RuddBank, DuddBank..?

As we are all aware, the Rudd Government has been acting proactively and decisively with fiscal stimulus packages that are designed to protect, as far as possible, Australia from succumbing to the negative recessionary pressures facing other nations.

In addition to the boost to the First Home Owners Grant, and the current cash handouts, which for all intents and purposes seem to be having the desired effect – retail spending is up, as is real estate sales at the low to mid range of the market.

Economists have overwhelmingly supported the Government’s initiatives to date, despite opposition from the Liberal party.

In a further effort to keep credit flowing, the Government has proposed a new initiative called the “business investment partnership.”

Valued at some $4 billion, under the proposal, the Government would put in $2 billion and the banks another $2 billion, which would be used to refinance commercial property loans if other banks withdraw credit.

The Government wants the Senate to vote on the bill this week.

Treasurer Wayne Swan insists that the initiative is essential to maintain the flow of credit in the economy, boost confidence in investment markets and protect jobs.

However, the opposition has, quite rightly in my opinion, questioned whether this is an appropriate use of taxpayers’ funds.

In a report published on ABC Online, Opposition finance spokeswoman Helen Coonan says the Coalition has major concerns about the bill, particularly the amount of taxpayers’ money at risk.

She says the Senate has not been given enough time.

It’s certainly the usual ploy of the Government to simply drop a very complex piece of legislation at the last second and then stamp up and down and expect the Senate to pass it without proper scrutiny,” she said.

“This is simply not the way a government would operate if it wasn’t afraid of us having a good look at what is being proposed, not afraid of transparency.”

Senator Coonan says the Government has failed to provide enough detail.

“Our concerns are that there are no lending criteria, there is very important detail missing from the bill,” she said.

“Absolutely nothing, for example, to stop these funds being used for infrastructure to prop up the states and it contains an unacceptable risk to the taxpayer.”

Greens leader Bob Brown says he wants to see changes to the bill to include a limit on executive salaries for any companies that get backing from the fund.

“If it’s good enough for Obama to say half a million dollars is the limit in the United States, why should Rudd, the leader of a Labor Government in Australia, not be able to say the same here?” he said.

“We haven’t agreed to this legislation and we want to see some movement from the Government to give something bank to the taxpayers, who are ultimately going to be funding it.”

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23 Responses

  1. It looks like Swan has already moved to curb executive salaries, not just those signing to this.

    As for the legislation, it is good that the opposition is asking to look at it, and even better that they are not turned it down without looking at it.

    If it gets support from all other corners, as the previous stimulus packages did, then they should be on board.

    although I doubt it.

  2. If by ‘commercial property’ they mean lending to developers of apartments, then I support the measure. The figures show that building of new apartments has all but stopped, putting further upward pressure on housing prices and rents.

  3. Tony

    You wouldn’t be concerned about housing shortages and hyper-inflated prices and rents would you? (wink)

  4. Why, has someone mentioned that topic on here before?

    😆

  5. Not me! It wasn’t me I swear (lol)

  6. We get it Tony, move on

  7. Thanks John,

    I really must stop banging on and on about the same thing. People might get the impression I’m obsessed, or something.

  8. …anything for you Tony , I’m glad to see you’re repentant

  9. Can we get back to the topic pleeeeze… 🙄

  10. We used to have a Bank called the Commonwealth Development Bank. It was part of the CBA which was shut down before privatisation because it did not give a big return to the CBA and was not wanted by large investment corporations as part of the CBA when they purchased shares at the impending privatisation.

    The Development Bank was there for this purpose, to assess proposals which the CBA itself and other mainstream Banks would not fund or would not accept the security being offered ( in one case 6 camels). The Development Bank helped many thousands of businesses start up and succeed whereas they would have never got off the ground otherwise. Many businesses now operating owe their existence today to the forward thinking of this part of the old Government Owned Commonwealth Bank many years ago.

    It seems to me we are simply bringing back something (in a different format) which should never have been allowed to be shut down to simply satisfy the whims of the large institutional investors who sought its demise prior to privatisation of the CBA.

  11. Tony 1.35pm.

    lmao, classic.

  12. Off topic, sorry Reb, but is there a prize for the 300,000 the visitor. (A subscription to John’s email newsletter, or something.)

    *Runs*

  13. Yeh Tony, back on topic pleeeeze… 🙄

  14. Tony@1.48

    ROFLMAO

  15. Tony

    Isn’t this forum simply a front end for John’s email newsletter??

  16. Tony,

    Not only will they get a subscription, they’ll also receive an autographed copy of all the back issues too.

    (postage and packaging not included)

    MODERATOR: FFS will you get back on topic!!

  17. Good. I’ll help you pack them.

  18. We can put all his old posts in the same envelope too. There’s no room around here anymore. Everywhere you look, there’s another McPhilibuster post.

  19. Very hilhairyarse guys…I think I’m getting a stitch and my face is about to crack…Will that be a monthly subscription guys?..oh, and tell all your friends…this offer can’t last long…They’ll also get a free set of steak knives if they subscribe in the next year or so.

  20. It seems to me the the guts of the proposal:

    used to refinance commercial property loans if other banks withdraw credit.

    is eminently sensible. Foreign Banks, for whatever reason, retreat to home territory at times like this and in so doing can leave perfectly viable projects in the lurch.

    Certainly Coonan has a point that it could be used to assist states. While that has risks, of itself it is not necessarily a bad thing.

  21. I agree Nature 5,

    I can’t really see any problems with the idea.

    People (the Liberal Party) seem to have a real problem with the idea of a Government-owned bank, however I really can’t see what the issue is..

  22. reb, on March 18th, 2009 at 3:07 pm Said:

    People (the Liberal Party) seem to have a real problem with the idea of a Government-owned bank, however I really can’t see what the issue is..

    Funny that, reb, they did enough whinging when it was privatised.

  23. The way I see it, this is something that should never have been cancelled in the first place. The privatisation of the Commonwealth Bank was before my time (didn’t have too much interest in politics as a kid), but it sounds to me like another @#$%-up similar to the selling off of our telecommunications infrastructure monopoly in the form of Telstra.

    Is this a pattern I am going to see over & over throughout my life? When the going is good, sell off government (read: public) assets at bargain basement prices. Watch as the corporate raiders rip off everyone involved as much as possible until “something” must be done about it. Then have the current government use the taxpayer’s money to either buyback (at inflated prices) or pay exorbitantly to re-establish the same thing some decade(s) later?

    Seriously, Telstra is going all out to prevent the roll-out of the NBN as much as possible because said roll-out kills a substantial chunk of their monopoly. Telstra was sold at the behest of large (financial only?) corporations because there was alot of profit to be made having a monopoly over Australia’s telecommunications infrastructure. This sounds, to me, like an eerie parallel to the selling off of the Commonwealth Bank (or at least the part where large, possibly financial only, corporations had the “public good” part of the company trashed in order to make money off of the taxpayer)

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