Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I refer to the proposal being canvassed by the government to withdraw the free guarantee for deposits over $1 million. How will the government’s change of heart on this issue affect a depositor who has made an investment relying on the government’s announced guarantee and locked their money in for a 12-month term deposit with an institution with whom they would not otherwise have invested? Will their deposit remain guaranteed free of this charge for its term or will the free guarantee they relied upon in good faith be withdrawn?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the shadow Treasurer for her question. The government makes no apology whatsoever for putting in place a comprehensive guarantee on deposits and also a comprehensive guarantee for term funding. This comprehensive guarantee is not supported by those opposite. Let us be very clear: those opposite want a scheme which cuts out at $100,000, leaving 40 per cent of all deposits without a guarantee. They want that because they do not understand the magnitude of the challenge that flows from the global financial crisis. They do not understand the reasons why this was put in place. They certainly do not understand why the Reserve Bank supported the putting in place of this guarantee and why the Treasury supported it. They have been repudiated comprehensively in Senate estimates.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. This was a very specific question about a proposal to withdraw a guarantee that was free of charge. It is a very specific question and the Treasurer has failed to answer it.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Treasurer is responding to the question and I will listen carefully to his answer.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

The Leader of the Opposition is in a bit of strife today. It started last Sunday when he went on the Insiders program and said that the global financial crisis had been hyped up.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The Treasurer’s subsequent remarks have nothing whatsoever to do with the question and I ask you to bring him back to the question that was asked.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Treasurer will respond to the question. I am listening carefully to him.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Yesterday he made a monumental gaffe in this parliament where he suggested the Secretary of the Treasury should be sacked. That is what he said. What was that all about? That was all about the Treasury secretary supporting a comprehensive guarantee for bank deposits. But, of course, it does not agree with what he wants to do, so he is out there bagging the Treasury secretary. That is what he is doing—and he has not been man enough to come into the House and to apologise—because the Treasury secretary has supported a comprehensive guarantee which he does not support.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The Treasurer was asked a very specific question which depositors want to know the answer to. This has nothing to do with the Secretary of the Treasury. The fact that he is refusing to answer indicates that he does not know the answer.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Sturt will resume his seat. He is not permitted to debate a point of order. I will listen carefully to the Treasurer.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Of course, this morning in the Senate Senator Abetz again questioned the honesty of the Treasury secretary. This is just reckless and irresponsible behaviour at a time of a global financial crisis. I will come to the detail of the question. I made it very clear—

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. How can this answer possibly be relevant to the very specific issue raised?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I simply say that, according to tradition, specificity is of course in the eyes of the questioner. The answer is relevant to the extent that it is talking about the policy area that is the substance of the question. The Treasurer will respond to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Thank you, Mr Speaker. I made it very clear in the House last Wednesday in the second reading speech that we would be putting in place arrangements that reflected the fact that there needed to be a threshold above which a fee would be paid. Let me say that this finetuning that I forecast here is what the Treasury officials and the Reserve Bank have been talking about, and it is precisely the question on which the Leader of the Opposition has been repudiated by the Treasury secretary. Why are we doing that? We are doing that because there have been representations made to the government, to the Treasury secretary and to the Reserve Bank of Australia about the impact of this measure. Because the government believes in a comprehensive guarantee for everyone, we are going to put in place a charge above a threshold. That charge or that fee above a threshold will be for deposits above $1 million. Those details are being worked out. They will be published. The pricing will be out there for everybody to see in an open and transparent way.

What this is really about is their embarrassment that they have crab-walked away from support for a comprehensive guarantee for all Australians with money in banks. I tell you what: they should be severely embarrassed about that because what has occurred since we put in place this guarantee is that markets have stabilised and interest rates have come down. The banks that have taken those decisions have cited the government’s decision. So, in effect, in opposing this comprehensive guarantee they are opposing lower interest rates. That is what they are doing. All of this is about hiding their embarrassment at us putting in place a comprehensive guarantee that has stabilised the Australian financial system.