Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

The Assistant Treasurer should know better, because this is part and parcel of his problem. He was one of the people who led the charge to make sure that there were unlimited guarantees for the banks, which created a lot of this financial problem.

The development and building industry is suffering. Their loan facilities are being called in and they are not being refinanced. That is the equivalent of their floor stock as they deal with people in providing developments, including schools, houses and industrial lots, and job opportunities, particularly in regional and rural areas. Where is their guarantee of finance? Where is their taxpayer guarantee, funded through the four banks? It is not there. These people pay their taxes too, and when the Labor government provides these guarantees to other industries it is with their money. They just ask for a little bit of equity.

I am not against the motor vehicle industry being supported but I would also like you to consider the marine industry, which has just had its boat show on the Gold Coast. It has the same problem: it has stock that it needs to put on the floor and it needs finance. Where are its guarantees? They are not there.

It is no different in the tourism industry, which wants to embark on new ventures or buy new equipment. This government introduced the 30 per cent accelerated depreciation for investment allowance and extended it to 50 per cent for small business, but the problem is that people cannot get the capital. You can have all the incentives you want, but if you cannot get the capital you cannot commit with it. One reason they cannot get the capital is that the banks want more and more guarantees.

Constituents of mine say to me that if it is good enough for this government to use taxpayers’ money to guarantee the finances of one industry then why not do it for them? Why do they have to wait until they are on their knees? This government talks about how it is being proactive and decisive, but being proactive and decisive, when you are spending money collected from all taxpayers, means supporting all taxpayers in their industry and development. Clearly, this government does not understand where it is going in what it is providing here.

It is also no different for engineers and manufacturers. What about the support industries in the motor vehicle industry—the people who provide the wiring looms, the seats, the panels, the accessories? Why aren’t their capital requirements being guaranteed by the government? When you cherry-pick sectors you change the structural integrity of the market, and if you prop up one side of the market but not the other you create a massive imbalance. It is like being pregnant, to use an analogy. You cannot be a little bit pregnant. You have to be in either for the whole shot or not at all. I say to you that, in financing, the problem is that the government has created this imbalance.

The coalition have said that we will support this bill because it is important that we find a way through this economic crisis. The one key measure that has been left out in the way in which the government has dealt with financing is that it has done absolutely nothing to instil in our community confidence in our economy, because the confidence in the leadership of this nation is rapidly diminishing. The government can spend all the money it wants. It can create all the guarantees it wants at the expense of the taxpayer. But, unless this government drives confidence in the marketplace, confidence in the community so that they can invest and confidence in finance companies, we will get into a situation where finance companies and banks keep tightening up because of risk profiles. They will tighten up to the extent that the government will have to step in and provide more guarantees.

What the government has started here is an avalanche of underwriting capital requirements in Australia. Mark my words: we will be coming back here over the next few months with another industry on its knees because it cannot get finance and this government will say: ‘Let’s underwrite this; let’s guarantee this; let’s provide vehicles.’ And that will continue to distort the market. The initial step taken by this government, when it rushed in, did not consult with the coalition and did not sit down and get consensus opinion—it did not even listen to the people at the 2020 Summit, despite the great fanfare about listening to the greatest minds in Australia—is now having a downstream avalanche effect on the finance industry. So we will be back here regularly. There will be many bills providing financial guarantees for many industries, and I think that is the issue that we need to address.

I say to the government: you are going down this track but how are you going to explain to all those other industries that you are not prepared at this stage to underwrite them? What are you going to say to them? What are you going to say to all those people who become unemployed because you started an avalanche that they are now paying for? Always remember, as you go down this path of guarantees and cash handouts, that it is not your money in total; it is the money of the taxpayers of Australia and of the kids up in the gallery. It is their money and money that will be theirs in the future that you are handing out and playing with, and they expect nothing less than for you to be responsible in the administration of their finances. We have said we will support the bill and we will do so, but you need to think long and hard about the direction in which you are taking the finances of this country.

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