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

These are the matters that I, the Treasurer, the Secretary to the Treasury, together with the Governor of the Reserve Bank, in different conversations, were discussing earlier today. Let me go to Australia’s commercial banks. Our advice is that the exposure by the Australian commercial banks to Lehman Brothers is modest. In relation to other entities within the Australian economy, referring to different levels of government, I am unaware at this stage of any particular exposure. But should other matters come to hand, given that these are recently occurring developments, then of course we will keep the House apprised.

I would say, however, to all members of this House that, as the government has said consistently throughout this global financial crisis, it is very important to be upfront with the Australian people about the extent of the challenges coming at us from the global economy. We have been saying that day in, day out at the dispatch box since the beginning of the year. At the same time, it is very important to be mindful of the underlying strengths of the Australian economy. The underlying strengths are the balance sheets of the Australian commercial banks, the strength of our regulatory system and the fact that the exposures to most of the difficulties which have occurred in the United States in relation to Australian private financial institutions to date, based on the information we received, have been modest.

It is important therefore to keep the crisis in context, to acknowledge its reality, to acknowledge that Australia is part of the global financial system and therefore is not immune. At the same time, with one voice, all responsible politicians and leaders in this place should reassert and assert continually the underlying strength of the economy, critical as that is for the continued confidence of our institutions.

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