Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

I rise to speak on the Car Dealership Financing Guarantee Appropriation Bill 2009, which has been the backdrop of some current events over the last week. The opposition will not be opposing the passage of this legislation. Car dealers are encountering serious and genuine difficulties obtaining finance in the current economic climate. We do know that the global financial situation has contributed to a freezing up of global credit markets, with risk averse lenders re-evaluating many of their businesses and reluctant to lend. But there is no doubt that the Rudd government’s ill-considered bank deposit guarantee has made the situation far worse, as foreign banks and other financial institutions have come under enormous pressure as nervous customers seek the safety of government guaranteed deposit-holding institutions.

These factors contributed to two major finance companies, GE and GMAC, withdrawing from the car dealer wholesale floor plan finance market earlier this year. Many concerned dealers, who rely on readily accessible finance to drive their sales, have understandably found themselves in a very vulnerable financial situation. I understand that potentially hundreds of dealers, particularly in rural and regional Australia, were at very serious risk of becoming financially unviable if they were not able to access alternative sources of credit.

The coalition has always held the view that the best way to assist these dealers is to persuade GE and GMAC to withdraw their participation in the car dealer finance market in a more ordered and considered way rather than simply pulling up stumps on 1 January, as they advised they were going to do. Thankfully, both companies have opted to withdraw more gradually, and many other finance companies have stepped in to offer finance to these dealerships. This means the expected amount of guaranteed funds has declined from $2 billion to the most recent estimate of around $450 million. So the government is pushing ahead to establish a special purpose vehicle it has dubbed the OzCar fund, and the major beneficiary will be Ford Credit.

An important fact is that Ford Credit was not originally targeted for the government scheme. The parameters were changed to accommodate Ford Credit when it became clear it required assistance. The coalition does not quibble with Ford Credit’s inclusion in the scheme. However, the process of negotiation with Ford Credit raises serious questions about the government’s behaviour. These questions go to the heart of the saga which has unfolded over the last week. They go to the heart of this government’s credibility and they raise serious doubts about the Treasurer and his honesty.

All the available information suggests that Mr Swan has misled the parliament. In previous governments, misleading the parliament was considered a serious and sackable offence, certainly an offence which the previous government took very seriously. But the current government is intent on playing a game of smoke and mirrors to obscure serious questions that Mr Swan must answer. Mr Swan has repeatedly stated that the now very well known Mr John Grant, a personal friend and donor to the Prime Minister, an associate of the Treasurer and someone from whom he bought a car, has received ‘no special treatment’. Mr Swan told parliament on 15 June, referring to Mr Grant: he ‘received the same assistance as any other car dealer’. Mr Swan had previously said, in the House of Representatives on 4 June, in relation to the representations by his office:

I have no idea what the outcome of that was.

He said so in subsequent media interviews as well. Both Mr Swan and the Prime Minister have said that they stand by those comments 100 per cent. But we have good reason to be very sceptical about the Treasurer’s statements.

Let us consider for a moment the chronology of events which led to this saga. Mr Bernie Ripoll, a Queensland Labor backbencher, referred the case of Mr Grant to the Treasurer’s office. A senior staffer in the Treasurer’s office contacted a Treasury official who was responsible for OzCar to see if he could assist Mr Grant. That Treasury official has stated that it was clear to him that Mr Grant was ‘not your average constituent’ and was an ‘associate of the Prime Minister’.

The government has called into question the testimony of that particular Treasury officer, but we do not have to rely on his testimony to gauge the importance which was placed on the case of Mr Grant. There is ample evidence which testifies to the importance that the Treasurer’s office placed on this case. Firstly, the officer who was assisting Mr Grant, at the request of the Treasurer’s office, took extraordinary steps to assist Mr Grant. The officer met with Ford Credit, who were seeking access to up to $450 million in taxpayers’ money from the government. That meeting took place in Melbourne on 23 February. At that meeting, the officer raised the case of Mr Grant on behalf of the Treasurer.

