Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Superannuation and Corporate Law, Senator Sherry. As the economic circumstances we face are a once-in-a-generation challenge and have been described as the worst seen since the Great Depression, can the minister advise the Senate on what early and decisive actions the Rudd government has taken during these unprecedented times to soften the impact of the global financial crisis on Australia’s economy and working families? Can the minister explain how, now more than ever, it is of the utmost importance that the government is able to bring its plans into action, including passing key legislation through the parliament?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

As Senator Lundy has quite rightly pointed out, these are unique circumstances and times for this generation, particularly with respect to the operations of the financial markets and the impact on the broader economy. The national account figures released this morning show gross domestic product has grown by 0.1 per cent. As my colleague Senator Conroy has outlined, there are many advanced economies, developed economies, around the world that are now experiencing negative growth and are in recession. Slowing growth in the September quarter shows that Australia does not operate in an economic vacuum; we are impacted by these international economic circumstances and they are impacting right around the globe. But the Australian economy has put in a comparatively stronger performance when compared to many of our international counterparts and the Rudd government has taken early and decisive action to minimise these impacts that we are seeing.

I would like to remind the Senate of a few of these decisive actions. For example, in May the government announced we would provide legislative authority for an increase in Commonwealth government securities issuance up to $25 billion. Secondly, the government has moved quickly to guarantee bank funding. If institutions fail to lend to each other and if businesses, farmers and households cannot borrow then the economy slows and gridlocks. Thirdly, we have acted to protect financial institutions by minimising market manipulation and speculation through supporting a temporary interim ban on what is known as short selling. Fourthly, we have acted decisively to support competition and liquidity in the mortgage market. The government has announced the purchase of some $8 billion of residential mortgage backed securities. Fifthly, the government has acted to introduce for the first time the regulation of all financial services— (Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. The minister has already highlighted a number of important steps the Rudd government has taken to protect the economic stability of Australia, but can the minister highlight any threats to the stability of Australia’s economy and from where these threats emanate?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

I was just going to conclude on a couple of other points where we have acted decisively by way of comparison. As I was mentioning, we have introduced single standard national uniform regulation of all financial services in Australia. We are one of the first countries in the advanced economies to do so. We have learnt some lessons from what occurred with the mis-selling and distribution of mortgage products in the United States. Sixthly, the government has been active all year in coordinating our actions with key global partners. As I said earlier, the Australian economy is not isolated from world—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

All year?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Yes, all year, Senator Abetz. Senator Abetz and the Liberal opposition should have paid a bit more attention to these international factors. The Prime Minister and the Treasurer have been engaged in the meetings of the Financial Stability Forum, the G20 and APEC because these are vital forums to ensure that we have internationally coordinated action. (Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I thank the minister for his thoughtful response and I ask a further supplementary question. Can the minister explain why actions taken by the Rudd government have been critical to ensuring the security of our economy? How have these early actions by the Rudd government ensured Australia’s financial security for the future? Finally, what obstacles stand in the way of these positive outcomes for Australia?

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Rudd Labor government.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

And it is a very good Rudd Labor government too, Senator Abetz—through you, Mr President. I have outlined just some of the strong and decisive actions that this Labor government has taken in response to the worst financial crisis in the last 80 years. Our budget is vital to ensuring a significant budget surplus to assist in cushioning the economy—for example, delivering the $10.4 billion Economic Security Strategy. All those opposite could do was oppose vital budget measures designed to deliver that surplus which is so important to ensuring that we can deliver the range of initiatives in that $10.4 billion Economic Security Strategy. All the Liberal opposition can do, on most occasions, is to adopt a negative approach to the strong and decisive action taken by the Rudd Labor government to protect our economy. (Time expired)