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

That is what he said. We have got a copy of the transcript. They did not want the transcript tabled, because of course that transcript does not appear on his website.

The government then came up with another madcap idea and decided that they would tell those institutions that were not guaranteed that they should inquire of APRA how to become a bank—how to become a bank, a building society or a credit union. What kind of public policy is that? And then, finally, the government requested that ASIC provide advice on how to assist hardship cases where redemptions from funds had been frozen. There were so many adverse consequences of that hasty announcement made on 12 October.

Consistently, the Leader of the Opposition called on the government to implement a cap on the unlimited bank deposit guarantee. Our recommendation on 10 October was that it should be at least $100,000. If that advice had been followed, the government would not have found itself in the mess that it has, people would not have had their funds frozen and the dislocation in the markets would not have occurred. We said the cap should be set at a level that the Reserve Bank recommended. We know that the Reserve Bank says ‘the lower, the better’ and we know that the senior executives in the major banks have suggested $100,000—the CEO of Westpac has suggested around $100,000. The Leader of the Opposition also pointed out that the Treasurer’s plans to establish this compulsory guarantee fee for deposits over the cap—in other words, the tax—should be abandoned, and we pointed out that a tax would impose additional, heavy and unnecessary costs on banks.

The Leader of the Opposition also pointed out that guarantees of any deposits over the cap should be optional but subject to a fee. Eventually, the government came around to that thinking and made it voluntary. Specifically, the Leader of the Opposition informed the government, as he has on so many occasions over the last six weeks, that the wholesale term funding guarantee should be the subject of legislation, because the government was putting the Commonwealth and thus taxpayers on the hook for, potentially, hundreds of billions of dollars of contingent liabilities—without any legislation. That is an affront to our parliamentary democracy.

Senator Sherry, I believe, said in a speech on 30 October that the deposits covered by the unlimited guarantee amounted to about $800 billion and that the wholesale fundraising amounted to about $1.2 trillion—in total, about $2 trillion. Yet, in the Mid-Year Economic and Fiscal Outlook, the Treasurer was not able to put any figure at all on that. He was not able to quantify, in any form whatsoever, the contingent liability of these guarantees. Senator Sherry was able to do it; he said it was about $2 trillion. Now, couldn’t the government have worked out a contingent liability, to put a figure into the Mid-Year Economic and Fiscal Outlook?

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