David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise to support the Australian taxpayer. Accordingly, I oppose the Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014. The Export Finance and Insurance Corporation, known as Efic, is a government-owned bank and insurer. Efic provides loans for exporters of capital goods, which represent five per cent of exports. This bill would allow Efic to provide loans for export transactions involving all goods, not just capital goods. As such, this bill represents a massive expansion of government-owned banking.

Government-owned banking is not a great idea. The Treasurer put it nicely when he introduced a bill to abolish another government-owned bank, the Clean Energy Finance Corporation. He said:

Setting up a government bank with $10 billion of borrowed money, underwritten by taxpayers, to invest in high-risk ventures should be a thing of the past century. You would have thought that the Labor Party would have learned its lessons when it comes to government banks.

What the Treasurer was referring to came from the collapse of the State Bank of South Australia and the State Bank of Victoria. In both of those instances, the decision of governments to dabble in inherently risky lending caused considerable losses for taxpayers. That includes mum-and-dad taxpayers who, unlike mum-and-dad shareholders, never have the choice of withdrawing their money.

For a while, it seemed that Labor did indeed learn this lesson. When Labor was in government it asked the Productivity Commission to consider whether Efic's mandate should be extended to all exports—the very issue we are debating today. The Productivity Commission found that there is little evidence of a market failure in export finance that would support a role for government in export finance. The commission explicitly recommended that Efic's mandate not be extended to all exports. The Labor government at the time—2013—wholeheartedly agreed with this recommendation. Fast forward two years and Labor has a new position: to support the extension of Efic's mandate to all exports. It is bewildering, it is unprincipled and it is thoroughly disappointing.

One would have hoped that the coalition would reduce rather than increase the role of Efic too. After all, not only have they tried to abolish the Clean Energy Finance Corporation but they established the National Commission of Audit, which came to the following conclusion about Efic:

As noted by the Productivity Commission, virtually all of Australia’s exports by volume and value take place without EFIC’s assistance. Support provided by EFIC has mostly been directed at a small number of large businesses, including major resource projects.

There is no convincing evidence of systemic failures in financial markets that impede their access to finance. In recent years EFIC has earned most of its income through the investment of surplus funds and its capital and reserves, not the provision of financial services.

The Commission considers that EFIC should be abolished as there is little evidence of genuine market failure in the provision of export finance.

Given this, it is disappointing that the government is expanding the role of this government-owned bank for a handful of exporters. It goes to show that a vote for the coalition is a vote for the status quo, where corporate welfare goes to the few and is paid for by the many.

This bill before us today again shows that Labor and the coalition are the option for lazy voters who want lazy government. For those voters who want the government to let us go about our lives without the risk of bank collapses hanging over our heads to soak up our taxes, the only option at the ballot box is the Liberal Democrats or, in New South Wales, the Outdoor Recreation Party—a sister party. For every parliament and every election across Australia it needs to be out with the old and in with the new.