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

in reply—I would like to thank those members who have taken part in the debate on the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Bill 2008, the Financial Claims Scheme (ADIs) Levy Bill 2008 and the Financial Claims Scheme (General Insurers) Levy Bill 2008. I do not have much time because we do need to get the bills through tonight and some time has just been wasted by the previous speaker talking about other bills, which has further contracted my time. The urgency here in dealing with the substantive issues is to actually get the bills through so I will now not have time to make some of the comments that I would otherwise have done given the urgency of these bills.

These bills do represent unprecedented action to deal with developments in global markets and to ensure the stability of the Australian financial system. These bills give effect to the Prime Minister’s announcement on Sunday that the government will guarantee the deposits of Australian banks, building societies and credit unions and Australian subsidiaries of foreign owned banks. In addition to the Financial Claims Scheme, the bills also introduce a number of other measures that will enhance and strengthen Australia’s regulatory framework for managing financial institutions in distress.

We are witnessing a global financial market crisis of historic proportions. Confidence is fragile following the failures of a number of large international institutions, which has caused significant dislocation in global equity and capital markets. Fortunately, Australia’s financial institutions do not have significant exposures to troubled assets in the US or, like US and European financial institutions, to troubled mortgage related assets. This was confirmed recently by the IMF in their Article IV report and by the RBA at its Financial stability review.

This legislation has been made necessary by events external to this country. This is very important legislation and it certainly does deserve the full support of everyone from both sides of the House. It is legislation which is implementing the commitments that we made way back earlier this year. It is legislation that was recommended by the regulatory authorities and that we have discussed with the Australian Council of Financial Regulators. This bill is historic and it comes at a time of the biggest ever threat to the modern market economy. So I certainly welcome the willingness of the House to consider this bill today, for it is vital that we ensure the Australian people can have confidence in their deposits in the financial sector. The measures in this bill will give confidence to ordinary Australians in our financial markets. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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