Wednesday, 26 November 2008
Questions without Notice
My question is to the Treasurer. Having caused a freezing of funds in non-bank financial institutions by its action in guaranteeing bank deposits, what is the government planning to do when on 30 November GE Finance ceases to operate in Australia, leaving Bob Moulton and the partners of Booleroo Agency, a large agricultural dealership in the electorate of Grey, with a $2 million floor plan and no prospects of refinancing? What does the Treasurer and his government suggest that Mr Moulton and his business do; and how many motor and machinery dealers does the government expect to close their doors as a result of the paralysed finance sector?
I thank the member for his question. There was a similar question yesterday and it is the case that there is a substantial issue to do with car financing and that is an issue which predates the bank guarantee and the guarantee for wholesale funding. Indeed, one of the major providers of finance announced they were pulling out well before the bank guarantee was put in place, so we should have very clearly in our mind that there are many areas out there in the finance sector, whether it is car finance, whether it is mortgage trusts or whether it is cash management trusts, that are all impacted upon by the global financial crisis and the impact on the cost of borrowing.
What the government has been doing in this case, when it comes to car finance through David Murray and the Treasury, is working very closely with financial institutions and industry to see whether we can get an arrangement in place which provides finance from institutions which are liquid. Those are discussions which are happening at this moment. I cannot predict the outcome of those discussions, but we understand the importance of the car industry and the importance of car finance, and the government is doing everything it possibly can, working with the private sector and working with the industry to get a positive result. That is an ongoing process and I will report back to the House on that process at a later stage.