Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Hansard source

I feel inclined to ask the minister at the table, the Minister for Superannuation and Corporate Law, how many of the promised 75,000 jobs that Mr Rudd guaranteed would eventuate from the first ‘cash splash’ have actually been achieved, but I will not do that because that is contrary to standing orders and it is not relevant to the bills before the chamber. It is quite clear, as Senator Abetz said earlier, that the previous speaker has just spent 15 minutes delaying the Senate because the government are quite incapable of managing this vaunted $42 billion package—the package they have been working on for ages and wanted us to pass, rightly or wrongly, by last Friday. Here we are today and the government are in disarray. They have absolutely no idea of what they are doing and are therefore getting backbencher after backbencher up to speak for 15 minutes on irrelevant matters, as in the last speech, simply to delay the Senate in order to try to hide their abject mismanagement of this bill. When they cannot even manage a bill through the chamber, what chance have we got of them managing $42 billion in an economic package? It really shows that Labor cannot be trusted with money or even with managing the business of this chamber.

I rose to seek a response from the minister on a question relating to the spending package that is before the chamber and I am sure his response will engender some follow-up questions, so I would ask other senators to give me 10 minutes or so to pursue the particular piece of information I am seeking. I mentioned both the issues I want to pursue in my second reading debate speech. Fortuitously, the minister at the table, Senator Sherry, will be well aware of the financial disaster caused by the collapse of Storm Financial, a company that was headquartered in Townsville, where I have my office. The collapse impacted upon investors that I know of on the Sunshine Coast and the Gold Coast and in other parts of Queensland, and I know there were many people in Melbourne who were also caught up in that financial crisis. I want to raise this with Senator Sherry while he is in the chamber because he may be able to assist those people today in the response he gives to this question.

My question relates broadly to how this package might impact on the big four Australian banks. We do know that the Rudd government—using taxpayers’ money, of course: governments do not have money of their own; they use taxpayers’ money—has guaranteed the deposits of the four big banks in Australia to the extent of $600 billion to $700 billion. Because he is the relevant minister in this area, apart from being the minister in charge of this debate at the present time, I would like the minister at the table to confirm that there is a potential liability of $600 billion to $700 billion in the guarantee given by the Rudd government to the big four banks. That was the preliminary, and I do not want to go into the question of what that guarantee has done to other financial institutions. The second part of my question to the minister is: in this spending package, are there other advantages given to the big four Australian banks? For example, in what we loosely refer to as the Ruddbank proposal, will there be funds somewhere in the $42 billion package to achieve that?

I want to go on to ask the minister if he might use today to issue, if not a warning, a reminder to those big four Australian banks that they have benefited quite substantially by the largesse of the Australian taxpayer through the Australian government—to the extent of a potential support of $600 billion to $700 billion. One would argue that perhaps that is appropriate. It is important that our banks continue. But I think we need to emphasise—and perhaps Senator Sherry could do this today—that the banks and their managements and their shareholders are being supported by the Australian taxpayer through the Australian government. That is perhaps appropriate, but it would seem to me that, as the banks are the beneficiaries of that largesse and assistance from the federal government and taxpayers, it behoves the banks then to treat all taxpayers and Australians in a similar way. And that similar way, particularly in the case of Storm Financial clients but also in relation to anyone else doing it tough with bank loans at the present time, is for the banks to act in a responsible and mature manner, recognising that it is the Australian taxpayer supporting the banks in their ‘hour of need’.

We have heard some of the stories of Storm Financial clients. These are people who have worked, scrimped and saved all their lives to put aside a nest egg so they would not be a burden on the government or the taxpayer but would be self-funded in their retirement. They have got involved with financial advisers—and I will not make any comment upon that until investigations are completed. But these people, very often retired people, were receiving margin loans from banks for hundreds of thousands of dollars when it was quite clear—and any cursory examination by the banks of their situation would have shown this—that they had little prospect of paying back the banks from their incomes unless they were able to get it by other means—that is, the share market continuing to boom ahead.

There are suggestions, which need to be investigated, that the banks acted fraudulently in lending money to people who they knew had no prospect of paying it back—shades of the subprime mortgage arrangements. I want to ask the minister at the table a question, and I would hope that he would instruct his backbenchers, who have been regimented to give their 15-minute delaying speeches, to back off a little bit so that the minister could reply to this. Will the minister, on behalf of the government, say to those banks: ‘Don’t foreclose immediately; don’t sell all the shares that people had mortgaged; but, more importantly, don’t sell people’s houses that they have collaterally mortgaged to support their margin loans’?

I think it would be helpful if someone of Senator Sherry’s standing could say to those banks that the government and, indeed, we the parliament of Australia expect the banks to deal sympathetically and understandingly with those margin borrowers so that they do not lose their houses because of capricious immediate action by banks in foreclosing and selling people up without giving them the opportunity to get out of the mess by other means. In many cases it might mean an indulgence of three, six or nine months but, because of the largesse the banks are getting from this package before us and from other packages from the government, it should not be too much to ask.

I am sure all senators have had experience of constituents who are traumatised by the collapse in the financial market, particularly those who have been involved with Storm Financial. Senator Williams and I are looking at some form of inquiry into that, and that will come later. But I think it would be useful if the minister, who is the relevant minister, could use this debate—and it is relevant to this package and other economic packages of the government—to make a statement to the banks and give those ordinary Australians who scrimped and saved to make sure they looked after themselves in their own retirement rather than falling back on the government are given some hope that they will have an opportunity, at least, of some time to rearrange their affairs before they lose their matrimonial home. Minister, I invite you to respond to that in this committee stage of this debate on the financial package.