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

Well, Senator Sherry was able to put a figure on it. As the Leader of the Opposition noted, even if the government believed it had a legal argument to enable it to give a guarantee without legislation, it knows it could never honour that guarantee without an appropriation bill being passed by the parliament, and yet week after week we had every excuse as to why the government did not have to put in an appropriation bill. We set out what the legislation should include. More information was provided on the administration of the guarantee scheme, but there is still very little to give the markets, to give the financial sector, to give the banking sector and, more importantly, to give the Australian public any confidence in this government’s policies.

As for acting ahead of the curve, again, on 13 November, the government said they would not introduce legislation. The government indicated through the acting Treasurer and the Attorney-General, in response to specific questions from the Leader of the Opposition, that the government did not intend to introduce legislation. That is what the government said on 13 November. On 17 November, the Leader of the Opposition again called on the government to immediately present legislation to authorise the provision of wholesale term funding guarantees to Australian banks. He warned, quite properly, that without legislation the guarantees would not be effective commercially or practically and he asked that the legislation be circulated so that the opposition could comment on it. On 21 November, the Leader of the Opposition again repeated his call for the government to present legislation to provide for an appropriation to give effect to the wholesale term funding guarantee and to wind back the unlimited bank deposit guarantee. By that time the banks were sending the clearest message to the government that it must fix its bungled wholesale term funding and bank deposit guarantees. It was six weeks ago that the coalition called on the government to introduce this legislation.

Confronted with the real impact of its panicked and poorly thought through decisions, the government refused to acknowledge or immediately rectify its mistakes. What is wrong with the government just saying, ‘The Leader of the Opposition is right, actually; we do need an appropriation bill—otherwise the guarantee will not be “unconditional, irrevocable and timely”, in the words of Standard and Poor’s’? Why could the government not bring itself to admit that it got it wrong and that in fact what the opposition, through the Leader of the Opposition, had been calling for was appropriate and responsible advice? Because the Labor government’s bank guarantee has been all about politics. There was no focus on sound economic management and no focus on appropriate public policy. Over one weekend, in a series of long-distance calls between the Prime Minister and the Treasurer—calls that did not include the Reserve Bank governor—this government produced a flawed bank guarantee policy. They did not bother talking directly to the Reserve Bank governor before unveiling it. They did not bother to take account of the Reserve Bank governor’s advice before it was put in writing and made public.

Since the announcement of the bank guarantee policy, the government has been forced to announce a series of changes to paper over the cracks of this ill-considered policy. If the government had simply adopted the policies of the coalition and announced that, in accordance with other comparable countries, there would be a limit on the government guarantee, and if the government had just accepted the coalition’s advice that they needed an appropriation bill to give effect to the wholesale term funding policy, ordinary Australian investors and our financial markets would have been spared the six weeks of uncertainty and instability caused by the government’s ill-considered policy.

We support this long-overdue bill. We called for it six weeks ago. We cannot help but point out that, had the government accepted the opposition’s offer to work in a bipartisan manner in response to the challenges presented by the global financial crisis, the problems the government has experienced and the hardship and dislocation that has been caused to the Australian public, the banking sector and the financial markets in this country would not have occurred. We would not have seen funds frozen in these accounts to the extent that they have been. We would not have seen the massive dislocation in the financial sector as depositors moved money from one umbrella to another, not sure whether their institution was covered by the guarantee, not sure whether their account was covered by the guarantee, and all the time hearing the Prime Minister’s words: ‘These funds are guaranteed; therefore these funds are protected; therefore these funds are safe.’ By implication, the rest were not.

Had the government just taken up our offer to work with them in a bipartisan fashion, had the government listened to the suggestion that an appropriations bill was needed six weeks ago, none of this would have been necessary. But what is becoming a hallmark of this government is that it refuses to acknowledge its errors. It refuses to acknowledge that the opposition has a legitimate role in good public policy development in this country. The Deputy Prime Minister told us that we should get out of the way. The Treasurer said that we were completely irrelevant—the same Treasurer who has been resisting for six weeks the call to introduce an appropriations bill to give effect to the wholesale term funding guarantee. Today the Treasurer eventually caved in to the common sense being put forward by the opposition and introduced this bill. What a waste of time, all because of the arrogance and the incapacity of this government to admit its mistakes.

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