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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2020-04-08 Daily Xml
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Coronavirus

The Hon. D.G.E. HOOD (14:46): My question is to the Treasurer. Given the financial challenges raised by the COVID-19 situation, has South Australia experienced any liquidity issues, and has SAFA faced any problems in raising funds to manage the state's debt?

The Hon. R.I. LUCAS (Treasurer) (14:46): It is an important question raised by the Hon. Mr Hood, an issue that has been addressed by the Board of Treasurers, which is a body that represents all state and territory treasurers, over recent weeks. We have met by teleconference on a number of occasions. It is fair to say that a small number of jurisdictions are facing some tightness in terms of liquidity. We are all having to fund very significant increases in public sector expenditure, we are all therefore having to incur significant increases in state debt and we are all therefore having to enter the market to raise funds to ensure the necessary funds are available to finance the public expenditure required of us during the COVID-19 pandemic.

I am pleased to say—and I pay credit to the Under Treasurer, Mr Reynolds, and the other hardworking officers in the South Australian Finance Authority (SAFA)—that they have conservatively managed the government's liquidity position for a number of years. I certainly seek no credit for that; it has been a position they have adopted for a number of years under the former government and continued under this government.

There is, I am advised, significant funding available to keep us in a liquid position, that is, being able to finance the level of our state debt for a significant length of time. I will not put on the public record the exact length of time, but for a significant length of time, certainly beyond what we hope is the expected duration of the COVID-19 pandemic.

It is fair to say that not every other jurisdiction is in such a fortunate position, and they are therefore having to tackle their particular challenges in a slightly different way. I am pleased to be able to say that in the last week SAFA was able to raise $1.5 billion, target fundraising, from six benchmark bond taps. Without going into the technical detail of that, the important information is that SAFA was deemed to be creditworthy enough and liquid enough to raise a considerable level of funding to assist the financing of the public expenditure.

The parliament has only recently addressed the Supply Bill, which has allowed sufficient expenditure for the payment of all of our public sector services for a period of up to 12 months. A bill that we are currently considering (and I therefore will not address the detail of that) also will assist in terms of significant additional expenditure authority for me as the Treasurer of the state to finance all of the necessary commitments that we are making on behalf of the state during this period.

It is an important issue, the state's liquidity, and I conclude my response by paying tribute to Under Treasurer Mr Reynolds, as well as the hardworking people in SAFA. Mr Kevin Cantley, who has now retired from SAFA but who was the driving force of SAFA, and Mr Andrew Kennedy and various other senior officers within SAFA have managed a good book on behalf of the state of South Australia under both the former Labor government and continuing under the new government over the last two years.

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