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

My question is to the Minister representing the Treasurer, Senator Sherry. How many hundreds of thousands of investors, many of whom are retirees, remain unable to access $25 billion of their savings frozen in investment funds due to exclusion from the government’s rushed bank deposit guarantee?

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

Thank you for the question, Senator Coonan. Firstly, this government makes no apologies for the introduction of the bank guarantee. We make absolutely no apologies for that. One of the important lessons that the Rudd Labor government learned from the Great Depression is that there are three important broad policies to put in place. The first is to guarantee your banking system, and certainly the circumstances we saw last year necessitated a guarantee of the banking system. Without confidence in the banking system the economy, as we faced last year right around the world when bank guarantees were being implemented, faced collapse. That would have been cataclysmic. That is the first, and we make no apologies for that.

The second is that you deliver stimulus packages. You do not, as occurred in the Great Depression, cut pensions and wages; you implement stimulus packages. We have seen the very positive evidence that has flowed from those stimulus packages. They have helped cushion the Australian economy, along with the bank guarantee. The third is that you do not resort to protectionist measures, which as we know from the Great Depression deepened and lengthened it.

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

What about the frozen funds?

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

Coming back to the guarantee, as a consequence, in part, of the bank guarantee it is true that a range of funds, property investment funds et cetera— (Time expired)

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

Mr President, I ask a supplementary question. Given that over 250,000 Australian investors have now been clearly abandoned by the government and have been without access to their money for nearly 11 months, when will the government secure the release of their frozen investments?

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

That is not true. You have claimed incorrectly that all these investors cannot access their money. That is just not true, Senator Coonan, through you, Mr President. It is important to note that nearly all mortgage funds have been paying a regular income stream. As financial conditions have been improving, thanks to the decisive actions taken by the Rudd Labor government, funds have been able to provide capital withdrawals, with around 75 per cent of funds now providing periodic withdrawals of capital. So the claim by the Liberal opposition, like a range of other claims they have made in response to the Rudd government’s decisive actions to underpin and cushion the economy, is not correct. (Time expired)

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

Mr President, I ask a further supplementary question. Clearly the government has no intention at all of rescuing these people who have had their funds frozen for 11 months. Given that the government’s poorly designed and rushed bank deposit guarantee has had many unintended consequences and excluded investment funds and triggered the lockdown of deposits over 11 months ago, when will the bank guarantee be withdrawn?

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

As I recall those very difficult times for the world financial system, your temporary leader, Mr Turnbull, was urging the government at that time to introduce a bank guarantee. He was urging the government to introduce a bank guarantee before the government took the action. It is true that we differed on the extent to which a guarantee should be provided, but you should check with Mr Turnbull. He might choose to ignore history but my recollection is that he urged the government to introduce the bank guarantee. Of course, we did, I have to say, go further than Mr Turnbull suggested, because we believed that that was warranted in the dire circumstances that this country faced. Time expired)