Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I am glad you keep raising Mr Costello, because I am coming to him. While these are serious times for the global economy, we have been consistently making the point that our banking sector does not face the same problems as those at the core of the US financial market troubles. The strengths of our banking sector and the fact that we face a much different situation to that in the US were reaffirmed yesterday by the IMF and today by the Reserve Bank of Australia when it said:

It is important to note, however, that the ratio of banks’ problem loans to total assets remains below the average since the mid 1990s, a period of unusually low credit losses.

The RBA also notes that in Australia ‘the closest equivalent to US subprime loans’, referred to as ‘non-conforming house loans’:

… account for less than 1 per cent of outstanding housing loans …

That is why it is so concerning that the Leader of the Opposition told Laurie Oakes on the weekend that we need to follow the US example and bail out the bad debts of our banks. The reality is that the health of our banking sector is light-years away from the US banking sector. Even the gentleman quoted extensively from that side of the chamber, the former Treasurer Mr Peter Costello, has given Mr Turnbull a dressing down on Lateline for suggesting our banks are facing the same sorts of problems with bad debts as the US system. This is what Mr Costello, the member for Higgins, had to say:

I’m going on to make the point in my view—

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