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

The first point is that it is necessary to ensure the future stability of the financial system. In particular, it is necessary to ensure that our banks remain capable into the future of raising commercial loans on the international credit market. That is the first responsibility. As I indicated in my answer to an earlier question, it has been important for us to take that action now, in particular when there was a danger of our institutions being seen in a different light to those of other institutions because of sovereign guarantees provided elsewhere. Secondly, as I have indicated in my answer to the honourable gentleman’s question, each of these institutions will be charged a fee. The fee will ensure that taxpayers receive appropriate compensation for providing the guarantee and that financial institutions pay a price for the benefit of the guarantee. Furthermore, the fee will also ensure that the facility is no longer utilised when market conditions normalise, as was reflected in my statement yesterday. This will help to support the future recovery and the operation of financial markets independent of government support. In other words, the construction of the fee will be done in a manner which encourages not just responsible behaviour of financial institutions in the international credit market but also the non-use of that instrument in the future once credit conditions normalise. The precise detail of the fee and its arrangements will be tailored accordingly.

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