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Thursday, 5 February 2009
Page: 458


Senator CONROY (Minister for Broadband, Communications and the Digital Economy) (3:06 PM) —Mr President, I have some further information from the Treasurer in answer to Senator Abetz’s questions without notice on 3 February on car dealers. I have already given him a copy. I seek leave to incorporate it.

Leave granted.

The document read as follows—

Question:

How many car dealers facing closure as a result of the government’s bungled unlimited deposit guarantee have received new financing arrangements under the government’s special purpose vehicle announced last year?

Response:

In light of the global financial crisis, the Government’s actions in establishing the SPV were necessary to ensure the car dealers had immediate access to floor plan financing.

The announcement of two major car dealer financiers, GE Money and GMAC, exiting the Australian market reveals the challenges being faced by the industry.

The remaining finance providers—such as St George, Esanda and Capital Finance—have been quite active over recent weeks in financing a large number of former GE and GMAC dealerships.

GE and GMAC have also adopted an orderly approach in the wind down of their Australian operations. This is positive news for the Australian car industry.

The Government is continuing to work with Credit Suisse, the banks and the car industry so that when GE and GMAC depart, those viable dealers that need finance will be able to get it.

An announcement will be made in coming weeks on the actual size of the SPV once GE and GMAC close their books.

Will the minister explain to the Senate the definition of a ‘viable’ business, as outlined in the special purpose vehicle guidelines?

The SPV will support viable dealerships that are able to meet the normal credit approval processes of the financiers of the SPV.

Credit Suisse is providing the necessary technical support to develop the SPV. Treasury is also working closely with the major banks, Credit Suisse and its advisers.

Is it a fact that despite the government’s rhetoric the special purpose vehicle will not prevent dealership closures and job losses in the car retailing sector? Why won’t the government simply come clean and admit that this situation could have been avoided if it had consulted with and listened to the Reserve Bank before rushing to introduce its foolish unlimited deposit guarantee?

The Government’s actions in establishing the SPV were necessary to ensure the car dealers had immediate access to floor plan financing, as a result of ongoing global financial challenges.

The announcement by two major car dealer financiers, GE Money and GMAC, to exit the Australian market reveals the challenges being faced by the industry.

This placed great pressure on a large number of car dealerships and the Australian automotive industry more generally.

The Government’s actions in establishing the SPV supports the long-term viability of the automotive industry and forms part of the Government’s commitment to protect jobs in this vital industry and right across the Australian economy.