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

Mr Speaker, I second the motion moved by the Leader of the Opposition. The consequences of the Prime Minister’s hasty and ill-considered decision to provide an unlimited deposit guarantee are not abstract. The consequences have been felt by Australians across this country every day since 12 October, and that is why we need to debate this matter now in this House. The Prime Minister has refused to come into the House in accordance with precedent to give a prime ministerial statement on one of the most important and significant decisions that a government has made in a long time. This Prime Minister has refused even to grace the parliament with his presence to speak about the decision made on 12 October which is now having such serious consequences in financial markets across this country.

This decision has caused massive confusion in the financial markets. As of 12 October, when the Prime Minister announced his unlimited guarantee on bank deposits, there has been a massive movement of funds from those excluded from the guarantee into those institutions that are included in the guarantee. Let me take one example that was provided in evidence today to Senate estimates by officers of APRA. They were asked about the fact that the government’s decision has created two classes of institution within the APRA regulated, authorised deposit-taking institutions. What the government has done is exclude the foreign bank branches. Foreign bank branches are APRA regulated, they are authorised deposit-taking institutions, yet the government has excluded the foreign bank branches from their unlimited guarantee. Guess what has happened? This is evidence from APRA officers. As of 13 October, billions of dollars of funds have moved from the foreign bank branches that were APRA regulated, authorised deposit-taking institutions under the laws of this country and have moved into the banks included in the government’s guarantee.

We are not talking about abstracts here. We are not talking about some foreign investments here. What we are talking about are the funds, the investments and the savings of ordinary Australians. These institutions hold aggregate funds. They hold pools of investments and savings from mums and dads, small businesses, superannuants and self-funded retirees across Australia and, because these banks were left out of the guarantee, they believed that they could offer the confidence to these people that banks with the guarantee could offer, so they have moved billions of dollars of these people’s money into those banks included in the guarantee. But what happened yesterday? At 2.23 pm the Treasurer, in answer to a question about a fee he had mentioned the day before, announced a new and compulsory deposit tax on all the deposits that are now in the banks included in the guarantee. He was not talking about a fee in his second reading speech; that is rewriting history. He did not mention a fee in his second reading speech on 15 October. The Treasurer made a fundamental mistake, of course, as he has in so many answers to so many questions. He said it would apply to all deposits in APRA regulated institutions, but in fact he forgot that he had already excluded some APRA regulated, authorised deposit-taking institutions from his guarantee.

We have now got billions of dollars of funds that have flowed in since 13 October into the big four banks in particular and other banks. The Treasurer announced a new tax. I have now been contacted by asset managers who say they want to take the money out of the big banks because they do not want to attract a fee which would be passed on to their deposit holders. They want to take the money out of the bank. Is that an intended consequence—to take deposits out of the big banks? Was that an intended consequence of the announcement of a new tax or are these people stuck with paying the tax that was announced at 2.23 pm yesterday?

The Treasurer has not resiled from that. The Prime Minister took 10 minutes to answer a question and not once did he say that this tax was not compulsory, nor did he say that it would not apply from 2.23 pm yesterday. So the Australian public must assume that they will be subject to this new tax on their deposits. They were told that the guarantee was going to be free of charge; they now find that their savings will be subject to a new tax. I ask the Prime Minister: does this mean that the savings of ordinary Australians will now be diluted by the fact that they must pay this tax? (Time expired)

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