Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

At the request of Senator Milne, I move:

That the Senate is of the opinion that, rather than punishing the unemployed, sick, elderly, students and families, revenue should be raised through applying a ‘public insurance’ levy on the big four banks that are too big to fail.

We have had some great first speeches in this chamber in the last three or four weeks, and I have noticed that the term 'free market' has been used on occasion by different speakers. Today we are dealing with a proposition that we levy banks for a leg-up that we gave them during the global financial crisis. The global financial crisis was probably one of the most significant financial crises in the history of markets. It is a classic example of why markets are not actually free. Certainly in conceptual and theoretical terms there is no such thing as a free market.

It is an assumption that we often make in economics and in finance in order to build models, but the reality, as we saw with the global financial crisis, is that markets fail. Markets can have significant volatility, and that can pose systemic risks to our financial system, our economy and our way of life.

If markets perfectly priced risk and perfectly priced goods and production then, in theory, we would have a free market. I am not going to lecture you much longer on the theory of free markets, but markets fail—unless you would like me to, Senator Polley! I would be very happy to put my university lecturer's cap on.