There were two unusual facts about the request he made to Ford Credit for their assistance to Mr Grant. Firstly, Mr Grant operates a Kia dealership, not a Ford dealership, and Ford Credit only services Ford and Volvo dealerships. Secondly, the Treasury officer gave representatives of Ford Credit Mr Grant’s mobile phone number with instructions to contact him and see if they could assist. This raises very serious issues. Mr Deputy President, place yourself in the shoes of Ford Credit. They desperately need finance to assist their dealers around the country who face financial ruin if they are not able to access credit quickly. But Ford Credit was not originally eligible for the scheme, and they were engaged in a lobbying effort for the scheme’s parameters to be altered to include them. At a meeting with the Treasury official—who would have significant influence, you would think, on whether or not they gained access to the scheme—they were asked to do a favour for someone they would not ordinarily assist, someone who did not operate a Ford or Volvo dealership. It was a favour for no less than a personal friend of the Prime Minister. It becomes pretty clear what is expected of them in that situation, and it is highly inappropriate. It was not what Ford was expected to do—you cannot blame Ford—but the expectation that was placed on Ford by the government that was inappropriate. It is telling that the government is not able to point to any other instance where a senior Treasury official, acting at the instruction of the Treasurer’s office, provided the mobile phone number of a dealer in need of help to Ford Credit, and it is also telling that it was provided at a point where Ford Credit was most likely to be eager to please.

But these are not the only issues in the case of Mr Grant. In an effort to demonstrate that Treasury officials and the Treasurer’s office were going to equal lengths for other dealerships, Mr Swan’s office has released a series of emails about other dealers—emails which Senator Abetz referred to in his contribution. One of these was raised by a Liberal backbencher. The government exclaimed: ‘Aha! Gotcha! See: the government were willing to help anyone who needed assistance. The PM’s mate got no special favours.’ That is the thesis from the government. It is a great argument except for a few inconvenient truths. We know from emails originally provided to the Senate Standing Committee on Economics that the Treasurer took a very personal interest in the case of Mr Grant. Emails on the matter to and from his staff and the Treasury officer were cc-ed to the Treasurer, and his staff even went to the extraordinary length of faxing all email correspondence from Treasury to Mr Swan’s home fax machine.

The Treasurer has attempted to suggest that he was very interested in this issue generally and concerned about the plight of all car dealers. If he were being truthful, I think most of his fellow ministers would have to hang their heads in shame. Do they all have constituent inquiries of that nature, in that detail, faxed to their homes too? I would be surprised. But, unsurprisingly, other dealers did not get this rolled-gold treatment. Of all other emails made public by Mr Swan’s office, none state that they are being faxed to his home—not even cc-ed to Mr Swan. Why, then, the special treatment for Mr Grant? Is it possible that it just might be because he happens to be a friend and donor to the Prime Minister, or is it simply a coincidence that Mr Swan followed every email on Mr Grant’s case with the Treasury?

The government have attempted to make this debate about the opposition. They say the opposition have smeared Mr Rudd and Mr Swan, that we have pursued this issue too vigorously and that we should all just let it be. In effect, they are saying, ‘Move on; there’s nothing to see here.’ I am sure all governments would love it if oppositions did not pursue allegations of misconduct—you cannot blame them; it is fair enough—but, unfortunately for Mr Rudd and Mr Swan, that is not going to happen, because it is our job to follow up inconvenient matters. That is what the parliament is here for. That is why we have Senate committees: to uncover the truth about government behaviour—maladministration and inappropriate behaviour.

It seems, however—I hate to say it—that Senator Hurley missed that particular civics lesson at school, judging by her disgraceful conduct in the Senate hearing last Friday. Efforts by opposition senators to uncover the truth about contact between Treasury officers and the offices of the Treasurer and the Prime Minister were repeatedly derailed. Senator Cameron, who served as the Treasurer’s—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Senator Fifield, I have just been reflecting on what you have said, and I think your comments about Senator Hurley should be withdrawn.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

I withdraw them, Mr Deputy President. On the subject of Senator Hurley, her colleague Senator Cameron served as the Treasurer’s mailman at the committee, delivering Treasury emails. After all, you have to find a job for Senator Cameron, and it is good that the government found one for him. Senator Cameron was also the chief interference runner, repeatedly interjecting as Senator Abetz was questioning witnesses.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

He scored some own goals.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Indeed he did, Senator Parry. On other occasions Senator Hurley, in the chair, asserted that the Treasury officials had answered Senator Abetz’s questions before they had even been given an opportunity to respond. Senator Hurley also repeatedly asked witnesses if they would like to answer the questions. Mr Deputy President, you would know that it is not the role of a chair to determine which questions have to be answered, and it is certainly not the role of a chair to tell witnesses that answering a senator’s question is an optional exercise. That is a matter which I think needs to be looked at at another time, because the role of chairs in this parliament goes very much to the integrity and good functioning of this parliament.

