Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. I refer the Prime Minister to the Obama administration’s overnight announcement of sweeping changes to the regulation of the United States financial markets. I also refer him to the fact that his own government has seen no need to make similar changes in Australia. Prime Minister, isn’t it the case that your government inherited the best regulated and most robust financial system in the world?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for his question. I have not seen the detail of President Obama’s statement overnight and will be studying that in the period ahead. Can I say to the honourable member, however, that the President of the United States and I, in Washington and subsequently at the G20 summit in London, discussed on many occasions how we, as a G20, reform global financial markets and global financial systems and the regulatory environment which underpins them because, as the honourable member would know, in particular given his professional background, global capital is globally mobile and therefore the regulations that we need for the future need to be consistent across multiple nations, across multiple jurisdictions. Therefore that is why an extensive raft of reform proposals have been put to the Financial Stability Forum, as it was before—now the Financial Stability Board—that is headed by the Governor of the Central Bank of Italy, Governor Draghi.

Australia is represented on the Financial Stability Board and has recently had its representation enhanced from one position to two positions. As a consequence, through our representation on the Financial Stability Board, we will be working through with our colleagues from the G20, which now has a membership which parallels that of the Financial Stability Board, a raft of reform proposals which go to the questions of executive remuneration and financial markets as well as the proper provisioning for risk, the proper provisioning for capital adequacy and the proper provisioning for a whole range of other protections in financial markets. I would also draw the honourable member’s attention to the fact that the reason that we found ourselves in this extraordinary crisis—starting with the events of late last year and commencing in the United States much earlier than that—was that we had an outbreak of free-market fundamentalism in the United States with grossly unregulated markets and as a consequence of that we had the spread of this contagion across the world.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I would have thought this answer is quite relevant to the question I have been asked.

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

The Prime Minister will resume his seat. The Leader of the Opposition on a point of order?

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Yes, Mr Speaker; it is a matter of relevance. The Prime Minister should answer the question and take the opportunity to say something positive about the Australian economy.

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

Order! The Leader of the Opposition will resume his seat. The Prime Minister is responding to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Mr Speaker, as I said yesterday, me thinks he doth protest too much. The fountain of negativity on the Australian economy, the Leader of the Opposition, will not pass an hour or a day, in this place or beyond, without taking the opportunity to talk the Australian economy down, to talk negatively about what is going on, to seize any piece of data and to twist it in order to convey a negative narrative against the Australian economy. I say to the honourable member: why doesn’t he stand with the parliament and with the nation at large and celebrate the fact that Australia is now the fastest growing economy of all the major advanced economies? Why does he not stand at the dispatch box and celebrate the fact that we have the second lowest unemployment among the major advanced economies? Why does he not stand at the dispatch box and celebrate the fact that we have the lowest net debt of the major advanced economies?

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. It goes to relevance. Why doesn’t he stand at the dispatch box and answer the question?

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

Order! The Leader of the Opposition will resume his seat. The Prime Minister will respond to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Mr Speaker, the point of order from the Leader of the Opposition was about speaking positively about the Australian economy. Therefore, it is a question of growth, it is a question about unemployment and it is a question about net debt relative to the rest of the other economies around the world. It is also a question in terms of government deficit relative to the other major advanced economies and to the fact that this economy, virtually uniquely across the OECD, has managed thus far to avoid a recession. I would have thought that, in terms of speaking positively about the Australian economy, this is where the nation—consumers across the nation, businesses across the nation—want us to be, reflected by the two confidence indicators recently indicating that Australians want us as a government, as a nation and as a parliament to be as one, pull together and push the Australian economy up, lifting it up out of global recession.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, it goes to relevance. He cannot—

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

Order! The Leader of the Opposition does not have the call yet. The Leader of the Opposition.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, it is a matter of relevance.

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

The Leader of the Opposition will resume his seat.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

The Prime—

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

The Leader of the Opposition will resume his seat.

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Minister—

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

The Leader of the Opposition will resume his seat!

Malcolm Turnbull (Wentworth, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

cannot—

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

The Leader of the Opposition has raised a question of relevance.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

Mr Randall interjecting

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

We can always assist the member for Canning by putting him on the Speakers panel so that he can learn something about chairing, but otherwise he should sit there quietly. First of all, I indicate that anything that was said during an earlier point of order was not a supplementary question and should be ignored. The original question dealt with the financial sector and the global crisis. The Prime Minister will respond to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

In terms of the question about financial markets, as the honourable member was asking before: that is why the government, given the dramatic circumstances of last October—

Opposition Member:

Opposition member interjecting—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I would have thought the honourable member might be interested in this response. The government response to the events of last October, following the implosion of Lehman, ‘Black Friday’ on stock markets and the grave crisis we faced in this country as a consequence of that, included actions to provide guarantees for depositors right across the country for the first time in the history of the Commonwealth. He asks a question as to what was missing in terms of the regulatory environment when this government was elected to office. Where was a deposit insurance scheme on the part of those opposite? When the Liberal Party occupied the treasury benches, how many times was a deposit insurance scheme recommended—one, two, three, four, five times? The reason they did not is that the banking industry got into their ear and said it was too expensive; they did not want to do it. As a consequence, we actually found ourselves on the cusp of this crisis in September and October last year without adequate consumer protection for depositors across the country. That is why the government had to act.

The honourable member asked a question about what actions we have taken to improve financial regulation in this country. I would think that the 13 million or so deposit holders across the country, all the men and women in the gallery here today and those listening to the broadcast who have deposits in banks, building societies and credit unions will be pleased by the fact that a government at last acted to provide that level of security to the Australian financial system. That is one element of our actions.

We have also sought to undertake other actions, which have been frustrated by the member opposite, including the proper provision of financial support for the commercial property sector in Australia. I say to the Leader of the Opposition: as he looks at the number of firms out there in the construction industry with jobs at risk of being lost through the nonsupply of capital, he should ask himself the question of why he has acted so negatively and destructively to undermine the Australian Business Investment Partnership. It was supported by the Property Council and supported by business groups across the country. At this time of crisis in financial markets, we needed a special form of market intervention of the type which is put together with the private sector. Of course, this was blocked and voted down by those in the Senate.

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

Mr Speaker, this question did not invite a 50-minute tutorial from Professor Rudd.

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

The point of order is?

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

Mr Speaker, the point of order relates to relevance. The Prime Minister was asked a specific question.

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

Order! The member for Sturt will resume his seat. The Prime Minister will respond to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Firstly, the government acted nationally through the measures I have just referred to—providing guarantees for deposit holders, providing guarantees for interbank lending and proposed interventions of the type described in the Australian Business Investment Partnership. Secondly, and critically, the government acted multilaterally through the G20 and through the raft of reforms to financial markets which are currently being considered by the Financial Stability Board. Australia is actively engaged in all of this. I would have thought the honourable member would understand that capital is globally mobile, and for there to be an effective regulatory environment you need a global set of regulations to underpin it. The member asked what actions we are taking—we are active on this range of fronts and we will continue to be active on them into the future.