STATE DEBT

226 Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (23 October 2007). In relation to 2007-08 Budget Paper 3:

(a) which agencies and departments are administering the $3.36 billion state debt;

(b) is this debt placed directly in the market by each agency or via SAFA;

(c) from whom is the money borrowed from; and

(d) what are the terms of the borrowings, including the value, interest rates and terms of maturity?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations): On the assumption that:

the $3.36 billion State Debt the member is referring to is the estimate for the non-financial public sector net debt at 30 June 2011 (table 5.8);

the term 'administers' means responsibility for meeting interest costs on the net debt;

I am advised that the net debt of the non-financial public sector is administered by a number of agencies. As net debt is represented by gross debt less financial assets, it is not feasible to produce a list by agency. However the majority of the net debt is administered by the Treasurer and SA Water.

The debt is placed directly in the market by SAFA, which in turn lends the money either directly to agencies or via the Treasurer to the relevant agency.

While SAFA has a retail bond program this comprises only a very small component of SAFA’s overall funding program. The greater majority of the funds are borrowed from wholesale investors both in Australia and offshore.

Such borrowings are undertaken through SAFA’s domestic Select Line (fixed interest) and commercial paper programs and if required, through SAFA’s global debt instrument program. Due to its modest borrowing requirements and very good funding levels achieved through its domestic funding program, SAFA has not needed to utilise its offshore funding program for a number of years.

The amount, weighted average interest rates and maturities of the funds raised by SAFA as at 30 June 2007 are detailed in Notes to the Financial Statements for the year ended 30 June 2007 in SAFA’s 2006-07 Annual Report, in particular Note 22.2 Interest Rate Risk and Note 22.3 Maturity Analysis of Financial Instruments.'