Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Hansard source

I seek leave to move a motion of censure against the Prime Minister and the Treasurer.

Leave not granted.

I move:

That so much of the standing and sessional orders be suspended as would prevent the Leader of the Opposition moving immediately—That this House censures the Prime Minister and the Treasurer for their inept and incompetent economic and financial management since coming to office, and in particular:

(1)

failing to re-act responsibly and effectively to the global financial crisis;

(2)

establishing an unlimited free deposit guarantee scheme which, in the words of the Reserve Bank Governor himself, “is creating … serious dislocation in the financial system”;

(3)

ignoring the warning of the Reserve Bank Governor when he wrote to the Treasury Secretary last Friday that “we have been going around and around on this but I think we need to get something out to the markets soon”;

(4)

expediting the passage through the Parliament of a deposits guarantee law which at the very moment the Treasurer delivered his second reading speech he knew, but did not say, was misconceived and in need of drastic amendment;

(5)

announcing in the course of Question Time yesterday a new deposits tax which would impose a massive cost increase on Australian banks, a cost they would seek to recover by increased interest rates and fees;

(6)

when the global financial instability became a crisis, failing to directly consult the Governor of the Reserve Bank of Australia on a central element of the Government’s response which falls directly within the Governor’s responsibilities because it affects the systemic stability of Australia’s financial system;

(7)

right from the beginning of this year consistently putting its short term political strategy ahead of responsible economic management by talking up inflation and talking down the economy in the early part of 2008;

(8)

undermining business and consumer confidence and increasing inflationary expectations thereby causing the Reserve Bank to increase rates; and

(9)

attempting to run the Australian economy on the basis of the 24 hour news cycle, causing him to develop policy on the run without due proper evidence, proper analysis, and proper consideration.

What we have seen today is an urgent need to debate this issue. We have been calling on the Prime Minister to come into this House and debate his mismanagement of our economy. We have asked him to come in here to give a ministerial statement, to have a debate. We have sought to hold him to account and all we have had is one stunt after another, one picked fact after another, one grand gesture after another.

We saw that on 12 October a momentous decision was taken to guarantee all of the deposits in Australian authorised deposit-taking institutions without any cap. This is almost without precedent in the world. The Treasurer said in the House the other day that Germany had the same unlimited deposit guarantee. Well, they do not. Their deposit guarantee is limited to private accounts. The deposit guarantee the Prime Minister announced was completely universal and it was inevitably going to create severe dislocation and distortions in the market, so much so that by the Treasurer’s own say-so we know that by the Wednesday, less than 72 hours after it was announced, he was already, according to him, getting ready to change it, getting ready to install a cap. We have had the most slippery performance about that cap, trying to debate the difference between a cap and a threshold.

What we have seen plainly is that any deposit guarantee will distort the market to some extent. If you provide some classes of funds or some classes of institutions with a guarantee they obviously have an advantage that others do not. That is why around the world deposit guarantees are set at levels that are designed to provide security and comfort to households and small businesses. That is why in the United States for many years it was $100,000. It has been raised to $250,000. In the UK is £50,000 and so forth. On the Friday previously, given what was clearly an increasing flow of funds to the big banks, we recommended that the deposit guarantee proposed by the government and supported by us in these times be increased from $20,000 to $100,000.

The response was a classic hollow men panic. After meetings over the weekend, instead of coming to a level, a cap, that was a reasonable one calculated to pick up household and small business accounts, what did we get? We got an unlimited guarantee. We have seen what it has done. We have seen cash management funds and institutions that are not covered by the guarantee losing money to those guaranteed institutions. We have seen some funds putting a stop on redemptions. We have seen people with their savings frozen and we know that within days the Reserve Bank of Australia was saying, as I stated in the motion, ‘We have been going around and around on this’—this was on 17 October—‘but I think we need to get something out to the market soon.’ It is 23 October and nothing has gone out to the market.

We see the absurd manner in which the Treasurer in his extraordinary incompetence announced yesterday a new tax. He answered a very clear, very simple comprehensible question: was the new deposits fee going to be compulsory? He said that it will apply to all deposits over the $1 million mark and it will be paid by either the bank or the depositor. He repeated that. He said he did not apologise for it being compulsory. He said he was not going to give the banks a free kick—not the Treasurer; he was not going to do that. The Prime Minister endorsed him. Then, when we asked the Prime Minister today another clear question, ‘When is the starting date of this deposit tax going to be announced?’ we got a 10-minute-and-six-second ramble and not one fact—not an answer to the question. He did not disown the compulsory deposit tax at all. He did not throw the Treasurer to the wolves. That is probably touching for the Treasurer. But then, in a subsequent answer from the Treasurer today, there were little weasel words slipped in. So now there is a bit of doubt whether this deposit tax will be compulsory—whether the deposit fee will be a tax at all.

The fact of the matter is that we know that this agenda has been driven by a media strategy, a political strategy, and nothing else. You can see that at its height in the nearly two hours of the time of this House that was taken up today with the absurd motions from the member for Grayndler. The Prime Minister loves to talk about leaving no stone unturned. It might be better to say, in his case, he leaves no cliche unuttered. One of his favourite cliches today is ‘letting loose the dogs of war’. There is no snappier dog of war than the member for Grayndler, and he was in here, full of indignation, taking up two hours of the parliament’s time because he was concerned about the reputation of Dr Henry—so it was said. The record shows I did not call for Dr Henry to be dismissed. I spoke as warmly of Dr Henry as his greatest admirers could, and yet we had the ridiculous—indeed, tragic—example of this government, led by the ultimate control freak, proceeding with a motion not by the book, not by the standing orders, but by The Little Red Book of Chairman Mao.

The government have a resolution, passed with their majority, calling upon a member of parliament to say certain words. They have not censured the Leader of the Opposition. They have not condemned the Leader of the Opposition. They have passed a motion to say that the Leader of the Opposition should utter certain words. That is certainly by the book. It is not the standing orders. It is not the Magna Carta. It is not the Constitution.

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