this debate in a calm and responsible manner, because the entire country, the stability of the financial system of this country and the appropriate stimulus needed for the long-term growth of this economy is of great importance to working households.

I conclude my answer by saying this: none of this is hype; it is reality. We are dealing with reality here. Those opposite seem to think that those holding superannuation regard the global financial crisis as hype. That demonstrates definitively that the Leader of the Opposition has got so far out of touch on these matters, as he was last time when he said that an interest rate rise of 25 basis points, households having suffered seven interest rate rises in a row up until then, was nothing to get worried about. This demonstrates a Leader of the Opposition grossly out of touch with the real concerns out there across Australian households, as he seeks to come in here and make a short-term political point in order to advance his interests in securing a headline in tomorrow’s newspapers.

I say to the Leader of the Opposition that his responsibility as a political leader in this country should be to put our national economic interests first. Instead, he puts his short-term personal political interests first. It is clear for all to see. This government stands by the action it took Sunday a week ago. It is the responsible course of action. I conclude by saying this to the honourable member: could he reflect also on the impact of the government’s decision on what has happened out there in the actual interest rates charged by the banks concerned. Since the action taken by the government both on this deposit guarantee and on the guarantee for—

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

Mr Dutton interjecting

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

The member for Dickson will withdraw.

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

Mr Speaker, I withdraw.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

What households across Australia are concerned about is the availability of credit and the cost of credit. The NAB came out in recent days saying:

While our current cost of funds remain at a historical high, policy measures announced by the Australian Government earlier this month have started to have a positive impact on the credit market.

We welcome this new development and anticipate that we will see some relief in the significantly higher premium we are currently paying for wholesale funds.

There were similar remarks by the ANZ. I say to those opposite that the real concerns out there are (1) the stability of the financial system, (2) making sure that there is sufficient credit to flow by way of loans to businesses and small businesses and (3) to ensure that you provide sufficient support for this financial system in a time of global financial stress to enable our major commercial banks to provide maximum pass-through of official reductions in interest rates onto households.

Those are the concerns which galvanise this side of the House—the concerns of superannuants, the concerns of households dealing with mortgages and interest rates and the concerns of pensioners trying to survive in the current climate. Those opposite are interested instead in short-term political points, and I think they stand condemned for it.