Dear Ture ,
This is the first e-newsletter I have sent since I became Leader of the Opposition on 16 September. So please accept my apologies for not writing earlier!
We have all been immersed in the challenges of the global financial crisis.
Although the Australian economy is robust, and our banking sector as strong and sound as any in the world, there will be consequences for our nation arising from the turmoil in world financial markets.
This will present difficult challenges for policy-makers here. In a time of great uncertainty, it is critical to this nation’s economic well-being that we get the policy responses right.
I discussed these current developments yesterday at the Global Foundation in Melbourne, and the speech is here.
The Economy: Facing the challenges
Australia is currently facing one of the toughest economic challenges since the Great Depression.
With the events in the United States over recent weeks, the Congressional and presidential campaign debates over the bailout package and the extraordinary fluctuations on Wall Street and other markets, what are the implications for Australia, for Australian families, businesses and our economic future?
Firstly, it is important to remember that Australia and the United States are very differently situated.
While the crisis in the US stems from years of imprudent lending, an unsustainable housing bubble and subsequent collapse in liquidity and confidence, Australia is very different.
I spoke on Friday, 10 October, to the State Council of the LNP in Townsville about the origins of the financial crisis and its implications for Australia. On behalf of the Opposition, I called for a $100,000 deposit guarantee and investment in the mortgage market to promote competition. The Government reacted by establishing an unlimited bank deposit guarantee which, while no doubt well intended, has turned out to be a serious blunder with adverse consequences for hundreds of thousands of Australians and serious distortions in the financial markets. You can read the 10 October speech here.
Our banks are well-regulated and well-capitalised. Sub-prime loans, unlike those in the US, make up a tiny percentage of our overall mortgage book - here they are less than 1% of the total mortgage book, in the USA they represented about 15% of the total and in 2006 about 40% of new housing loans were subprime.
In fact, our economy is much stronger. We have a Federal Government with no debt, thanks to over a decade of good economic management under the previous government, which paid off all of the debt inherited from the Keating era.
So, we are in good shape but nonetheless we cannot ignore this crisis. We are in the middle of a financial storm and we will get wet, but we will not sink.
That is why I have offered the Government the opportunity to discuss the economic crisis on a bipartisan basis. You can see here the text of a bi-partisan motion on the financial crisis to which we sought (but failed to obtain) the Government's support several weeks ago in Parliament.
It is crucial in times like these to reach across the political divide and bring our experience, expertise and perspectives together to create policies that will provide additional stability and resilience to the Australian economy.
Since the announcement of the measures by the Prime Minister, we have sought to hold the Government to account, urging comprehensive disclosure of the economic advice. This would make it easier for people to assess the government’s decisions, to make informed assessments of the implications, and, accordingly, to make prudent financial plans for their families or businesses.
The Opposition may choose in times like this to take the Government on trust and offer bi-partisan support for its measures, but that does not mean we should be as compliant and obsequious a cheer squad as Mr Rudd's own backbench. Our duty is to encourage the government to deal honestly and openly with the Australian people.
It is not as though the Government's responses have been particularly encouraging.
On 21 October, The Australian reported that the Reserve Bank of Australia had on 17 October voiced strong concerns about the disruptive effects on the economy of the Rudd Government’s decision to extend an unlimited guarantee to bank deposits in Australia. It was not until October 24 that the Government abandoned the unlimited guarantee and established a cap of $1 million after which the guarantee would attract a fee.
The Opposition, like the Australian people, took the Prime Minister on trust. While we had proposed a limited deposit guarantee, we nonetheless gave the
Prime Minister our support on his unlimited deposit guarantee taking him at his word that he had developed it in the closest collaboration with the Reserve Bank. As it subsequently turned out he had not even spoken to the Reserve Bank directly but had
simply received a verbal assurance from the Treasury Secretary that his plan had the RBA's blessing.
As it turns out, the unlimited guarantee was a serious policy blunder - made in haste and with too little care. The Government has already pared it back to a limit of $1
million, but much of the damage is done. Mr Rudd announced some new measures two days ago apparently designed to encourage mortgage funds to turn themselves into banks. This has been rejected as impractical by most of the industry and certainly offers no
short term solutions to the problems created by his decision on 12 October.
We remain ready to work collaboratively with the Government to find solutions to these problems both those which arise from the global financial crisis and those created by inappropriate Government policies in Australia. But that
does not mean simply providing unquestioning support for every twist and turn in Government policy. It means sitting down and working together. Now that offer has been rejected - but it remains open.
In this e-newsletter, read on about:
Wentworth News
New Shadow Ministry
Recently I announced the Coalition’s new Shadow ministry.
Australia currently faces economic circumstances that, for many, are unprecedented in our lifetimes.
At the same time, we must deal with enormous environmental challenges – water scarcity, climate change and of course, in that context, an emissions trading scheme.
