Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

My question is to the Prime Minister. Is the Prime Minister aware of a review earlier this year of New South Wales local government investments which revealed that almost $600 million was invested in collateralised debt obligations, including exposure to United States subprime housing loans? What are the government’s contingency plans should any councils require financial assistance due to losses from such investments?

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

I thank the honourable member for Cook to his question, well-known friend that he is of local governments around the country, particularly those in the Illawarra. In response to the honourable gentleman’s question, he will be aware of the fact that under Australia’s constitutional arrangements local authorities answer ultimately to state governments for their financial arrangements, because local governments are constituted under the various instruments of state government—that is just a fact.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Why’d you give them 300 million the other day?

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

The member for North Sydney interjects: ‘Why did we extend $300 million worth of funding to local government?’ I presume you are opposed to that?

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Hockey interjecting

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

Oh, I see. It is like everything else in the Liberal Party today: ‘We sort of support it, but we don’t. We are not exactly supporting, but we’re not opposing.’ It is flip, flop, flap on every issue known to man including local government grants, which I thought most local authorities represented by those opposite were willing to receive assistance from—unless I see any hands raised that they would like their money for their local authorities removed, other than the member for Cook, who has had a notable engagement on this with local authorities down in the Illawarra, which has been well canvassed in the Illawarra newspaper.

I say to the honourable member: constitutional arrangements are clear. Local authorities answer to state governments on the question of any—

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

Mr Morrison interjecting

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

I am referring to a constitutional fact. Secondly, in terms of any of the external borrowings undertaken by local authorities, it will be the normal procedure for those to be reported to the relevant state treasuries. I would imagine that those procedures are underway. If there are any further matters which I would draw further to the honourable member’s attention, then I will do so in response to any representations to me or through the Treasurer by state governments.