❓ Treasurer provides an update on the asset sales program, specifically addressing the proposed partial divestment of Keystart's loan book to reduce gross debt while maintaining the program's function and borrower conditions.
AnsweredQoN 1042Legislative Assembly
QuestionView source ↗
ASSET SALES PROGRAM — KEYSTART —
LOAN BOOK
1042. Mr S.K. L'ESTRANGE to the
Treasurer:
Can the Treasurer please update the
house on the government's announcement as part of the asset sales
program that will investigate the divestment of part of Keystart's loan
book?
LOAN BOOK
1042. Mr S.K. L'ESTRANGE to the
Treasurer:
Can the Treasurer please update the
house on the government's announcement as part of the asset sales
program that will investigate the divestment of part of Keystart's loan
book?
AnswerView source ↗
Before I answer the question, I
acknowledge the students and staff from the Living Waters Lutheran College in
the member for Dawesville's electorate.
I thank the member for the question.
The asset sales program is going well. The bill for the sale process for the
Perth Market Authority is going through the upper house. I announced and moved
the second reading of the bill for the proposal to investigate the lease at
Utah Point, and other ones are going well. Today, the Minister for Housing and
I announced that we are moving towards the partial divestment of Keystart's
loan book. Keystart is a state government program that primarily allows and
assists people to get into the housing market—often those in the first
home buyers' market or the affordable homes program. Keystart assists
them primarily with the deposit. The loan book has grown very sharply over the
last few years. Members may remember that during the global financial crisis
the banks pulled out of the housing market. Keystart properly stepped into the
breach and expanded significantly. The loan book right now stands at just shy
of $5 billion—a large amount of money. The proposal is to continue the
program and to allow it to continue to expand as demand grows but to reduce our
level of gross debt, not net debt.
We have done some research on the
program and have found that the best way to reduce our level of gross debt is
to do what the market calls an equitable transfer. An equitable transfer will
transfer the mortgages and liabilities to a third party, probably a large bank,
but the front, the responsibility for interaction with the borrowers, will
remain with Keystart. There will be no change to the interest rates, the
deposit rates or the conditions of the loan; they will remain the same.
Keystart holders will see no change or difference in this. We aim to transfer
about 40 per cent of the total liabilities of Keystart, and that will allow us
to continue to expand the Keystart program without reducing our levels of gross
debt. It shows how, with innovation, governments can maintain very large
programs without building up high levels of debt.
acknowledge the students and staff from the Living Waters Lutheran College in
the member for Dawesville's electorate.
I thank the member for the question.
The asset sales program is going well. The bill for the sale process for the
Perth Market Authority is going through the upper house. I announced and moved
the second reading of the bill for the proposal to investigate the lease at
Utah Point, and other ones are going well. Today, the Minister for Housing and
I announced that we are moving towards the partial divestment of Keystart's
loan book. Keystart is a state government program that primarily allows and
assists people to get into the housing market—often those in the first
home buyers' market or the affordable homes program. Keystart assists
them primarily with the deposit. The loan book has grown very sharply over the
last few years. Members may remember that during the global financial crisis
the banks pulled out of the housing market. Keystart properly stepped into the
breach and expanded significantly. The loan book right now stands at just shy
of $5 billion—a large amount of money. The proposal is to continue the
program and to allow it to continue to expand as demand grows but to reduce our
level of gross debt, not net debt.
We have done some research on the
program and have found that the best way to reduce our level of gross debt is
to do what the market calls an equitable transfer. An equitable transfer will
transfer the mortgages and liabilities to a third party, probably a large bank,
but the front, the responsibility for interaction with the borrowers, will
remain with Keystart. There will be no change to the interest rates, the
deposit rates or the conditions of the loan; they will remain the same.
Keystart holders will see no change or difference in this. We aim to transfer
about 40 per cent of the total liabilities of Keystart, and that will allow us
to continue to expand the Keystart program without reducing our levels of gross
debt. It shows how, with innovation, governments can maintain very large
programs without building up high levels of debt.
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