Our new Shadow ministry is a powerful team – one which will tackle both these challenges and provide the leadership and direction Australia deserves.
My Deputy, the Hon Julie Bishop MP is the new Shadow Treasurer and she comes to this office with a formidable combination of ministerial and commercial experience.
The Shadow Ministry also includes:
• The Hon Warren Truss MP as Shadow Minister for Trade, Transport, Regional Development and Local Government
• Senator the Hon Nick Minchin as the Shadow Minister for Broadband, Communications and the Digital Economy
• Senator the Hon Eric Abetz will be responsible for Innovation, Industry, Science and Research
• The Hon Andrew Robb MP as Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design
• Senator the Hon Helen Coonan will be responsible for Foreign Affairs
• The Hon Joe Hockey MP as the Shadow Minister for Finance, Competition Policy and Deregulation
• The Hon Ian Macfarlane MP as the Shadow Minister for Energy and Resources
• The Hon Tony Abbott MP as the Shadow Minister for Families, Housing, Community Services and Indigenous Affairs
• Senator the Hon Michael Ronaldson as Shadow Special Minister of State and Shadow Cabinet Secretary
• Senator the Hon Nigel Scullion as the Shadow Minister for Human Services
• The Hon Greg Hunt MP as the Shadow Minister for Climate Change, Environment and Water
• The Hon Peter Dutton MP will be responsible for Health and Ageing
• Senator the Hon David Johnston is the Shadow Minister for Defence
• The Hon Christopher Pyne MP as the Shadow Minister for Education, Apprenticeships and training
• Senator the Hon George Brandis SC as Shadow Attorney General
• The Hon Michael Keenan MP as Shadow Minister for Employment and Workplace relations
• The Hon Dr Sharman Stone MP will be responsible for Immigration and Citizenship
• The Hon Steven Ciobo MP as the Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts
You can see the full Shadow Ministry listing here
On 22 September the Coalition introduced the Urgent Relief for Single Aged Pensioners Bill 2008 to provide – from 20 September - $30 per week to single aged pensioners, and single recipients of the Age Service pension and Widow B pension.
We introduced this bill as many older Australians are struggling to afford the basic necessities to live with dignity. Single pensioners expected relief this year from the increasing cost of living pressures – that is what Labor promised and failed to deliver.
The Senate Inquiry into the Cost of Living reported in March 2008 and outlined the critical circumstances of many pensioners due to the increased cost of living.
The current single rate of pension is 60 per cent of the combined couple rate, which is lower than the average for major OECD countries which stands at 63 per cent.
No extra relief was provided in the Budget.
Our proposed increase of $30 per week would have brought the single age pension in line with the OECD average.
After insisting for many weeks that any pension relief would have to await a formal review not due for completion until next year, the government chose in the recent $10.4 billion stimulus package to give a one-off payment of $1400 to single pensioners and $2100 to pensioner couples.
We welcome this. But we wonder why it took so long.
The Coalition managed and reformed the Australian economy to give it the strength to be able to afford increases to aged pensioners such as the Utilities Allowance and real increases to the pension.
During the period of the Coalition Government, the pension increased by 57 per cent in nominal terms – 24 percentage points above inflation. This was through good economic management and adjustments to the pension when needed – not just commissioning reviews upon reviews.
On 29 September the Productivity Commission (PC) released a draft report on Paid Parental Leave. The PC was asked to identify paid maternity, paternity and parental leave models that could be used in the Australian context.
The key features of the proposed model in this draft report include 18 weeks of paid parental leave, which must be commenced after any period of continuous leave available at the birth of the child and before six months after birth.
An additional two weeks would be available as paternity leave. The paid leave would be at the adult minimum wage (currently $543.78 per week) and would not be means tested – this is $9788 for the 18 weeks.
The Commission proposes that families not eligible for paid parental leave – those at home for example – would receive the equivalent of the baby bonus ($5000) through a new maternity allowance. The report is available to read here
The Coalition is committed to looking after all mothers and new parents irrespective of whether they are working or not.
I invite you to make a submission to the Productivity Commission – these are due by Friday 14 November 2008. The Commission will also be
holding public hearings over the three weeks from Monday 10 November and is due to present its final report to the Government by February 2009.
There has been a lot happening in Wentworth including the naming of a gate at the Montefiore home in Randwick in honour of the Holocaust heroine, Rosa Robota, triumphant debaters at Kambala, another successful art auction to
support WAYS and a really inspiring Cook4Peace day at "Our Big Kitchen" at the Yeshiva Centre in Bondi involving young Jewish and Muslim students preparing a meal they then shared (and it was very tasty too!). Click here to read more.
Malcolm Turnbull
This email was sent by Malcolm Turnbull MP, Level 1, 5a Bronte Rd, Bondi Junction NSW 2022 to time2008@bigpond.com
