Transcript

As a servant to the many amazing people who make up our one Queensland community I note that in the last few weeks we have seen with the failure of Silvergate Bank and Silicon Valley Bank what is in aggregate the largest banking collapse in US history. Australia is not America and it is not Europe. If everyone keeps their heads, we will be fine. Our big four banks are bastards, yet they are well capitalised. Nonetheless, it would be wrong to not take this opportunity to revisit how to save a failing bank.  

I remind you that there are two choices: bailing out, with a large injection of taxpayer money, increasing debt for everyone, or bailing in, which is where the banks take their depositors’ money to save themselves. A bail-in still requires the bank to close for days or weeks, preventing customers accessing any money left in their accounts. Business are left without money to pay staff or suppliers. The effect on the economy is catastrophic.

Everyday Australians trying to pay for their shopping would find their account empty or their card suspended. Travellers may be stranded. 

One Nation introduced a bill to prevent bank bail-ins and to protect the people. Labor and the Liberal-Nationals defeated our bill in 2020. One Nation did lead a successful campaign against the cash ban bill that the Liberals, Nationals and Labor proposed in 2021, so Australians can still use cash in an emergency. This is relevant again because President Biden initially chose to seize half of Silicon Valley Bank depositors’ funds and freeze the rest for up to three years. That’s a bail-in. What followed was a run on all banks, forcing the president to backflip and instead initiate a bailout. 

Australia has a bank guarantee scheme, a bailout, but it’s a con trick. There’s no funding and no requirement to use it. It covers only $20 billion per bank—$80 billion total. This is supposed to protect $1 trillion in depositors’ funds. It’s eight per cent. I call on the government to categorically rule out a bail-in and properly fund the bank guarantee scheme.