James Paterson (Victoria, Liberal Party) Share this | Hansard source

This is an Australian Labor Party which has abandoned any pretense of responsible economic management and any prudent fiscal responsibility, and this is just the latest example of this. Of course I expect the Greens to indulge in bank bashing and economic populism, but from time to time the Australian Labor party has in the past shown some ability to resist that and not indulge in that. But I am sorry to say that this is one new instance where it has shown no ability to do so.

Unfortunately, this has been quite a recent road to Damascus for the Labor Party. This is quite a new position of theirs when it comes to banking. It was not that long ago that in this very place they were voting against motions put by the Greens to establish a royal commission into the banking industry. It was not that long ago, when they were in government themselves, that they said there was no need for a royal commission and did nothing to set up a royal commission of their own. It was, in fact, Bill Shorten himself, as Minister for Financial Services and Superannuation, who said, 'Australia's banking industry is largely well run, is largely well regulated, and there is no need for an inquiry of this kind.'

It is not the only area in which the Labor Party has embraced economic populism, but it is the most dramatic and the most recent. It was in June 2015, in this chamber, that the Labor Party voted against a royal commission. It was the Minister for Financial Services and Superannuation, Mr Bill Shorten, who said in 2012:

AUSTRALIA has some of the best banks in the world. It is partly because of our excellent regulatory system and prudent management.

Mr Shorten recognised as minister that, fundamentally, our system was sound.

I am not here tonight, and none of my colleagues are here tonight, to say that the banking industry is perfect—far from it. Any industry which has tens of thousands of employees and which has such large organisations is bound to make mistakes and should be held fully and absolutely accountable for those mistakes, and that is exactly what the government is doing. The government, though, is doing this in a responsible and prudent way. We are not doing this in a reckless way like the Labor Party. We are going about setting policy in this area in a sensible and rational way. We go to experts like David Murray to hold a holistic inquiry into the financial services system, look at it carefully and provide recommendations for us about that, and then we are implementing those recommendations. We are requiring bank CEOs to come before the parliament to answer for their conduct.

Senator Gallagher certainly thinks that that is insufficient and does not go far enough, but it is one thing more than your government did when you were in power. It is very easy for you to say now in opposition that this is a critical issue, but are you seriously arguing that, when you were in government only a few years ago, everything was fine, there were no problems with Australian banks and there was nothing to worry about but that all of a sudden, when the government changed in 2013, these problems emerged and this previously perfect industry now needs a tough cop on the beat in the form of a royal commission?

This is a very recent conversion. It is not the only conversion on economic policy. It mirrors very closely Bill Shorten's abandonment of his own support for company tax cuts. As a minister in the Gillard and Rudd governments he was an advocate for cutting company tax, because he believed that there were great economic benefits to come from it. Now, as opposition leader, he has gone down the Jeremy Corbyn line and is embracing economic populism and opposing company tax cuts that he, himself, had made very elegant arguments for. This is the Leader of the Opposition who, as a minister in the previous government, presided over the largest influx of 457 visa holders in Australian history—more than ever before. Now, as the opposition leader, he is suddenly the friend of the Australian worker, railing against foreign workers in the most crass and populist way, in the most xenophobic way.

Just because the Labor Party have abandoned their pretence of supporting sensible and measured economic policy does not mean that the government will. The government is engaging in this debate and addressing these issues in a prudent, responsible and reasonable way. We are following the advice of people like the former Treasurer, the member for Lilley, Wayne Swan, who said in 2010:

The last thing the system needs is another inquiry.

Crass populism does not work here. What works here is a methodical application, the detail of getting it right and getting it in place so that reform is enduring for the long term. Well, I wonder where that attitude has gone in the Australian Labor Party.

We have a bit of an insight into the way in which the Leader of the Opposition developed his policy in the area, because he was very frank and very open when he was on Neil Mitchell's program in April last year. He said:

There are problems with bank and some of the - I wrote down a little list as I was coming in here because obviously this is a key issue.

He goes on to say:

I think a Royal Commission will have to look at vertical integration—

and so on and so forth. So you have the Leader of the Opposition on the way to a talkback radio interview sitting in the back of a Comcar and taking down some notes that perhaps we should have a royal commission. This is his little list. This is sophisticated policymaking for serious public policy issues that the Australian Labor Party is engaged in today.

That is not the approach that the government will take. We will not do the easy populist route and go after easy targets. Yes, Australian banks are profitable, but what would you rather have: the profitable banking industry that Australia has, or the alternative elsewhere in the world where, during the global financial crisis, taxpayers had to bail out banks left, right and centre?

It is vitally important that the government of the day supports confidence in the financial system. That is not a trivial point. That is a serious point. If ever in the future there is a mass breakout of lack of confidence in our financial system, we will have a very serious problem on our hands. This is not an area to make cheap political points. This is not an area to make cheap political gains, as the opposition is seeking to do. This is an area which requires prudent, reasonable management and prudent policy, and that is exactly what this government is doing.

My colleague Senator Hume carefully and in detail outlined the measures and steps that our government is taking and the measures and steps the parliament has taken through its committees to examine these issues. This is not an area where there has been an absence of activity. In fact, there has been more activity in this area under this government than any previous government, and it is more than those opposite can say for their time in office. It is disappointing but not surprising to see them embrace economic populism here tonight. It is disappointing to see them being dragged by the nose to the left by the Greens, but perhaps it is not surprising.

I look forward to Senator Dastyari's contribution to this debate shortly, because I know, as a proud man of the New South Wales Right of the Labor Party, in times past he would have stood with the economic reformers like Paul Keating and Bob Hawke and supported rational economic policies. He might have even supported his colleague Chris Bowen, the member for McMahon, who, as Assistant Treasurer and former minister for financial services, said the following:

Our two market guardians are the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission … The standard they set is world's best practice.

Where is that attitude now? Where has that attitude gone? It has gone the way of Jeremy Corbyn as the Leader of the Opposition seeks to make cheap political points and make cheap political gains at the expense of serious policymaking to address serious issues, which we all acknowledge exist in the banking industry. This government has a plan and a process to address and deal with these issues; those opposite have no plan to address or deal with them, but hope that a handpass to a royal commission or commission of inquiry will fix the problems. It will not.