Jamie Briggs (Mayo, Liberal Party) Share this | Hansard source

I rise to very strongly oppose the Australian Business Investment Partnership Bill 2009 and related bill, because this legislation is an economic disaster in waiting. The member for Blaxland—a member who we will see step through the ranks of the government in the next few years to the frontbench; he is clearly on that train and one of the select few on that side who seemingly have a big future ahead of them—talked about our approach versus that of the Labor Party, the current government. In some respects, I agree with what he has to say, because the Liberal Party would never ever be associated with setting up a bank. This obsession that the Labor Party has with setting up banks is quite worrying. We hear constant references from the Prime Minister, the Deputy Prime Minister and the parliamentary secretary at the table, Ms McKew—and from the member for Blaxland just then—to the fact that the Leader of the Opposition was a merchant banker. The fact is that the government side all seek to become merchant bankers through this bill. They are obsessed with being bankers.

The Labor Party’s history with banks is quite extraordinary. I come from South Australia, a state that the Labor Party in government sent broke through a bank. Guess what they were involved in that sent them broke? Commercial building. It is quite extraordinary what is occurring here. As friends of mine know, I am a big fan of the Finn brothers, particularly Crowded House but also Split Enz, although they were a little before my time. I have to disagree with them, unfortunately: history does repeat. History is repeating here in this bill. It is an extraordinary development in Australian public policy that a federal Labor government would repeat the mistakes of history and delve back into not only banks but the commercial property sector. Let me remind the House what sent the state government of South Australia broke in the early 1990s. The State Bank of South Australia went under because of two major decisions by its government instrumentalities: the stunning, palatial 333 Collins Street, which the South Australian government decided to get involved in, and the Myer building in Rundle Mall, which it dropped a mere billion dollars on.

There is a great quote, from the time, from a senior executive at the State Bank of South Australia who I am indebted to—a very dedicated and hardworking author who wrote a book on the state bank. He said, ‘Well, we’ve just bet the bank on this one.’ He was dead right, and the bank went under and so did the state of South Australia for many years. They talk about jobs on the other side. Let us remind those on the other side that that resulted in double-digit unemployment rates in South Australia for many, many years. But history repeats and they are back in the business again. This is quite extraordinary.

These decisions by a Labor Party in government, in relation to banks, cost the state of South Australia $2.2 billion, cost Victoria $3 billion through Tricontinental and cost Western Australia God knows how much through WA Inc—which still has cases before the courts, as we were reminded this morning by Western Australian members. Labor governments do not make good merchant bankers and they do not manage banks well.

This bill seeks to shift the risk from the big four banks to the taxpayer. It is bad policy and it is trying to prop up the prices of commercial enterprises, and that never ever works. The member for Blaxland—again, someone in this place whom I have some respect for—commented upon the Liberal Party’s position on these matters. Let me remind him of his own Prime Minister’s com-plete and utter hypocrisy when it comes to the matter of the economy. We were reminded recently of a great segment in The Latham Diarieswritten by that former leader who some on the other side, more than half at one point, supported, particularly the Deputy Prime Minister, who was Mr Latham’s numbers man there for a while. Mr Latham says that, after the 2004 election, the Prime Minister, the then shadow foreign affairs minister, begged Mr Latham to make him the shadow Treasurer on the basis that he was a full-on economic conservative.

We then saw the ads—no doubt recommended by the Parliamentary Secretary for Early Childhood Education and Childcare, who is at the table, and by Senator Arbib—where Mr Rudd had to say that he was an economic conservative and cuddle up to the record of John Howard and the member for Higgins as close as he could in order to be elected. But, now he is elected, he returns to his true colours of being a democratic socialist. So do not stand here and tell us that we are all over the shop on these policies. The Prime Minister is the greatest hypocrite this country has ever seen.

This bill is a disaster. It is a disaster for the future of our country because what we will see is our country go into more and more debt, just as we have before. We already have a credit card with $200 billion available to it. This bill will add another $28 billion to be put on that credit card.

The government claims that it will only spend $4 billion—$2 billion of government money. But, truth be told, if you look at the bill it actually says—and I am indebted yet again to the Parliamentary Library and their hard work—that, if additional financing is required beyond this initial $4 billion, ABIP, or the Ruddbank, will be able to issue up to $26 billion of government-guaranteed debt to create up to $30 billion of lendable capital. So that is $28 billion in additional government debt that we will see because we know that, when Labor have the ability to borrow, they will borrow.

The Minister for Finance and Deregulation yesterday, in attempting to justify the Ruddbank in this House, said:

It does involve some exposure to risk on the part of the taxpayer …

Too right it does! Again, I refer back to my home state’s experience. The Labor Party sent the state of South Australia to the edge of bankruptcy by getting themselves involved in commercial property decisions. And where are we back to again? We are back to the same group of people making the same ill-fated decisions yet again. I wonder how many Myer buildings in Rundle Mall we will see through this bill. One billion dollars was sunk on that one building alone in South Australia, yet they come back—history repeats—and they are doing it again. It is quite an extraordinary thing for us to see.

In addition, the government claims that this can only be used to prop up commercial property. There is no way that it can be used for other purposes. Yet we see that clause 7(2) says:

A further object of ABIP Limited is to provide financing in other areas of commercial lending through financing arrangements of a kind agreed to by the members of ABIP Limited …

Anything! They will fund any state project which is falling foul. There will be $28 billion in government funding again whacked up on the credit card, to take us over $200 billion in government debt which we have to pay back at some point. It is quite extraordinary.

This is a group of people, I remind you, who for 12 years in this place and in the public arena made the point that you cannot trust the banks—you cannot trust the big four banks. The minister for finance was regularly out there telling people to switch banks to avoid fees—to go to smaller banks. The member for Makin on 5AA, I seem to remember, would quite often suggest to constituents, or those he sought to represent, that they should look at other options.

Yet what we see here is the government agreeing to be part of a deal where they will have one representative on the board out of five. The other four will be from the big banks—the big bogeymen. The other four will only have the combined risk of $2 billion compared to $28 billion of risk on behalf of the Commonwealth. This is hardly something they have not taken on trust. It is quite extraordinary. They are now trusting these big banks, even though for 12 years we heard how bad the banks were and how they colluded. Guess what they are excluded from? The Trade Practices Act! This is quite extraordinary. It is the Labor loan sharks. The desire of the Labor Party to get involved and become merchant bankers knows no bounds.

This is disastrous legislation for our country, for it puts our economy at risk. We saw states like Victoria and South Australia go through dark years in the early nineties because of the financial mismanagement of state Labor governments. The same people on the other side now seek to implement the Ruddbank, which will make the same mistakes and do the same things that got South Australia, Victoria and Western Australia into such trouble in the late eighties and early nineties. I remind the House that the decisions that were made by state Labor governments through their banks and through their instrumentalities to lend to commercial properties were the reason those banks went broke and sent the states to the edge. They involved 333 Collins Street, Melbourne and the Myer building, in particular—$1 billion on one building alone. I would like to see how the member for Makin explains that to his constituents, who spent 15 years paying off the state Labor government debt that was accumulated because of decisions made by those on the other side with a great desire to be merchant bankers.

I will not take any more of the House’s time this evening, because I understand we want to keep moving on, but I very strongly oppose this legislation. This will be an economic disaster now, tomorrow and in the future. History repeats itself. The Labor government do not bank well, and I oppose the bills.

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