David Bradbury (Lindsay, Australian Labor Party) Share this | Hansard source

With bipartisan support. These are extraordinary events because these are extraordinary times. That is why the decisive action, which is reflected in the introduction of this Financial Claims Scheme and related measures, is so important in ensuring the confidence that we require in the marketplace so that mums and dads right around this country have the peace of mind to know that their funds are safe and that this government will do its level best to protect our financial system.

It has to be said that our banks are amongst the strongest in the world. They are well capitalised and all the advice from the regulators is that they are in a healthy state, notwithstanding the difficulties in interbank lending and the difficulties in accessing funds in international capital markets. They are in a good position. This is as good a place as anywhere in the world to be. That said, it is important that we take into account the need to provide that confidence. Considering the strength of the banks, it is, we hope—and all the evidence seems to point towards this—a very remote possibility that this guarantee will ever be called upon. But we have to make arrangements and the bills before us provide for some of those arrangements. In particular, in the event of an ADI requiring to call upon that guarantee, there will be arrangements in place to allow a levy to be imposed upon other participants within that marketplace to assist in finding the bailout as and when that might occur.

It is important to note that what is occurring here is not a bailout. It is a range of measures designed to provide confidence and reassurance to people right across our economy that funds will be safe in banks. In the end, what we have seen in recent days in the coordinated efforts not only of our regulators and our government but of governments and regulators in other jurisdictions is decisive action being taken, and we have seen some improvements, albeit that these are very early days, in terms of liquidity in international markets. So we can only hope that as time progresses markets become more liquid, providing banks with the funds that they need to loan to consumers and businesses. In the end, what is occurring in international financial markets might seem like an unreal proposition, but if banks stop lending to each other—if banks cease to be able to access the funds that they need—then they are not able to lend those funds to consumers or do so at competitive and reasonable rates, and the same applies to business. That is why it is critical that these measures be adopted.

In harmony with the other measures that the Prime Minister announced yesterday, with his decisive action in relation to the $10.4 billion stimulus package, these are the very measures that are needed to try and strengthen our national economy and support our household budgets to try and ensure that we are best placed—as well placed as we possibly can be—to confront the looming economic challenges. I support the bills.

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