Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I was asked to update the House on recent developments in financial markets and their implications for Australia. We have continued to see volatility on global financial markets overnight, with Wall Street falling 3½ per cent. US authorities are continuing to work on a solution to the bad debts in the US that are at the heart of the problem, which is of course the US subprime problem. The action by US authorities will build on recent coordinated action by central banks and regulators worldwide, including our own, to increase liquidity and to crack down on short selling. These global difficulties will continue to impact on confidence in share markets around the world and they are most certainly slowing the global economy.

Honourable members would be aware that the largest developed economies are all struggling to grow. The UK, Japan, Germany, France and Italy all recorded zero or negative growth in the three months to June this year. So we should not be surprised that these global problems, together with something like 10 interest rate rises in a row under the Liberals, are slowing our economy.

Of course, we have been upfront about all of these things from the very beginning. In our May budget we recognised that the combination of slower global growth, tighter credit conditions and high interest rates would slow growth and that this slower growth would have flow-on effects on the labour market. The turbulence in global financial markets is also impacting on our share market and superannuation returns. We understand that this is creating considerable anxiety in our community, particularly for retirees reliant on super as their primary income.

So we are not immune from these global difficulties, but we are certainly better placed than most countries to weather the storm. This is one of the reasons why we do need a significant budget surplus—to act as a buffer against the global uncertainty. The new shadow Treasurer has a chance to turn over a new leaf, understand the importance of the surplus in these circumstances and get her party to change their tune in the Senate so that we can protect the surplus and have it there as a buffer against these uncertain conditions. But I somehow get the impression from the behaviour of the Leader of the Opposition and others that this is not going to happen. It has been a pretty bad 24 hours for the shadow Treasurer. It is a tough job, being a shadow Treasurer—particularly now she is on the front bench with a leader who is pretending to have economic credibility.

We have had a lot of criticism from those opposite about economic management. Yesterday, I listened quite intently to the member for Curtin’s response to my ministerial statement. One part of that statement stood out. This is what she said in her response to my ministerial statement yesterday:

The proposal would give the Treasury Secretary significant leeway and flexibility in buying, selling and holding residential or commercial mortgages as well as any securities, obligations or other instruments that are based on or related to such mortgages. Among the things the US government is asking for is the authority to hire asset managers to oversee the buying of assets.

That is quite an insightful piece of analysis. The thing was that it sounded familiar to me. It did ring a bit of a bell. And now I know why: because it was from an article in the Wall Street Journal of 20 September. Very insightful! If I could just quote from the Wall Street Journal article of 20 September:

The proposal would give the Treasury secretary significant leeway in buying, selling and holding residential or commercial mortgages, as well as “any securities, obligations or other instruments that are based on or related to such mortgages.”

And, earlier in the same piece:

Among the things the government is asking for is the authority to hire asset managers to oversee the buying of assets.

Now, I have taken advice from many quarters, but I have never stolen something directly from the Wall Street Journal and I have never passed it off as my own wisdom! I think following this that the member for Curtin will be forever known as the shadow minister for plagiarism—the Helen Demidenko of Australian politics! Two gaffes in 24 hours—that is quite a start from people who are lecturing others about competence and standing in the community. This comes from people who are strutting around, not caring about interest rates and showing all sorts of pretences instead of understanding what is going on in the economy and the community. I think the Leader of the Opposition might now be regretting his decision to exclude the member for Goldstein from the position of shadow Treasurer. He certainly could not do any worse.

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