Mr Deputy President, witnesses before a Senate committee are effectively under oath. They appear before the Senate to answer its questions and are expected to do so to the best of their ability. As I say, I do not think the unprecedented intervention by the chair helped uncover the truth at that committee. It is important, I think, that all senators take very seriously their responsibility to uncover the truth and ensure that Senate committees fulfil that task. It is clear that the government has a lot that it wishes to hide in relation to OzCar. They would not be engaged in the unprecedented smear campaign against the Leader of the Opposition through the media and the parliament if they were not worried—and, for that matter, also the smear campaign against Senator Abetz.

The publicly available evidence makes it clear that Mr Swan does have serious questions to answer. His suggestion that Mr Grant was the recipient of normal constituent services is laughable. Mr Grant was clearly the beneficiary of special treatment. No other car dealer received the care, attention and assistance as promptly or as comprehensively as Mr Grant did. Mr Swan needs to answer the charges against him. He needs to fully disclose any other matters which are relevant to this case, and I hope he does so for the proper functioning of this parliament—that is, that ministers are open, honest and transparent. That is all the opposition is seeking: answers to legitimate questions.

Just before I conclude, I cannot finish without responding to some of the comments and some of the contributions of Senator Brown earlier in this debate where he said that the coalition had vetoed a reference to the Privileges Committee. He said that the Senate, and the opposition, had effectively vetoed a reference to a court—viewing the Privileges Committee as a court of the parliament. I think the Senate took the right decision. The Senate did the right thing. The Privileges Committee has never been used for partisan political benefit and it is important that this chamber ensures that the Privileges Committee is never used for that sort of purpose. One of the great strengths of the parliament is the Privileges Committee. Its operation goes to the integrity of the parliament. A Privileges Committee operating correctly and appropriately is one of the safeguards ensuring that the parliament and senators are behaving appropriately. It is for that reason that I believe the Senate took the appropriate decision—took the decision that it did—that the Privileges Committee not be embroiled in what was clearly a very partisan and political reference to it. That is not the purpose of the Privileges Committee.

The Senate has made its decision. It is not a decision that Senator Brown likes. Senator Brown is something of a sore loser. He has lost a few things recently—I think there was a court matter and now he has lost a vote here on the floor of the chamber. I think Senator Brown was upset because the Senate had the temerity to defy ‘the will of Bob’. But the Senate has made its decision and it was the appropriate decision. Senator Brown also, I thought in a very cheap point-scoring exercise, criticised Senator Abetz for, in his words, ‘fleeing the chamber’. Senator Abetz did not flee the chamber; Senator Abetz was paired. Senator Abetz has stated to the chamber that he thought that, given the matter which the Senate was deliberating on related to him, the appropriate thing was not to be in the chamber. I think Senator Abetz was right to do that. I can imagine how, if Senator Abetz had stayed in the chamber and cast a vote on the matter, Senator Brown would be screaming and hollering how inappropriate it was that Senator Abetz was involved in the deliberations.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. Senator Fifield has reflected on comments that Senator Brown made in relation to Senator Abetz fleeing the chamber. My understanding is that Senator Brown then withdrew that and replaced those words with ‘leaving’.

Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

I am not sure that is a point of order.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

Mr Acting Deputy President, it is about correcting what is on the record, and I would like Senator Fifield to take that on board.

