Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

My question is also to the Prime Minister. Will the Prime Minister update the House on the recent commentary on the global financial crisis and the global response?

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

I thank the honourable member for his question. Last night President Obama spoke in New York on the first anniversary of the collapse of Lehman Brothers. That day in some respects, as we know, marked the onset of the global financial crisis, the global economic crisis and, of course, the global employment crisis—and the worst global recession that we have seen since the Great Depression three-quarters of a century ago. The President’s speech looked back to the dark days of September last year when the global financial system teetered on the brink of collapse and when the global economy stared into the abyss.

Opposition Members:

Opposition members interjecting—

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

I find it remarkable that those opposite regard the events of the last 12 months and the gravity of the global financial crisis, which has torpedoed the superannuation earnings of so many Australians, as something worthy of amusement. The President also looked forward to the challenges ahead. He spoke of the fundamental challenge of reshaping the global financial regulatory system to prevent history from simply repeating itself. He went on to say, and this is in the President’s own words:

We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.

Those are the words of the President. Through American leadership the G20 has been working since its first meeting in Washington at the end of last year on this important reform project. At the London summit the governments of the G20 committed themselves to a global action plan on financial regulation covering capital adequacy regimes, the regulation of systemically significant institutions, the regulation of credit-rating agencies, the regulation of short selling, the reform of the derivatives, cross-border supervisory colleges and the regulation of executive remuneration. That work will continue when the G20 summit again convenes in Pittsburgh next week.

Australia’s financial system has been resilient through the crisis. This has been aided by the government’s sovereign guarantee to all Australian deposit holders, for the first time in Australian history, to underpin the stability of our financial system—and also underpinned by the government’s guarantee of wholesale term funding, again for the first time in Australia’s history. Of the 100 largest banks in the world only nine remain AA rated or above today. Four of these banks are Australian. But we cannot rest on our laurels, because the Australian financial sector is in fact deeply integrated with global markets and therefore must be part of the global reform effort.

Today, and I assume honourable members opposite will join me in this as well, we pay tribute to the work of the Australian Treasury, the RBA, APRA and ASIC—because through these institutions Australia is participating in the most ambitious overhaul of the global financial regulatory architecture since the end of the Second World War. But there is much, much more work to be done through the agency of the G20 and the Financial Stability Board. Through the FSB Australia’s voice is now stronger than before. Australia’s representation on the FSB has now been increased from one to two members and includes both the RBA and the Treasury. Through APRA we have also now, for the first time, secured a position on the 12-member Basel Committee on Banking Supervision. Furthermore the FSB’s membership has now been virtually standardised to that of the G20.

Finally, overnight the President commended the role of the G20 in responding to the global financial and economic crisis. He said the G20:

… has proven to be an effective forum for coordinating policies among key developed and emerging economies …

Importantly, the President of the United States also noted for the first time that the G20 was an institution, and I quote him:

… that I see taking on an important role in the future.

As the former Treasurer, the member for Higgins, has already observed in this place, there are many in the world who would not necessarily argue for a robust future for the G20. The G20’s future as a key part of the architecture of global governance is by no means a done deal. Nonetheless, Australia welcomes President Obama’s statement on the future of the G20 and America’s continued leadership through the G20 into the future.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Pyne interjecting

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Mr Crean interjecting

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

Order! The Minister for Trade and the Manager of Opposition Business can have an early mark if they continue. I doubt whether they will join each other for a cup of tea.