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“I will ask the Treasury Secretary to answer that” – Treasurer Eric Roozendaal in response to question about Federal Government’s rescue package for banks, Budget Estimates 14-10-08
The Federal Government’s decision to guarantee all debt issuance of Australia's banks may have an unintended impact on State Government finances according to NSW Treasury, however NSW Treasurer Eric Roozendaal is unable to clarify, Shadow Finance Minister Mike Baird said today.
"At a time when governments across the world are determining appropriate steps to combat the financial crisis, the NSW Treasurer is delegating all the heavy lifting,” Mr Baird said.
“In the Budget Estimates hearings, Mr Roozendaal was unable to answer the Opposition’s question on the likely impact of the Federal Government’s bank guarantees announced on the weekend.
“Mr Roozendaal deferred to the Secretary of NSW Treasury, Mr John Pierce, who confirmed discussions were taking place on the issue.
"While we welcome Kevin Rudd's attempt to shore up Australia's financial institutions, NSW needs to be aware of the impact of these actions on our State Government finances.
"The market has questioned whether the cost of borrowing may now go up in NSW,” Mr Baird said.
“It is also likely access to funding for infrastructure may be more difficult for the NSW Government now, given the improved credit profile of Aussie banks.
"The NSW Treasurer should be asking questions about the fee arrangements that Kevin Rudd and Wayne Swan are putting in place and whether these actions are inadvertently impacting the States.
“If they are, there may be a need for the Federal Government to guarantee State debt to ensure NSW is not punished financially and funds are available,” Mr Baird said. “Unfortunately the NSW Treasurer has demonstrated he has no grasp of this significant development on State finances.”
MEDIA: Lisa Harrington - 0406 726 880
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