Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Hansard source

I beg your pardon? The minister for finance just said that this is not a monetary policy. The unlimited bank guarantee is monetary policy. It is not fiscal policy; it is not regulatory policy; it is monetary policy. And that is why the Reserve Bank’s advice should have been sought. You ought to speak to the Reserve Bank about this, Minister for Finance and Deregulation. This is monetary policy.

The minister for finance was sitting around that cabinet committee table and, according to the Prime Minister, when a decision was made by the collective genius of the minister for finance, the Minister for Education, the Prime Minister and the Treasurer—on the phone from New York—to have an unlimited bank guarantee for some institutions in Australia and exclude others, the Prime Minister turned to the Secretary of the Treasury and said, ‘Is this the advice of the Reserve Bank?’ or words to that effect, and the Secretary of the Treasury said, ‘Yes.’ And not one person around that table asked: ‘What, is there no downside to this? Is there no risk? Are there no consequences for the segment of the market that will be excluded from this unlimited guarantee?’ Not one person sitting around that table said, ‘Hey, perhaps we’d better pick up the phone and speak to the Governor of the Reserve Bank to hear from the man in charge of monetary policy in this country’—the man who has responsibility for the systemic stability of the financial system in Australia. No-one said, ‘Perhaps we should ask his advice as to whether or not there’s any downside, any risk or any consequence to the financial markets in Australia.’

I challenge the minister for finance to name one occasion when a cabinet of this country, in, let’s say, the last 15 or 16 years, has made a significant decision on monetary policy and not sought the advice of the Reserve Bank governor and had him either physically in the cabinet room or on the line—

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