The Acting Deputy President:

I invite Senator Fifield to address that matter if he chooses to do so.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Mr Acting Deputy President, I am not sure I have to correct anything here because those words were uttered in the chamber. I think it was a cheap and unnecessary point made by Senator Brown. Senator Abetz did the right thing. If he had stayed in this chamber and taken part in the deliberations on that matter then Senator Brown would have been screaming and hollering that it was inappropriate for him to be here. So I feel for Senator Abetz. He really cannot win when it comes to Senator Brown. Senator Abetz is a man of great integrity. He is a good and honest servant of the parliament. He has conducted himself appropriately at all times. I think the reflections that have been made on him in this place and outside are totally unwarranted. He has been fulfilling his duty as a senator—which is to seek the truth. It is not always comfortable and it is not always convenient, certainly not for those who are being questioned, and it is not always convenient for the person asking the questions. But he is fulfilling his obligations as a senator and as a shadow minister. With those remarks, I will conclude and commend the bill to the chamber.

Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Macdonald, you are not on my speaking list. Do you wish to speak?

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

No, I was not. But, yes, I do wish to speak. As a senator in this chamber I would like to exercise my right to speak on any bill.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. Is this appropriate? The normal courtesies of the chamber and the way in which we operate are that we are informed in advance as to who is going to speak on a bill. That has not happened in this case. Senator Macdonald, I would accept, has a right to speak on a bill, but the courtesy and the way the chamber operates in practice is that people are notified.

Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Sherry, there is no point of order. As you point out, any senator has a right to speak when recognised by the chair. I am recognising Senator Macdonald.

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

Thank you, Mr Acting Deputy President. I was not listed to speak. I did not intend to, but I was swayed by the eloquence of the previous speaker, Senator Fifield, on this. I thought I should take just a couple of minutes of the Senate’s time to, first of all, support what Senator Fifield said about Senator Abetz. A more assiduous, honest and competent representative in this chamber you would not find. Everything Senator Fifield said about that I agree with. I also support what Senator Fifield said about the actual bill before us, the Car Dealership Financing Guarantee Appropriation Bill 2009.

I just wanted to raise in relation to this bill a matter of particular interest to an area of Queensland where I spend some time, and that is up in the north and out in the west. I heard on Radio National this morning an interview between James Carleton and a person called Jane Colvin, who is from the Holden dealership in Longreach. I will read parts of the interview and will not say much more. I will then conclude my contribution on this bill. Ms Colvin was asked by the interviewer about what assistance the Holden dealership in Longreach got in relation to supporting finance. Jane Colvin said:

We rang our local federal member and he did email us back with the initial press release on 5 December. We then emailed him—I think it was on 7 December and again on the 15th—asking him what to do, how to go about chasing it up—

that is, getting some support for their floor plan. She went on:

We also had our local bank manager trying to chase it up—just how to go about getting the assistance that they were all talking about. And bear in mind that this whole thing is not about any of us getting money for free; it’s simply about the government guaranteeing funds so that the companies can lend it back to us. We’re not going to run off with the money. It’s not free money; it’s simply a guarantee of a loan. We never received anything back from the politicians after that, basically. We contacted others as well as our local member, but we really did not get any information.

James Carleton said some things and then he said:

You’re in the central west—that would be Flynn, a marginal Labor electorate in central western Queensland. I would have thought that your local MP would have been onto this very quickly indeed, given the state of his political contest in that electorate.

Ms Colvin answered:

Well, we basically thought so too. We did actually contact some of our senators and so forth … they did raise it with various people for us, but as far as getting any information—which probably needed to come from Chris Trevor’s office—it was just a blank.

Then there was another question and Jane Colvin finished by saying:

We actually are waiting to find out who is being supported by OzCar. This program—

that is, the Radio National program—

has actually given me more information than I have been able to achieve through my politicians and so forth. So, yes, we will be getting onto that.

Here is a motor dealership in Longreach, in central western Queensland, desperately trying to get information about this from the local Labor member, and they do not even get a return phone call. They tried a couple of times, emailed him, and they could not get any response. Compare that with John Grant Motors. Not only did John Grant get a call back from his local member, I assume, but he got a call from the Treasurer. The Treasurer of our nation actually sent emails to him, got the secretary of the Treasury to be involved and got people to talk to Ford Credit about this issue.

