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

ERTS () (): My question is to the Minister for Finance, Senator Gallagher. Last week I asked questions about the funding for the deposits guarantee scheme, which was designed to protect the money in the bank accounts of everyday Australians—capped at $250,000 per account, $20 billion per bank and $80 billion total. Minister, when the scheme was brought in, the eligible deposits being protected were $650 billion. According to statement 9 of Budget Paper No. 1 of the October 2022 Labor budget—your budget—eligible deposits are now $1.2 trillion. How can $80 billion possibly protect $1.2 trillion in deposits?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I think this question goes to some of the concerns that we're seeing in global financial markets at the moment, and the impact on some banks overseas and some concerns that Senator Roberts is raising about the potential for impact here in Australia. The answer is the same as I gave last week.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

You don't know how to count.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Thank you, Senator Rennick. Would you like leave to speak to this question or am I allowed to? You'd like to, would you?

Sue Lines (President) Share this | Link to this | Hansard source

Minister Gallagher, address your comments to those opposite through the chair. Senator Rennick, resume your seat.

Murray Watt (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Tell us about your Masters in Applied Finance!

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I know responding to interjections is disorderly, but Senator Rennick's got verbal diarrhoea, it seems, this question time. He can't keep it in.

As I said last week, this is something the government is monitoring closely. In fact, the Treasurer is being briefed twice a day on what's happening overseas, and is also being provided with feedback from regulators and from the banking system here. I think it is very good, and I would think that it's something that this Senate would welcome, that our financial markets and our banking system are well regulated, well led and well capitalised, with good liquidity, and we are not seeing the issues that are being seen overseas.

I did undertake, and I'm not sure if we've done this, to provide you with a written response to the question that you raised last week. I'll chase that if it hasn't got to you, as well as anything further I can provide in relation to the answer I've just given.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Roberts, your first supplementary?

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

My constituents, as I expressed last week and in the last question, are concerned. Minister, the protected amount is not indexed and, because of inflation, would need to be increased to $380,000 per account and $115 billion overall just to cover the same amount as the scheme did in 2008. Minister, will you increase the caps on the bank deposit guarantee to make up for inflation since 2008?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

In line with the answer I gave last week, of course the government would respond in relation to concerns that were raised about the operation of our banking system and the impact it was having here. We are not seeing that.

I think Australians should be reassured that the Australian banking system is resilient and that all of our banks, as I said, are well capitalised and have strong liquidity coverage. The Treasury and regulators are closely monitoring the situation about potential impacts for Australia—and when I say that, I mean very closely monitoring. I can understand that people watching what has happened with Silicon Valley Bank and Credit Suisse would have raised concerns. I can understand that. The response is that since the GFC and since the banking royal commission there are measures in place to ensure the strong performance of our banking system, and we don't have any concerns about it.

The P:

Senator Roberts, a second supplementary?

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

Reviewing the minister's answers, I have five questions on the guarantee so far. Firstly, the guarantee has not been adjusted for inflation, and so it offers 34 per cent less protection than when it was legislated. Secondly, the guarantee is not funded. There is no money available to implement it. Thirdly, the scheme only covers 7c in the dollar of deposits. Fourthly, the minister has refused to commit to activating the scheme if it was needed. Minister, can you explain why constituents should not conclude, as many have, that the bank deposit guarantee is a fraud and a lie?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I don't agree with that representation by Senator Roberts at all. I have answered the question in a general sense by saying that, if there were concerns as we saw in the GFC, of course the government, and I presume the parliament, would act. The point I'm trying to make is that at this point we don't have concerns. We do not share the concerns. In fact, we've been given very strong reassurance by the regulators, by the banks themselves and by the systems that have been put in place by this place and the other place to ensure that we have a strong, well regulated, well capitalised banking system to precisely insulate from some of the financial instability that we're seeing elsewhere. Yes, of course, the government would respond if we had to. At this point in time we are assured that that's not the case.