Portfolio Media Releases

COALITION TO OPPOSE $28 billion RUDDBANK

17th March 2009

“The Coalition will oppose the Australian Business Investment Partnership Bill,” the Hon Joe Hockey, Shadow Treasurer said this morning following a decision by the Coalition Party Room.

“Ruddbank is bad policy. It is supported by flawed legislation which offends every principle of good governance.  It is a thinly disguised attempt by the Rudd Government to establish an all-purpose lending facility with the taxpayer liable for up to $28 billion of debt.”

The Government claims that the establishment of the ABIP is required to support debt in the commercial property sector, at risk due to the perceived threat of foreign banks withdrawing funds yet this will encourage foreign banks to leave.

“Having a taxpayer funded fallback ensures foreign lenders will reduce their Australian exposures,” Mr Hockey said.

“Instead of this proposal Australian banks who are Government guaranteed should expand their balance sheet to cover the foreign bank changes.

“If it is a good deal that is simply not continuing because foreign banks pullout then Aussie banks would be mad not to support a good deal.

“Ruddbank will expose taxpayers to up to $28 billion dollars of debt on a taxpayer credit card already maxed out by Labor’s frivolous spending sprees.”

Mr Hockey also expressed concerns that the ABIP legislation had a number of flaws.

“The legislation says loans can only be made where the assets are financially viable….what does this mean"

“Ruddbank’s lending criteria is too broad. It goes far beyond what was originally announced.  We now know that the legislation allows for loans to be made for other commercial purposes, not just commercial property.  This means funds could be made available, for example, to prop up failing State Government infrastructure projects with taxpayers forced to take on a high level of risk,”

“In a further slap in the face for Australians, Ruddbank will be explicitly exempt from the collusion provisions of the Trade Practices Act.  This will allow the Big Four Banks to act as a cartel, which could have serious implications for competition in the banking sector,”

“Ruddbank is another example of the Government’s bad and ill-considered response to the global financial crisis.  The Coalition will not support policy which could potentially make the current financial crisis worse for Australians,” Mr Hockey concluded.

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