Wednesday 22 October 2008


Malcolm Turnbull got his first real workout as leader of the Opposition last night. He didn't come out well.

It was good watching the unflappable Malcolm Turnbull in a flap last night on the 7.30 Report.

Kerry O'Brien once again proved his skill as journalist - interrogator. As he digs deeper into the whole banking guarantee question and the financial crisis, Turnbull is playing with fire.

At stake is confidence in our banking system and the success of our responses to it. Turnbull's strategy is to test the boundaries here for a political point that looks increasingly flimsy.

The big issue is the one raised by Ken Henry yesterday and concerns the extent to which Turnbull's reckless speculation about the previous $20,000 guarantee covering bank deposits in itself contributed to the need for a hasty but essential response. I for one was surprised and alarmed to discover two weeks ago that the integrity of our savings was being brought into question amidst all of the assurances about strength of our banks. Malcolm Turnbull began that discussion. Everybody knows that when it comes to the banks, perceptions of security are everything. In a time of international turmoil, the sensitivity is heightened.

It should be remembered that Turnbull spent months berating Wayne Swan over the impact of his declarations - proven correct - that the "inflation genie" was out of the bottle in the Australian economy. If there was a self fulfilling element to Swan's inflation references, it was dwarfed by the impact of Malcolm Turnbull's decision to raise questions about the $20,000 guarantee cap at a time of global banking turmoil.

Turnbull revealed his real concerns late in the interview when he said "What about this Kerry, what about someone who's taken their money out of a cash management trust, paid an exit fee, put their money into a bank because they wanted to get the benefit of the Government guarantee.

And they're now going to have to pay a tax to Wayne Swan for doing... for taking advantage of a guarantee Wayne Swan and Kevin Rudd told them on the 12th of October was free?"

As any changes being mooted by the government to the guarantee concern only those holding deposits in excess of one million dollars, Turnbull's comments reflect his real interest. He wasn't able to voice any pleasure at the fact that the bank deposits of the rest of the population were safe. Nor was he able to point the finger at his former investment banking colleagues who created the mess - those same guys who levied the sacred "exit fees" Malcolm refers to. Now he's concerned about his other mates moving their millions to guaranteed bank deposits and expecting it all to be free and easy - and taxpayer funded. Aren't those the attitudes that got us here in the first place?

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