Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thanks Senator Hutchins for that question. Yesterday I informed the chamber that the IMF article IV report on Australia, released on 23 September, strongly endorses the government’s economic policy. In its report the IMF provided support for the government’s view that, while we are not immune from global difficulties, the Australian economy is well placed to survive and to meet these challenges.

I would take this opportunity to inform the Senate that the Reserve Bank of Australia this morning released its half-year Financial stability review. As I have said many times in this chamber, the current global economic conditions are some of the most challenging and difficult in more than a quarter of a century. The Reserve Bank, like the IMF, concurs with this view:

The operating environment facing many financial institutions around the world, particularly in the United States, is more difficult than it has been for many years.

Importantly, though, the Reserve Bank’s Financial stability review adds even further weight to a point I have consistently made in this chamber many times—that is, while we are not immune we are well placed to withstand the fallout. The RBA notes:

While the Australian financial system has not been completely insulated from developments abroad, it is weathering the current difficulties much better than many other financial systems.

The Reserve Bank also highlights the strength of our financial system, noting again:

The banking system is soundly capitalised, it has only limited exposure to sub-prime related assets, and it continues to record strong profitability and has low levels of problem loans.