Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Hansard source

There are a number of amendments that will be considered as part of the Australian Business Investment Partnership Bill 2009. I thought it would be useful for the chamber and for the orderly handling—at least of the coalition’s participation in the debate—if I were to outline our general approach to the amendments.

Central to discussions about this bill is whether the Australian Business Investment Partnership is required at all. In the coalition’s view, we should not be intervening in the commercial property market, or indeed any market, with all the distortional effects that this causes unless there are sound reasons for doing so. The fundamental question here is: is there a sound reason? What has been missing from this debate is any concrete evidence that there is a clear and present need for a government backed facility of the kind proposed in this bill to be available to meet funding gaps in the commercial property sector. Quite apart from our objections to the structure of Ruddbank—moral hazard arguments, conflicts of interest, vague lending criteria, problems with governance, lack of accountability and so forth—the fundamental rationale for the bank, that foreign banks are likely to withdraw from syndicated large debt facilities, has, in our view, not yet been established.

I do accept that in the current financial climate there may be challenges in refinancing risk. But the anecdotal scenarios of ifs and buts and maybes qualified the evidence—heavily qualified it, in my view, given that some witnesses arguing for this bill in the Senate Standing Committee on Economics fortified the coalition’s view that the primary rationale for setting up this bank has not been made out. Notwithstanding the importance of the commercial property sector—and that must be acknowledged—there is no sound public policy reason that I can discern that would justify the cost of setting up this bank just because circumstances might at some unspecified time arise where it could be needed. And just think about this: if we approached every institutional and financial risk in the private sector that way, there would be a never-ending queue of sectoral interests requiring a safety net and similar treatment with the risk passing to the hapless taxpayer. So whilst some of the amendments proposed by Senators Xenophon and Fielding and the Australian Greens are well-intentioned and even thoughtful—and I have had a look at all of them—in our view they are redundant. That is because the primary rationale for the bill has not materialised. No amount of amending it will make any more compelling evidence that foreign banks are likely to withdraw their investments from syndicated loans in circumstances where our domestic banks are unable or unwilling to fill the gap. It is, of course, the proverbial analogy, the lipstick on a pig analogy, that a nicer shade will not make it any prettier. Amendments, however sound, will not overcome the fact that the bill lacks its fundamental premise.

I also alluded in my remarks during the second reading debate to the coalition’s concerns that there may even be a possibility that the arrangements surrounding Ruddbank will increase Commonwealth debt by another $28 billion. I made those remarks prior to the budget being handed down on Tuesday night. On Tuesday night, of course, the Australian people were confronted by a Rudd Labor government budget that will define this government, I think, for all time. Australia is now swamped by the largest cumulative deficits, $220 billion, in contemporary Australian history, and the largest public debt—a whopping $188 billion net public debt and rising—and by spending, that is, on any view, out of control. Just since the 2007 election there has already been $124 billion of new spending by the Rudd Labor government. Labor has lost control of the nation’s finances, and there is absolutely no justification for adding another potential liability of $28 billion. I know that sounds quite minor with the magnitude of the numbers of billions that get thrown around under the guise of making provision in this climate. But in this bill it is unfair to be adding another potential liability of $28 billion to Labor’s rivers of red ink stretching as far as the eye can see. We believe that in the absence of the case being made out for this bill there is no justification for amending it; and that will be the approach that the coalition will take to the amendments that are no doubt about to be put forward.