❓ Mr Wyatt questions the Treasurer about the securitisation of the Keystart loan book, including the status of bids and the timeline for completion. The Treasurer provides an update on the process, indicating a preferred candidate is being negotiated with and that legislation is not required.
AnsweredQoN 686Legislative Assembly
QuestionView source ↗
ASSET SALES — KEYSTART — LOAN BOOK
686. Mr B.S. WYATT to the Treasurer:
I refer to the Treasurer's
2015–16 budget speech in which he announced the securitisation of part
of the Keystart loan book and to his comments in June 2015 that banks have
expressed a great deal of interest.
(1) Has the
government received final bids for the Keystart loan book; and, if so, how many
bids have been received?
(2) When will the securitisation
process conclude?
(3) Will the government require
legislation to pass the Parliament to effect the securitisation process?
686. Mr B.S. WYATT to the Treasurer:
I refer to the Treasurer's
2015–16 budget speech in which he announced the securitisation of part
of the Keystart loan book and to his comments in June 2015 that banks have
expressed a great deal of interest.
(1) Has the
government received final bids for the Keystart loan book; and, if so, how many
bids have been received?
(2) When will the securitisation
process conclude?
(3) Will the government require
legislation to pass the Parliament to effect the securitisation process?
AnswerView source ↗
Thanks for the question.
(1)–(3) Keystart
is a major institution of the state government, which essentially pays for the
deposit of lower income people to get houses. The standard deposit rate for a bank
is between 20 and 30 per cent—I believe it has gone up—and
Keystart requires about two per cent. It is also integral to the Housing Authority's
various activities to promote homeownership. It has grown rapidly. We pegged it
at $5 billion. It grew up towards that and, in fact, demand was going to make
it exceed that. It really had a boost right after the global financial crisis
in 2009–10 when the banks pulled out of the low end of the housing
market. It grew up very significantly. We announced a policy, as the member
indicated, to not so much securitise, but in equity placement.
Mr
B.S. