About SA's previous debt!!

[jimmy_2486]

The collapse of the State Bank in 1992 resulted in large levels of state debt (as much as A$4 billion). The collapse had meant that successive governments had enacted lean budgets, cutting spending, which had been a setback to the further development of the city and state. The debt has recently been reduced with the State Government once again receiving a AAA+ Credit Rating.

Found that from the Adelaide wiki.

I never knew about this and I guess this answers most questions on why we are a bit behind atm in terms of development, and why we are now starting to catch up to the other cities.

Anyone else to comment on this?

[bdm]

The state bank got out of control, investing where it shouldnt've been, when a depression came--bam! All of "our" money went bye-bye, and to ensure that South Australians hadn't lost their cash, the govt. borrowed mass amounts from overseas at high interest rates.

[Bulldozer]

How could you not know about that state bank collapse?

It's why the Liberals swept to power in the early 90's (Labor was absolutely slaughtered) and then privatised everything. The state debt was also substantially more than $4 billion.

Before ETSA was privatised the government was paying out over three million a day in debt. Bitch about power prices now, but SA would be dead now if the Liberals hadn't paid down the debt.

[Norman]

How much debt is left now?

[rev]

How could you not know about that state bank collapse?

It's why the Liberals swept to power in the early 90's (Labor was absolutely slaughtered) and then privatised everything. The state debt was also substantially more than $4 billion.

Before ETSA was privatised the government was paying out over three million a day in debt. Bitch about power prices now, but SA would be dead now if the Liberals hadn't paid down the debt.

They would have privatised even without the debt from the state bank.

[Cruise]

How much debt is left now?

What he asked.

[Pistol]

Tim Marcus Clark took most legal accountability for the collapse of State Bank, but was not personally accountable for any financial wrong doing. Currently he is living it up in Toorak, Melbourne. Personally I believe that he should have been placed in yatalla and the key thrown away.
Sometimes it is annoying to wonder where this state would have been if not for the collapse. Just think of the amount of money that this state would have had to fund infrastructure etc. It was a 4 billion debt but with the high interest rates that followed, that figure was more like 8 billion and considering that the annual budget of the state is approximately 12 billion (probably more like 6 billion back then) it is not hard to see that this hit HARD.
There is no actual debt from the State bank collapse left today (that was paid off some years ago) but due to our financial history, the government is somewhat cautious about borrowing as they want to keep our AAA+ credit rating intact.

[Cruise]

It is annoying to think where we would be now if not for that

[crawf]

At least the future is looking brighter in SA and confidence is at all time high

[bdm]

We still have a very high level of state debt, but we remain in a position where we are able to pay interest on it (hence the AAA rating). I'm not sure where to find the figures. but I'm estimating it is around $5-7 billion in today's dollars (which are very different in value from 1993 dollars).

[Will409]

If I am not mistaken, in 1992, the rest of Australia went through 'the recession we had to have'. Some truly unforunate timing on SA's part then.

[Bulldozer]

We still have a very high level of state debt, but we remain in a position where we are able to pay interest on it (hence the AAA rating). I'm not sure where to find the figures. but I'm estimating it is around $5-7 billion in today's dollars (which are very different in value from 1993 dollars).

I think when the Liberal's took over there was $9 billion in debt from the State Bank and Labor's mismanagement. I can't remember when I saw it (and I'm not paying Murdoch's extortionate rates for accessing News Ltd's archives), but If you trawl through the archives of The Advertiser during the late 1990's you'll find an article listing some of the horrendously irresponsible loans taken out by the Bannon goverment. There was stuff like loans of less than $100 with 20 year terms and horrific interest rates and early payback penalties that made it cheaper to stick to the payback terms.

So yeah, it does make you wonder what Adelaide and SA would be like today if it wasn't for all that. It fills me with both rage at what happened and despair for what could have been.

[rhino]

Unfortunately for John Bannon, he had someone who was supposed to know a lot better (Tim Marcus Clarke) running the State Bank and doing all the smoke-and-mirrors investing which eventually sent it broke. Bannon and the Labor Party were hammered and Marcus Clarke (who I bet never voted Labor either) wandered off to Melbourne with a new job.

This morning I heard Matthew Abraham talking to someone from Standard and Poors who explained that SA is in a very healthy state economically at the moment, and our projected spending, even with all the infrastructure projects currently on the go, is well within what we can afford, hence our AAA credit rating. Matt Abraham was trying to get her to say that the state was in financial difficulty, but he couldn't. She just re-itterated that our economy is helthy. And that's from Standard and Poors, not a Govt minister.
I do believe the Libs would have us with a AAA credit rating too, but they would have achieved it differently. There would be no new infrastructure, the Public Service would be shredded to the point where it could no longer offer a service, and more public entities would have been privatised. Also we would be paying a lot more for essential services.

[Ho Really]

...I do believe the Libs would have us with a AAA credit rating too, but they would have achieved it differently. There would be no new infrastructure, the Public Service would be shredded to the point where it could no longer offer a service, and more public entities would have been privatised. Also we would be paying a lot more for essential services.

Explain to us the foundation of this AAA credit rating.

Cheers

[rhino]

Well I'm not an economist, so if there is one out there, please correct me if I'm wrong, but the way I understand it is this:

In much the same way as applying for a loan for a house, we (South Australia) can borrow against our projected income, so our credit rating relates to our ability to pay off debt. If we can show that in the next financial year, and the one or two after that, we are going to have a certain ammount of income, (this includes money saved by such things as Public Service reductions and the Federal Govt taking over some things like the Murray Basin Commission) and the repayments on our loans for various projects can be covered by that income, then we have a positive credit rating. I guess the AAA rating means that lenders can be more sure of our ability to repay debt than an ordinary A rating.