0 ' 1~
PRIME MINISTER
STATEMENT BY THE PRIME MINISTER, THE HON PJ. KEATING, MP
SOUTH AUSTRALIA'S DEBT AND PAYMENTS PROBLEM
Recognising that the Comnmonwealth's responsibility for the health and well being of the
national economy necessarily involves a concern for the economic and financial position of
the individual States, the Commonwealth has for some time been concerned that the debt
burden imposed on South Australia as a consequence of the actions of the State Bank of South
Australia has placed an extraordinary and unfair burden on the people of South Australia and
constrained the State in its ability to participate'in the economic recovery now underway.
The Prime Minister and the Premier have recognised that the debt burden imposed by the
SBSA goes beyond the capacity of South Australia to resolve without placing an undue
burden on the citizens of the State.
The Commonwealth Labor Government is prepared to providespecil financial assistance to
South Australia in order to help the State in reducing its current debt burden. This action is
consistent with decisions the Government has taken in recent years to assist Tasmania,
Northern Territory and Victoria.
The Keating Government is prepared to provide special assistance to South Australia of a net
present value of $ 600 million. This assistance will take the form of a combination of cash
grants and debt waivers over this year and the next two years and is conditional on the Bank
being sold.
In recognition of the Commonwealth's decision, the Premier will recommend:
I1. thi~ e 1of. tbe SBSAas quickly as practicable consistent with achieving a fair market
price.
2. that the SBSA be brought into the Commonwealth's tax net free of tax losses from 1
July 1994 or upon sale, whichever comes first and the State will make no further
claims
3. that all existing tax losses will be extinguished
4. that the SBSA be brought under the prudential supervision of the RBA no later than 1
64 16 January 1994 by legislation.
South Australia has indicated that it will be introducing a debt management plan designed to
return the State's debt burden to sustainable levels. South Australia will be consulting with thc
Commonwealth on the details of the plan.
This package of measures to be implemented by the Keating and Arnold Governments will
lead to a reduction in South Australia's debt by well in excess of $ 1 billion. This deals in a
dramatic way with South Australia's ongoing debt problems. The Commonwealth is confident
that this will provide South Australia with the capacity to fully and properly participate in the
economic recovery of Australia.
The Commonwealth has agreed to give effect to this agreement upon its re-election.
ADELAIDE Wednesday, 17 February 6417