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

I thank the member for Forde for his question, because the government is committed to protecting all depositors in these uncertain times. Following our announcement on 12 October, we have seen a marked improvement in the operation of financial markets, with spreads falling, resulting in cuts in mortgage rates. This morning, I think, in estimates, Dr John Laker, from APRA said: ‘The government’s deposit term in funding guarantee, which APRA fully supports, has calmed what was a growing disquiet on the part of depositors.’ When the second reading legislation was introduced into the House, I made it very clear to the House that finetuning would take place in the days ahead. That is of course what has been happening. That is what the RBA, APRA and ASIC have been doing. It is what the government have been doing. We have been consulting widely on this question and continuing a series of consultations through today and tomorrow on all of these matters with banks, building societies and credit unions; with financial markets participants; and with those institutions that are not covered by the government guarantee. We do take our responsibilities very seriously, and we are liaising very closely with all of our regulators. We are doing this to ensure deposits are protected and to ensure the ongoing efficient operation of financial markets.

As for the details, which have been the subject of some comment—the level above which large deposits will be treated as wholesale funding, how much the fee will be, how a fee will be structured, whether it would be flat, whether it would it be tiered, who would pay and whether it was compulsory or opt in—all those things have been on the agenda, and all of these things which have been on the agenda have been highlighted by me both publicly and in the meetings with regulators and with industry. These are commercially sensitive matters. This is where the opposition really do not get it. This material is commercially sensitive. It has been worked out thoroughly. It has been worked out in accord with the wishes of our regulators. It has been worked out with industry. We will reach a sensible conclusion in a timely manner in the interests of a stable financial system.

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