Paul Fletcher (Bradfield, Liberal Party) Share this | Hansard source

I am very pleased to rise to speak on the Banking Amendment (Covered Bonds) Bill 2011. In the brief time that I have available to me, I will make three points about this important legislation. First, I will talk about how the coalition's approach to the bill is that of a constructive opposition. Second, I will talk about the fact that covered bonds offer the potential to assist the Australian financial sector—and the banks in particular—to raise capital and about why that matters. Third, I will address the key issue of the impact of covered bonds on depositors and how concerns on that front are addressed in this bill.

I turn to my first point. On this bill, as on so many other bills, the opposition is playing a constructive, cooperative and value-adding role. The appearance of politics can sometimes differ from the reality, and I am sorry to say that there are some in this place who for their own purposes seek to create the impression that the coalition is obstructionist in its approach to opposition. This is unfortunate and not in accordance with the facts, Mr Deputy Speaker Sidebottom, and I know that your own commitment to a close analysis of the facts will be satisfied when we look at the statistical evidence.

The government likes to claim that, as of late September 2011, over 190 bills had been passed by this parliament. The reality is that approximately 170 of those were ultimately passed without a negative vote from the opposition. Indeed, in quite a number of cases, the opposition engaged very constructively by offering helpful suggestions and constructive amendments. In some cases our suggestions were accepted and our amendments included in the bill as it was passed into law. Only a relatively small percentage of bills, therefore, have been voted against by the coalition. I think it is important that we put that on the record so that there is no misunderstanding in the face of the unhelpful claims which are sometimes made by the government and which are not in accordance with the facts. This is an opposition which approaches the government's legislative agenda with an open mind. We are willing to work constructively with the government to improve legislation where that is appropriate. This bill we are debating today, the Banking Amendment (Covered Bonds) Bill, is one which the coalition welcomes and supports. That is not unrelated to the fact that the idea came from this side of the House. In October 2010 the shadow Treasurer, the member for North Sydney—my neighbour in the northern suburbs of Sydney—announced the coalition's nine-point banking plan. One of those nine points was:

Commission a resolution to the debate about whether banks should be able to issue "covered bonds", in the same way other jurisdictions allow their banks to, which provides a more affordable line of credit.

Imitation is the sincerest form of flattery, and two months later the government was eager to flatter the opposition when, in announcing its own banking plan, it included the following item:

Allow all banks, credit unions and building societies to issue covered bonds to broaden access to cheaper, more stable and longer-term funding …

The bill which is in front of the House this afternoon implements that measure.

It is perhaps not surprising that the Treasurer has found it necessary to draw on ideas from this side of the House because his own contribution to the performance of not only Australia's banking sector but Australia's wider economy has been a remarkably undistinguished one. Under the present Treasurer we have seen the merger of the Commonwealth Bank and Bankwest, and of Westpac and St George, leading to an unprecedented increase in concentration and a corresponding reduction in the intensity of competition. We have seen on the watch of the current Treasurer a panicked introduction of a $1 million guarantee for depositors, and this follows Australia having record for many, many years of not needing to have such a government guarantee. We now of course, with this guarantee in place, face the well-known problem of moral hazard—a problem in which bank managements are aware that should they take excessive risks—

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