There seems to be one rule for people who happen to know the Prime Minister or the Treasurer and another rule for those motor dealers in Longreach in central western Queensland who are desperately trying to find out from their Labor member what this is all about and cannot even get a return phone call.

I thought I read somewhere that Mr Swan said that the guy in Mr Rudd’s electorate was just treated as any normal constituent would be. Well, if he was treated the same way as this dealer in Longreach was, he would not have got a phone call from anyone, he would not have been given any information and he certainly would not have had the highest officers of our land approaching Ford Credit about him. He would have been ignored, as were these dealers in Longreach in central western Queensland.

I think this highlights the issue Senator Fifield was talking about in just how this issue has been dealt with by the Prime Minister and the Treasurer. I do not want to take the time of the Senate any longer. I appreciate I have another 15 minutes, but I am conscious that there are other bills to deal with, so I will not address other issues which I think have been well covered by Senator Fifield. In that respect, I support his remarks.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The Car Dealership Financing Guarantee Appropriation Bill 2009 is an important component of the government’s response to the fallout from the global financial crisis. The bill is essential to support the operations of the Special Purpose Vehicle, the SPV, that has been established to facilitate liquidity for commercially viable car dealerships and it will in turn provide support for hundreds of small businesses and thousands upon thousands of jobs in this sector.

On 5 December last year, the Prime Minister and the Treasurer announced that the SPV would be established, with the support of Australia’s leading banks, to provide liquidity to car dealer financiers who have encountered financing difficulties as a result of the global financial crisis. The SPV, otherwise known as OzCar, was to provide critical wholesale floor plan financing to commercially viable car dealerships that were financed by GE Money Motor Solutions or GMAC, both of whom at that point had announced their intention to exit the Australian dealer floor plan financing market.

As flagged in December, the Treasurer announced on 13 May 2009 that the OzCar facility will provide for the rolling of Ford Credit into the facility in light of the serious funding pressures confronting Ford Credit. This will support the availability of critical wholesale floor plan finance to car dealerships, helping them to stay in business over the next 12 months.

The government has taken the action, and I might indicate that it is being supported by the Liberal-National Party, to ensure that commercially viable car dealerships will have continuing access to finance. In the absence of the finance, the car dealers may be forced to close. If the car dealers cannot obtain finance they may be forced to close. That would put at risk thousands of jobs in the Australian car industry. According to the Motor Trades Association of Australia, the MTAA, which is the representative organisation for car dealerships, there would be up to 75,000 jobs at risk. This government believes in being prepared. It believes in decisive action in the face of the global financial and economic crisis. It believes it is appropriate to be prepared for eventualities that may occur as a fallout from the world financial crisis. The government is simply not prepared to allow tens of thousands of jobs to be lost in the car dealership sector of the motor industry.

At this stage it would be useful to briefly describe how Ozcar will actually operate and, subsequently, the importance of this appropriation bill that has been the subject of debate today. In order to provide liquidity to commercially viable car dealerships, the Ozcar SPV will raise funds by selling securities to the four major banks: ANZ, Commonwealth, NAB and Westpac. The SPV will finance eligible financiers who on-lend the funds for wholesale floor plan finance to car dealerships. Given the very difficult and tight global capital markets, the support of the four banks is essential to secure buyers of Ozcar securities and hence facilitate liquidity.

Ozcar can raise funds only if it is able to sell securities. The government is supporting the Ozcar SPV by putting in place a Commonwealth guarantee on various securities issued by the SPV. This guarantee is required because the participating banks have agreed to provide liquidity to the Ozcar SPV only through the purchase of securities on the basis that non-AAA rated securities will be Commonwealth guaranteed. This legislation provides for an appropriation to support this guarantee. Whilst the government guarantee was executed on behalf of the Commonwealth on 23 December last year, an appropriation is required to provide comfort to the purchasers of Ozcar securities that the Commonwealth will meet any payments required under the guarantee.

The SPV does not require any capital contribution by the Commonwealth and will not have a direct impact on the budget bottom line—other than in the very unlikely event that the guarantee is called upon. The SPV will be open for 12 months and there will be an orderly six-month wind-down after that. So there is a sunset provision. It is expected that, once Ozcar facilities wind down, those dealers who relied on the SPV for financing would be able to secure alternative finance in the expectation of improved global and domestic capital markets. This situation will need to be reviewed if there is no marked improvement or if the market further deteriorates.

