Jason Clare (Blaxland, Australian Labor Party) Share this | Hansard source

Never let it be said that the member for Cook ever goes over the top. The debate on the Australian Business Investment Partnership Bill 2009 and its cognate bill really encapsulates the way the Liberal Party think and really encapsulates Liberal Party philosophy. On 26 January every year most people wake up and think about what it means to be Australian, but for those of us with a political bent 26 January this year meant something different—we woke up, picked up our copy of the Australian and found on the front page the headline ‘Turnbull says let market decide’. It said, ‘Turnbull says let the market take its course.’ It is central to Liberal philosophy: let the market decide and let the market take its course. As the member for Cook just showed us, not just does it apply to the economy and not just does it apply to these bills; it applies to everything they say and do in this place—whether it is Work Choices, whether it is climate change or, for that matter, whether it is the collapse of ABC Learning. If the last few months have shown us anything, it is that this is the wrong approach.

Australia does not have the same problems with banking and with toxic assets that you will find elsewhere in the world, but that does not mean we are insulated from the problems that have beset the world. Some 40 banks around the world have already hit the wall and, as a consequence, some of those banks will stop lending here to focus necessarily on the home front. Australian businesses have exposure to these banks. Total bank debt in the commercial property sector is about $165 billion, and 18 per cent of this—or $30 billion—is financed by foreign banks. Some $70 billion worth of commercial loans have to be refinanced over the next two years and there is a real risk that some of these foreign banks could pull up stumps when commercial agreements are due for renegotiation.

An hour or so ago the Leader of the Opposition said that there was no evidence of foreign banks pulling out or reducing their exposure in Australia, but that is not what the Property Council of Australia says. Last week the Property Council said:

The Property Council has this week surveyed its members and they report that over 20 foreign banks from Europe (43%), USA (26%), and Asia (31%) have signalled plans to reduce their exposure to Australian commercial property funding, or have already withdrawn funding.

When you get information like that, you do not sit by and wait and see—you do not ‘let the market take its course’. I think it is important when you get information like that that you take action, because, as the Property Council said in the same statement, ‘Domestic banks in Australia can’t fill that void if it opens up.’

The Australian Business Investment Partnership Bill is designed to make sure that good commercial property projects do not fall over—and as a consequence people lose their jobs—for want of finance. Projects that are currently under construction fit within the scheme; so do projects that are already up and running. The bill establishes the Australian Business Investment Partnership—a partnership between the government and four banks that offers refinancing on commercial terms with a focus on commercial property investments like retail shopping centres, commercial offices and industrial property. Investment decisions are subject to strict criteria. Funding is only provided if there is the unanimous support of the board, comprised of all four banks plus the government. The banks also have skin in the game, which is different to the way schemes like this have been set up overseas, in Europe and elsewhere. They have to put in equity upfront and they have to continue their partnership in any loan facility that is extended as part of the scheme. Ian Harper from Access Economics, a noted leading conservative economist, had this to say about the scheme: it is an extraordinary bill for extraordinary times.

In normal times the government ought to have no business lending to property or anything else but these are extraordinary times. The great fear is that if owners cannot roll over existing borrowings they will be forced to start selling assets and that is the source of the conflagration that this initiative is designed to avoid. If there is a major collapse in asset prices in the commercial property market, that could feed through into domestic housing. Given the exposure of domestic banks to housing, that is what we are trying to avoid at all costs.

The important thing to stress is that this is a temporary contingency measure—it has a shelf life of two years—to avoid a fire sale of assets and a collapse in confidence. If you do not believe what I have to say, have a look at what the Master Builders Association said or, for that matter, what the Governor of the Reserve Bank had to say. They said the same thing: that this is designed to avoid a fire sale of commercial property and with it the potential cost of tens of thousands of jobs. This goes to the heart of the matter: should government be in the business of letting the market take its course or should it step in to protect jobs and protect confidence in the commercial property market?

My view is that, in these extreme times, the type of times that have been described so appropriately by Mr Harper, the government should act. The government should be involved. They should not wait and see. They should not let the market take its course. The opposition leader dismissed the need for the fund. He argued that others will swoop in and pick up property and everything will be business as usual. But, again, that is not what the Property Council had to say. In the same statement they said:

ABIP will safeguard:

• Construction jobs
• Australia’s superannuation wealth
• Housing and social investment

               …            …            …

• Mum and Dad investors—

and, quite importantly, because the member for Cook had something to say about this—

• Small business and employment in general …

The same people that the opposition claim to be defending in the Senate in the debate about unfair dismissal laws, they do not seem to care about in this debate.

Small business people are the people that the member for Higgins, in the party room last week, said were the ‘arms and legs of the Liberal Party’. They seem to be quite willing to cut off the arms and the legs of small business here in this debate. It reminds me a little bit of that old Monty Python skit—‘nothing but a flesh wound’. But this is more than a flesh wound. It can seriously harm jobs, not just in the bigger end of the commercial property market. As the Property Council says so appropriately in its statement, there is a risk that it could hurt businesses, confidence and jobs all the way through the economy.

The truth is that there are a lot of companies, both big companies and small companies, that are very worried about commercial projects falling over at the moment. You are not going to hear them speak out in this debate. You are not going to read about them in the newspaper, because they are concerned about a run on their share price—and appropriately so. But anybody who has been close to this bill or close to this debate would know that that is the case. That is why industry has been busy in this building lobbying the opposition, urging them to back this legislation. Unfortunately, they are banging their heads against a brick wall, because this is inconsistent with Liberal ideology. It is inconsistent with the idea that the market should take its course. That idea underpins everything that the Liberal Party stands for, whether it is this bill, tackling the global economic recession, Work Choices, climate change or, as I said earlier, childcare policy.

We have seen a lot of pretending over the last 12 to 15 months. The opposition have been pretending they care about pensioners—remember the days when the cans of fruit were held up at the dispatch box?—pretending that Work Choices was dead and pretending that they care about climate change. But slowly the mask is coming off around here. Slowly the Liberal Party is reverting to form. You see that from comments by the member for Warringah, who now says that we cannot afford to pay pensioners an increase. You see it in the statement by Senator Fifield that Work Choices should not be killed off, that it is an article of faith that the Liberal Party should defend to the death. You see it in what the Leader of the Opposition said himself when he stood before the party faithful on the weekend and said, ‘Government is the problem, not the solution,’ and when he said that the most effective economic stimulus is more freedom. It sounds a little bit like Ronald Reagan. It sounds a lot more like George W Bush before and after Lehman Brothers collapsed. Slowly the mask is coming off. Slowly the real Liberal Party is being revealed in this place again—the same old conservative party with the same old conservative values. It does not matter whether it is the global recession, Work Choices, climate change or industrial relations, the approach is the same: do nothing, do not interfere, let the market rule and let the market take its course.

What you see in their statement of 26 January applies to everything that this opposition say and do in this place. It is the merchant banker approach to running the country: ‘Let the market take its course. Don’t regulate carbon pollution, don’t regulate for good wages and conditions and don’t intervene when the market fails. Government is the problem, not the solution.’ Unfortunately, everything that we have seen over the last six months tells us that this is the wrong approach. There is a role for government. There is a role for government in cutting pollution. There is a role for government in making sure that workers have rights and conditions that are complied with. There is a role for government in acting when the market fails—and that is exactly what this bill does—to protect jobs and to restore confidence to the market. I support this bill, because that is exactly what it does. I commend the bill to the House.

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