George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Hansard source

As Senator Mason says, it was imported. Where Australia stands in relation to this crisis is not the consequence of decisions of the previous government. On the contrary, the previous Treasurer, Mr Costello, in 1997—long before the subprime housing crisis was dreamt of—anticipated and, so as to avoid the emergence of such problems in Australia, set up the Australian Prudential Regulatory Authority. The Australian financial system has been largely quarantined from the effects of the global financial crisis. We have had no Bear Stearns, we have had no Northern Rock and we have had no collapse of a Lehman Brothers or Bank of Scotland.

In fact, over the last weekend the Deputy Prime Minister, Ms Gillard, was able to boast at the World Economic Forum in Davos that, of the 11 strongest banks in the world, four are the four big Australian banks. Mr Acting Deputy President Trood, you and I both know that in the international financial system Australia is a relatively small player. The value of our capital markets is a fraction of the aggregate value of the world’s capital markets. A decade ago, not one of the 11 strongest banks in the world would have been Australian banks, simply because of their relatively small size in international financial affairs, but today—because of the decline in the credit base of American, British, European and some Asian banks—four of the 11 strongest banks in the world are Australian. That did not happen by accident; that happened because of the foresight, prudence and judgement of Mr Peter Costello.

But do not take it from me. Let me read you some words from an address last December to the Centre for Independent Studies in Sydney, published in yesterday’s Australian newspaper. The commentator, an economist, said this:

Lax business regulation has contributed to the global financial crisis that has plunged most of the Western world into recession. But before we pronounce free markets dead and 2009 the year of reregulation, let’s analyse what went wrong.

This particular economist goes on to say:

For Australia the short answer is nothing. Australia’s financial regulation is the envy of the rest of the world. Both the International Monetary Fund and the World Economic Forum rank our financial system among the top four in the world.

Who was this sage, who was this Cassandra, who was this Daniel Come to Judgement who announced as recently as last December that for Australia the answer is that nothing went wrong—that, in a financial maelstrom, for Australia everything went right because our financial system is the envy of the world? Why, it was none other than Dr Craig Emerson, the Minister Assisting the Finance Minister on Deregulation—the only professional economist who sits as a minister in the Rudd government. Dr Emerson was right.

The Australian government, the Labor government, will be judged by its response to the global financial crisis. The response so far has been panic stricken and hysterical, and no more so than in a flimsy polemic, the product of a second-rate mind, published by Mr Rudd in the Monthly journal this week. Mr Rudd, contrary to the assertions of his much better educated Minister Assisting the Finance Minister on Deregulation, claimed that it was regulatory failure in Australia, in common with the other Western economies, which was to blame. It is nothing of the sort, as Dr Emerson had the understanding to point out as recently as the month before last. The Rudd government’s response to this crisis has been a panic-stricken, hysterical and wrong-headed response. We Liberals, we who proudly bear the name ‘liberal’, neo or otherwise, will not stand by to see this nation sunk in generations of debt.