The contributions from Liberal-National Party senators opposite covered a wide range of issues other than the actual guaranteed appropriation which we are dealing with, and I respect their right to range far and wide about a whole range of issues that they claim are relevant. I am not going to take the time of the Senate to respond, but I will make a couple of points about some of the claims that have been made by Liberal-National Party senators. With respect to the last contribution, from Senator Macdonald, Senator Macdonald rose to speak without observing the due courtesies of the chamber, which are to notify, on a list that is provided, that you intend to speak on a piece of legislation. He has breached the conventions and the courtesies that this chamber operates on. I make that observation.

But I think it is a little worse than that in terms of Senator Macdonald’s contribution, because we have had extensive discussion, debate and motions today and finally reached agreement on how the chamber would proceed in terms of the legislation before us. No less than the Leader of the Opposition in the Senate, Senator Minchin, indicated that certain pieces of legislation would be dealt with, and there was a commitment to that. I respect Senator Minchin; I have always believed that he is someone who, when he gives his word, keeps it—on behalf of the opposition. And what do we have? We have Senator Macdonald getting up here to speak in contravention of the normal courtesies in the chamber—on top of Senator Minchin having given assurances that the legislation would be dealt with in a considered and orderly fashion. That is the way Senator Macdonald wants to behave; that is a reflection on him.

Senator Abetz made a wide-ranging contribution, and there are two particular sets of issues I want to go to. Senator Abetz’s basic argument on this appropriation bill—and firstly he was supporting it—was that this appropriation was necessary because ‘the world financial crisis has been exacerbated by various acts of economic stupidity and economically irresponsible decisions of this government.’ I strongly refute that. I strongly reject that argument. It is amazing that there is almost no-one in Australia, or indeed the world, who believes that the issues that we are dealing with here—including this guarantee appropriation in the case of car dealer finance—has been brought on by the actions of this Labor government, other than some members of the Liberal-National Party opposition.

The fact that we are dealing with extraordinary pieces of legislation for extraordinary times is a consequence of the world financial crisis, which had its genesis in the United States. Unfortunately, that financial crisis led last year to the almost total seizing up—to use a car term, I suppose—or collapse of world financial markets. Confidence in banks was collapsing, particularly in Europe, the UK and the US, and interbank lending was grinding to a halt. In that context, a range of governments were placing guarantees on bank deposits, bank transactions and interbank lending, and the Rudd Labor government acted decisively to provide a guarantee. As I say, they are extraordinary circumstances.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

You should have put it on GMAC and GE Finance as well.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The reason that we are considering this legislation is to provide a level of certainty in another form. If Senator Williams had cared to carry out even some modest examination of the guarantees put in place around the world—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I spoke to you about it.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The guarantees around the world have largely—if not exclusively—been confined to banks, credit unions and building societies. There is an extensive range of other types of financial instruments—property trusts, margin lending, superannuation funds or pension funds and, in this case, commercial financing arrangements for car dealers—and, overwhelmingly, they were not the subject of a guarantee in other countries.

I accept that Senator Fifield has a considerably greater understanding of current economic circumstances and a considerably greater degree of financial literacy than Senator Abetz. But for Senator Abetz to come in here and assert that we are dealing with these sorts of consequences of the world financial crisis because the Labor government has carried out ‘acts of economic stupidity’, ‘economically irresponsible decisions’ and has exacerbated this is just patent nonsense. I referred in question time today to the observations of the OECD and the IMF, leading world economic institutions, who have pointed out that the Australian economy is doing very well. In fact, it is the best performing economy in the world compared to the 29 other countries in the OECD. Of comparable economies, the Australian economy is the only economy that is not in recession. And whatever people might think about the actions of this Labor government or the former Liberal government, I think the observations of the IMF and the OECD in terms of the government’s interventions—in supporting those interventions and drawing a reasonable conclusion that the Australian economy is stronger as a consequence—are correct. So the broad thesis and theme of critique from Senator Abetz is just totally wrong.

