Rudd Bank voted down

The commercial property fund colloquially known as Rudd Bank was voted down in the Senate last night.

Rudd Bank failed to gain the approval of the Greens and the Coalition after the Government refused a demand by the Greens to place a $1 million cap on executive salaries.

The president of the Australian Direct Property Investment Association, Linden Toll, said he was disappointed, although the outcome was not entirely unexpected.

“Certainly the dialogue looked shaky, or 50/50 really,” he said. “It is disappointing because the building and property development industry really is the backbone of the country and, considering the various measures in place to save other areas of the economy, certainly this sector needed some help.

“With that in mind, we are starting to see interest come back into our sector, in particular, the unlisted property market, and we are seeing demand for new product. So we are seeing a slight shift. But equally, this is a long-term thing and we are disappointed.”

The Government deplored the outcome, claiming it could jeopardise thousands of jobs.

Toll said there are projects on the go and unemployment rates seem to be comparable with what is happening in other sectors.

“But when things fall into a hole, things can spiral very quickly, and jobs do disappear very quickly,” he added. “We’re conscious that everything adds fuel, and our fuel is cash. And with the banks not being particularly forthcoming in terms of capital, it has to come from somewhere else. We’ve been particularly disappointed with the way the guarantee has been provided to banks and they have effectively closed their doors.”

Toll said Rudd Bank would have provided job continuity for an industry that employs a “tremendous amount of people”. However, Toll is sure the Rudd Government has a contingency plan up its sleeve.

“I think it’s a wait and see as to what Mr Swan has to say today,” he said.