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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-11-25 Daily Xml
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MITSUBISHI MOTORS

In reply to Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (10 September 2008).

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations): I have been provided the following information:

The return of the Mitsubishi funds was recorded through the government’s operating statement for 2007-08 resulting in a benefit to the 2007-08 operating surplus of $35 million.

Page 3.50 of 2008-09 budget paper No. 4 volume 1 discloses the following:

'Major variations between the 2007-08 Estimated Result and the 2008-09 Budget for operating payments include:

The repayment by Mitsubishi of $35.0 million to the Industry Financial Assistance Deposit Account in 2007-08. The accounting treatment of this receipt creates a negative expense on the 2007-08 estimated result of the Industry Financial Assistance grants and subsidies line. The Intra-government transfer line has a corresponding $35.0 million payment in the 2007-08 estimated result to reflect the return of funds to the consolidated account.'

In accordance with the Public Finance and Audit Act, the receipt of these funds into the consolidated account was recorded as revenue to government.

Appendix C, page C.9 of 2008-09 budget paper No. 3 shows the cash receipt into the consolidated account as 'Mitsubishi Limited Grant Payment'.

Having taken the revenue to the bottom line, $35 million was transferred to Land Management Corporation (LMC) as an equity injection.

Page 6.4 of 2008-09 Budget Paper No 3 discloses the following:

'Following the $35 million loan repayment by Mitsubishi Corporation to the government, Land Management Corporation received an equity injection of $35 million in 2007-08, so as to allow it to participate in any resultant joint development opportunities with the private sector.'

The equity injection is recorded as an investment asset on the general government balance sheet, and does not result in an expense in 2007-08 to the general government sector. Accordingly, the benefit to the net operating surplus created by the Mitsubishi grant repayment is not offset.

In the event that the $35 million is not required by LMC for joint development opportunities in the southern suburbs it will be returned to consolidated account as a return of equity. This will have no impact on the net operating surplus.

Page 2.4 of 2008-09 budget paper No. 3 notes that '…following the $35.0 million loan repayment by Mitsubishi Corporation to the government, Land Management Corporation received an equity injection of $35.0 million in 2007-08, to facilitate a potential joint development with the private sector. If not required, the equity injection will be repayable to the government.'

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