Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak against the Australian Business Investment Partnership Bill 2009. Put simply, it is bad public policy. Corporate governance and accountability are certainly not part of this bill. The Australian Business Investment Partnership (Consequential Amendment) Bill 2009 will exempt Australian Business Investment Partnership Ltd from the requirement of holding an Australian financial services licence under the Corporations Act 2001. It is inconceivable that, under this legislation, the major banks will have the Labor government’s protection to collude and potentially engage in cartel behaviour because activities under this bill will exempt ABIP from any scrutiny under the Trade Practices Act. It will be exempt from ministerial and parliamentary oversight. The Trade Practices Act applies to Australian businesses and commercial entities except, in this instance, the major banks. The Labor government is placing the banks and the Ruddbank above Australian law, above ministerial oversight and above the parliament and scrutiny by the taxpayers who are funding and guaranteeing the $28 billion in funds.

Every taxpayer dollar allocated to funds for the Australian Business Investment Partnership, potentially $28 billion, removes initiatives and assistance that should be applied to the engine room of the Australian economy, the small businesses that employ nearly half the workers in the nation. It detracts from initiatives to assist exporters—keeping in mind that the only reason Australia has not been in technical recession is the strong performance of our exporting agricultural sector, made up primarily of small, family owned and run Australian businesses—initiatives for small business that will help them retain their highly valued and trained employees. Australian jobs should be the priority.

The Ruddbank reminds those of us from Western Australia of another Labor government initiative, WA Inc.—the infamous WA Inc. years of the WA state Labor government of the 1980s, when the state Labor government put big business interests above the accountability and scrutiny of the parliament and people of Western Australia. Between 1983 and 1991, in Western Australia, state Labor governments conducted quiet deals with private businessmen and their companies. The Bond Corporation, through the state government superannuation board, acquired major holdings in Bell Group. Rothwells was given a $150 million government guarantee by the then Labor Premier Brian Burke. The petrochemical plant joint venture, which was the cover for manipulating fundraising, collateral transactions, development proposals and of course the payment of management fees, turned a $100,000 outlay into a return of $400 million, $175 million of which was provided by a state Labor government agency, WA Government Holdings. Those are just some examples of Labor’s WA Inc. deals. These public scandals saw Perth entrepreneurial opportunists manipulate Labor ministers and commercial transactions, walking away with millions of dollars of taxpayers’ funds, provided with the full consent of the state Labor government.

But these funds were taxpayers’ funds and, in some instances, ultimately private investors’ funds. There is nothing in this bill to stop the Ruddbank funds from being used for other state government purposes, for other types of property investments or to prop up debt financing for large commercial projects—again without any scrutiny or accountability to the minister, the parliament or complying with the Trade Practices Act. It is bad public policy. Ruddbank will have access to $4 billion—$2 billion from the Labor government and $500 million each from the four major domestic banks.

When additional financing is required beyond the initial contribution of $4 billion, ABIP will be able to issue up to $26 billion in debt to raise the additional funding. Debt issued by ABIP will be government guaranteed, $28 billion of which is guaranteed by the Australian taxpayer—taxpayers who will be guaranteeing decisions, expenditure and debt decisions made by the four major banks. And this is of course on top of the $200 billion of taxpayer funded credit card borrowings of the Rudd government. How much more debt will this Rudd government leave for our children to pay off, and where are the checks and balances to prevent collusion by the big four banks in this process? There is a very clear conflict of interest. Jennifer Hewett reported in the Australian on 28 January:

Contrary to the impression deliberately created by Canberra, the new commercial property fund will do virtually nothing to directly protect jobs in the construction industry.

On the same day, in the Australian Financial Review, Stephen Kirchner reported that, once again, the Rudd government’s intervention puts the ‘needs of business and financial institutions ahead of consumers and taxpayers’. He wrote:

… the Rudd government is constructing a corporate welfare state that will ultimately hold back, rather than support, the economy.

Debate interrupted; adjournment proposed and negatived.

ABIP is counterproductive for Australia. There is no existing threat that foreign banks will withdraw, apart from the Royal Bank of Scotland, which is subject to a takeover. While supposedly designed to discourage foreign banks from exiting Australia, ABIP will actually encourage banks to exit and to demand their money back to the full value of their loan.

Anthony Klan, from the Australian, stated on 28 January that the Ruddbank was expected to ‘mask sloppy lending practices’ undertaken by the major banks during the property boom with their ‘reliance on overstated property valuations—or “friendly valuations”’. But taking over commercial property loans from foreign banking institutions must not be based on old valuations. The Financial Review agreed in an article on 3 February, which said:

Lending must be done on new, not old, valuations. Loans that were written on aggressive boom-time criteria should be allowed to fail.

Again—this is bad policy. Once again, the taxpayers will take all the risk. We certainly do not want a repeat of the WA Inc. scandal. This is bad policy, and it should not be passed through this parliament.

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