I would just make a couple of points about Senator Abetz’s comments—which were, I think, partly in defence of himself and partly a continued and unjustified attack on the Treasurer. In terms of the Treasurer’s comments to parliament on the Hansard of 4 June—and all of the debate, questions et cetera that have been posed over the last week—the Treasurer has done nothing that contradicted what he said in parliament on 4 June and he stands by those statements. On 4 June the Treasurer, Mr Swan, said:

… there have been numerous representations made to members of parliament from car dealers right around the country—numerous representations which have been forwarded on to my office and in turn forwarded on to the responsible officials in the Treasury for consideration. There is nothing abnormal about that.

       …         …         …

It is the case that Mr Grant made representations to my office, and he was referred on to the SPV, just like everybody else. I have no idea what the outcome of that was.

And, of course, there were others who were referred on to the SPV and the staff in Treasury—it was not just Mr Grant. There were inquiries from Mrs Kay Hull, National Party member for Riverina; Mr Bruce Billson, Liberal Party member for Dunkley; Mr James Bidgood, Labor member for Dawson; Mr Bernie Ripoll, Labor member for Oxley; Mr Rowan Ramsey, Liberal member for Grey; the Hon. Sharman Stone, Liberal Party member for Murray; and obviously some other Liberal and National party members. The Treasurer has said:

… I have had no discussions with the Prime Minister about this matter whatsoever—none whatsoever.

       …         …         …

… in the case of the Prime Minister and me, there were none.

On the Hansard of 15 June, the Treasurer said:

Mr Grant would have received the same assistance as any other car dealer who was referred through that process received.

The second fact is that Mr Grant received no special benefit from OzCar and no outcome whatsoever from Ford Credit. Fact 3: there were steps taken to help other dealers, and that has been borne out in the course of investigations. The Treasurer did this because there were jobs at stake in the community, as I have outlined in this legislation, and because it was his view in his office that the Treasury should do whatever they could to help dealers who approached the Treasurer’s office. The Executive Director of the Motor Trades Association of Australia, Mr Michael Delaney, said:

The treatment that Mr Grant, a member of mine, got was no different from the treatment all of my other members got on my intervention on their behalf to Mr Grech. They were all treated in the same way, and for the same good reason: there was no other way to do these things. In fact I think Mr Grant has been treated less well because he went to the Treasurer.

Over the last week in the middle of a world financial and economic crisis, we have seen a Liberal opposition that could make only one firm decision in the Senate. The one firm decision they could make was to defer the emissions trading scheme. They decided to put it off because they are so divided. Other areas in which they have decided to make decisions where they are clearly divided are the migration regulations and the alcopops tax. We have heard a lot about smoke from Senator Abetz. Whatever the smoke, I suggest that the fire has well and truly burnt the case that the opposition were trying to advance against the Prime Minister and the Treasurer, for the obvious reason they were relying on a fake email. I am sure a lot more will come out as a consequence of that.

This legislation is important. When I referred earlier to it being very unlikely the guarantee will be called upon and, hence, impact on the government’s bottom line, it is possible that the guarantee will be called upon but we think that is unlikely. Obviously, it is more likely that the special purpose vehicle will be called upon to provide financing in the case of car dealerships. This is an important part of the government’s response to the consequences of the global financial crisis. Any forced closure of otherwise viable car dealerships would have a direct and adverse impact on the Australian automotive industry, including component suppliers, at a time of significant economic challenges. This had potentially grave consequences for the Australian economy, hundreds of small businesses and thousands upon thousands of jobs. The passage of this bill is crucial to the successful operations of the OzCar SPV, and failure to pass this bill would risk the loss of thousands of Australian jobs in the automotive industry.

I am pleased to see the Liberal-National Party are supporting the legislation. They have spent the week scouring second-hand car yards. I suggest they refocus their attention on the issues of the day which will undoubtedly be issues for the next number of years: how to protect and cushion jobs in Australia in the face of this world economic and financial crisis. Nevertheless, I thank them for supporting this legislation. At least they have finally decided to do something positive in the face of this world financial and economic crisis.

Question agreed to.

Bill read a second time.