❓ A WA parliamentary question addresses local government investments in sub-prime mortgages and the government's response, including guidelines and monitoring, but declines legal support or action against councils.
AnsweredQoN 580Legislative Council
QuestionView source ↗
local government — sub-prime mortgages investments
I refer to Western Australian councils that invested in sub-prime mortgage-backed collateralised debt obligations with Lehman Brothers. (1) What action has the government taken to ensure local governments invest ratepayer funds in a responsible and risk-averse way? (2) Will the government take any action against those local government authorities that have squandered millions of dollars of ratepayer funds? (3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER
I refer to Western Australian councils that invested in sub-prime mortgage-backed collateralised debt obligations with Lehman Brothers. (1) What action has the government taken to ensure local governments invest ratepayer funds in a responsible and risk-averse way? (2) Will the government take any action against those local government authorities that have squandered millions of dollars of ratepayer funds? (3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER
AnswerView source ↗
I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(1) What action has the government taken to ensure local governments invest ratepayer funds in a responsible and risk-averse way? (2) Will the government take any action against those local government authorities that have squandered millions of dollars of ratepayer funds? (3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(2) Will the government take any action against those local government authorities that have squandered millions of dollars of ratepayer funds? (3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(1) What action has the government taken to ensure local governments invest ratepayer funds in a responsible and risk-averse way? (2) Will the government take any action against those local government authorities that have squandered millions of dollars of ratepayer funds? (3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(2) Will the government take any action against those local government authorities that have squandered millions of dollars of ratepayer funds? (3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(3) Will the government be supporting any legal action by the local government authorities concerned; and, if so, how? (4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(4) What funding has been budgeted for in 2009-10 to ensure that the financial health of local government authorities is monitored and improved? Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
Hon PETER COLLIER replied: I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
I thank the member for some notice of this question. On behalf of the Minister for Local Government, I provide the following response — (1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(1) In August 2007 the department issued a circular, “Investment in Credit Derivative Instruments”, to all local governments in order to make them aware of the product and associated risks. This was followed in February 2008 with the preparation of a departmental investment policy guideline to assist local governments to gain a better understanding of the various matters concerning investment, including information on complex financial instruments, independent financial advice and matters to be considered when developing an investment policy. The guideline provides in-depth discussion about risk and return and how investments in complex financial products can elevate the level of risk. The guideline recommends that local governments do not invest in speculative investment products. Also, departmental officers have facilitated meetings with affected local governments to assist them to formulate recovery plans and obtain independent investment advice. (2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(2) No. (3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(3) There are no plans to offer this type of assistance to local governments at this time. (4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
(4) This is a major ongoing function of the department and funding for this purpose is included in the budget papers for 2009-10.
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