Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Hansard source

As a servant to the people of Queensland and Australia I say clearly that One Nation is worried about what unconventional monetary policy will do to everyday Australians. We do not want to see the mistakes repeated here that are already being made overseas. At the Australian Business Economists dinner last week, the Governor of the Reserve Bank, Dr Philip Lowe, delivered a speech that officially declared that unconventional monetary policy was highly unlikely in Australia. As Senator Hanson said in the opening of this debate, what troubles One Nation is that in the Q and A after his speech Dr Lowe changed his position and declared, 'If the economic indicators were moving away from target, I think all options would need to be on the table.' These options are called unconventional monetary policy. That benign name masks a world of financial pain for everyday Australians. The RBA's program would commence when official interest rates reached 0.25 per cent. Official interest rates are currently at 0.75 per cent and tipped to fall. We are likely to reach the RBAs trigger point in this term of government.

Unconventional monetary policy includes (1) bank bail-ins, where customer deposits are taken and turned into shares in the bank; (2) negative interest rates, where people pay the bank to use the money; and (3) quantitative easing, or QE, where more money is printed and is used to pump up the economy and devalue the money. All of these things only work if people are no longer allowed to keep their money in cash. Cash prevents unconventional monetary policy from working. So suddenly people can see why the 'Cash ban bill' or the Currency (Restrictions on the Use of Cash) Bill takes on new significance. We wonder: is the government planning to introduce these measures? Senator Pauline Hanson and I call on the Governor of the Reserve Bank to clarify his remarks.

Let's consider some elements of unconventional monetary policy. Firstly, quantitative easing: QE. This is where the Reserve Bank buys government bonds and the government spends that money on pumping up the economy. This is also called debt monetisation, also known as printing money. A destructive idea. The Australian dollar will be printed and debased until inflation ensues and confidence in the economy collapses. Printing money leads to hyperinflation, which is what destroyed economies worldwide, from the Weimar Republic in the 1920s to Venezuela right now.

While this limited form of quantitative easing is the RBA's preferred model, the RBA did say that it could potentially go beyond this model if economic circumstances warranted. This includes using quantitative easing to purchase private sector assets. Typically, this would be to give the big banks some of this freshly printed money, buying mortgages off the banks. This is called mortgage securitisation. It's a simple process: the bank lends money to people to buy a house, usually an investment property, and then the government buys that mortgage, gives the money back to the bank and the bank lends that money again and again. What could possibly go wrong? This policy will transfer the risk of continuing to pump up the housing bubble from the banks to the taxpayers. But the banks deal in risk. That is what banks are for. Why is this risk being dumped on taxpayers? It could cost us billions. These measures amount to the government helping out its banking mates when it is the banks that should be responsible for themselves. Quantitative easing will likely price everyday Australians out of the housing market and give more market power to the big banks. Has there ever been a prime minister who loves his banks as much as Mr Scott Morrison does now?

Secondly, another aspect of unconventional monetary policy is negative interest rates. This is where you, the depositor, pay the bank to hold your money that is deposited with them. That seems fantastical, yet 14 countries now have negative interest rates, including the economies of Germany and Japan, which are amongst the world's largest. Australia's bond rate has been between 0.6 per cent and 0.8 per cent for months. We are almost into negative interest rate territory now. After allowing for inflation, Australian government bonds are indeed trading at negative returns. What should worry everyone is that people are buying these unconventional ideas. Politicians are being led down the path. The RBA and the federal government have been talking up the economy in recent years. They are saying that the Australian economy is fundamentally strong and that public and monetary policy is being managed both professionally and prudently. So why are people prepared to invest, as an example, $1,000 to get back only $998 after two years? And that is really just $950 after inflation. Why would people burn their money if the economy were doing as well as the government says it is? They wouldn't.

In times of negative interest rates, people refuse to pay the banks to hold their money. They respond by holding their savings in cash and by paying cash. No wonder the government has brought on the cash ban bill, or, as it's officially known, the Currency (Restrictions on the Use of Cash) Bill. This bill stops everyday Australians from tendering more than $10,000 in cash in a transaction. It forces people to put their money in a bank, only to see some of that money taken in bank fees and negative interest rate deductions. This government is thinking of forcing people to consume a banking product to have their money taken from them by the banks, in order to make unconventional monetary policy effective. One Nation considers that this is just plain wrong.

Thirdly, another element of this strategy is bank bail-ins. Banks were bailed out during the global financial crisis. Governments around the world then used taxpayers' money to stabilise bank balance sheets. They gave taxpayers' money to banks. That wasn't very popular with the public, which rightly concluded that banks caused the global financial crisis in the first place. And banks continue to display bad banking behaviour: money laundering for drug dealers, as the Commonwealth Bank did until it was caught out; money laundering for terrorists and paedophiles, as Westpac are just doing; charging customers for fees without service; and charging dead people for services they never provided. The new trick is called a bail-in. This is where depositors' funds are stolen and converted into shares in the bank. Let me say that again. A bank bail-in means some or all of depositors' funds are taken from depositors and converted into shares in the bank. Depositors don't get a say in the matter; their money is stolen.

What will defeat such a bail-in is people holding their savings in cash and paying in cash. The government's cash ban bill raises its ugly head again. For a measure that the government says is highly unlikely, the government seems to be putting all the necessary steps and preparations in place. In a nutshell, the RBA governor's solution to the biggest debt bubble in Australian history is printing more money, more government intervention in financial markets and, ultimately, more debt. One Nation would suggest that a far better way to get the economy going is to increase pensions and Newstart, for example. Put money into the hands of people who desperately need it and who will spend it in their local communities. Put money into infrastructure, such as our water for life project to increase the water reserves of town weirs across rural and regional Australia, droughtproofing our country and increasing productive capacity. What about building the hybrid Bradfield scheme to provide Australia with water and power security? And what about a people's bank to provide real competition and accountability for the major banks? The Bank of North Dakota has done it since 1919. The Commonwealth Bank did it until it was gutted by Liberal-Labor governments.

I end this contribution by asking: where are the government reassurances and denials on this? Instead of taking existing wealth away from everyday Australians, why are we not increasing our productive capacity to create new wealth? One Nation are open to concluding that the Reserve Bank has decided that forcing everyday Australians to lose their money is more desirable than the banks losing theirs. Instead of helping big banks fleece depositors, the government needs to increase Australia's productive capacity to generate wealth for all. I call on the governor to clarify his remarks.