Chris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

My question is to the Treasurer. Can the Treasurer please explain to the Australian people the logic of his government lending $10 billion to the International Monetary Fund for eastern Europe while the government borrows $188 billion to fund his own budget?

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

I am happy to answer the question. At the recent meetings of G20 leaders in London, it was decided that there should be a substantial increase in resources for the Internationally Monetary Fund, given the global recession and the dramatic impact that that global recession was having on the developing world, the impact that it was having on those nations and the subsequent impact that was having on world growth—which was feeding back into the global recession. The decision was taken by governments of all political persuasions around the world that in those circumstances it was the responsible course of action to increase the resources of the International Monetary Fund.

Those opposite are fond of talking about the Asian financial crisis. Many opposite have compared it in size to this global recession. But we know that the global recession is much bigger and that it takes in both developed and developing countries. As part of this nation’s response to the Asian financial crisis, very substantial moneys were lent to countries in the region by the former government, rightly and correctly.

In the meeting of the G20 recently it was decided that the new arrangements to borrow should be increased. We agreed to that. Our proportion of borrowing under that new arrangement—which we have always contributed to, under the previous government and under this government—is going to increase. We have agreed, as part of the new arrangement to borrow, that there will be increased resources—loans, which will be repaid with interest—should they be required. We are making them available in exactly the same proportion that the previous government also made them available. There has been no fundamental change whatsoever.

But what we seem to have now from the opposition is yet another example of tawdry, cheap and opportunistic politics. We are participating in the IMF in the same way as the previous government participated in it. We are doing it for very good reasons. We are doing it because it is good for this country economically, but we are also doing it because it is our responsibility—a responsibility that both sides of politics have adhered to over a long period of time. If that is changing as well, I would like to hear the Leader of the Opposition tell us what his position is. He is on the record, around the time of the G20 meeting, as supporting a very substantial increase. So we have his support, but obviously we do not have the support of one of his frontbenchers. That is yet another example of the confusion and disunity of those opposite and the rabble that the opposition have become.