SENATOR MITCH FIFIELD
22 October 2008
E & OE
SUBJECTS: Bank deposit guarantee, Dr Ken Henry, Senate Estimates
Well the Federal Government is under attack today over its decision to provide an unlimited guarantee for deposits held by Australian institutions. The Treasurer has now said that plan will be adjusted to impose a fee on deposits over a million dollars. That follows claims by some fund holders who missed out on the guarantee that they’re being disadvantaged. The Opposition is pressing the Government to prove that it acted on advice from regulators when it introduced the unlimited guarantee. Today the public servant at the eye of the storm, Treasury Secretary Ken Henry, will face intense questioning from the Opposition when he appears before a Parliamentary inquiry. One of the people quizzing Mr Henry today is the Liberal Senator Mitch Fifield. He joins us now and he’s talking to Marius Benson.
Senator Fifield good morning.
SENATOR MITCH FIFIELD:
Good morning Marius.
What’s the question uppermost in your mind that you want answered when you quiz Ken Henry today?
We’ll be asking Dr Henry what advice he gave to the Treasurer and to the Prime Minister and if the Prime Minister’s account to Parliament matches Dr Henry’s understanding. We’ll particularly be asking Dr Henry about the quite stunning revelation today that the Reserve Bank Governor Glenn Stevens wrote to Dr Henry last Friday and said, “not only must there be a cap, but the lower the better.” Which is in complete contrast to what Treasurer Swan told the 7:30 Report last night when he said, “the Reserve Bank is not arguing for a cap; that is Malcolm Turnbull’s policy.” Now I think that comes pretty close on Treasurer Swan’s part to being a fib. But where we really need the accountability is not from Dr Henry. We need it from the Prime Minister. The Prime Minister is the person who should be held to account and he should have made himself available to the Parliament. He should have made a Prime Ministerial statement which would have allowed us to debate these matters. He hasn’t done that. He’s got two days left to face the Parliament and level with the Australian people about how he’s made decisions on the global financial crisis and what their consequences will be. It’s a matter of trust. It’s a matter of competence. And it’s a matter of integrity.
Now the Prime Minister has told Parliament that the Government when it acted to provide an unlimited guarantee on deposits was acting on the advice of regulators. You’re saying that either Kevin Rudd is lying or Dr Henry who passed on that advice is lying.
We’ve got complete confidence in Dr Henry. We know who’s telling the truth. The Prime Minister has a habit of seeking to verbal public servants and hide behind public servants. But Dr Henry is a competent, respected and honest public servant who has served this nation well. The question mark isn’t over him. It’s over Kevin Rudd. It’s over Wayne Swan. This Government has so many lines out there now, I don’t think they know what the truth is anymore.
But if Dr Henry gets up and says “Yes I had advice from the regulators and passed it on to the Prime Minister just as the Prime Minister described to Parliament in question time yesterday,” where do you go from there?
We’ll wait and see what Dr Henry has to say. But we have confirmation today, and we’ll be confirming this with Dr Henry, that last Friday the Reserve Bank Governor, Glenn Stevens, wrote to Dr Henry outlining his concerns about the impact of the Government’s unlimited guarantee for bank deposits and said that not only must there be a cap, but the lower the better. Wayne Swan last night said the Reserve Bank is not arguing for a cap. Now both those statements can’t be true.
You said you still have, or you have confidence in Dr Henry. Do you have full confidence, does the Opposition have full confidence in Glenn Stevens as well, the RBA chief?
Of course, absolutely. Glenn Stevens is a terrific Reserve Bank Governor. The question mark here isn’t over the official economic family. It’s over Kevin Rudd and Wayne Swan. And one of the great pities of this saga is that the Prime Minister has put the Reserve Bank and the Treasury into the middle of politics and into the middle of controversy. That’s not fair. It’s not the Reserve Bank Governor and it’s not the Secretary of the Treasury who are accountable to the Australian people. It’s the Prime Minister of this nation. He should have made a ministerial statement to the Parliament. He hasn’t done that. If he’d done that it would have provided the opportunity for debate. He wants to avoid debate. He should forget about appearing before hand-picked television studio audiences and he should submit himself to the scrutiny of the Parliament.
But isn’t the Opposition equally dragging these public servants into the political spotlight by quizzing the source of the advice that the Government gets? Obviously the Government relies on the public service for advice. You’re now drilling down to find out what the advice has said.
No not at all. We’re doing what an opposition should do which is to hold a government to account. We’re asking questions. The Government says that you can’t ask questions and be bipartisan in support of the Government’s policy in relation to the economic crisis. But you can support the broad thrust of the policy intent of the Government and also ask probing questions, which is exactly what we’re doing.
Do you think it might be a fairly long and tough session for Dr Henry in the estimates committee today?
Well estimates hearings are always long and pretty intense affairs but Dr Henry has been through plenty of them before so I think he will take it in his stride.
Senator Fifield thank you very much.
Thank you Marius.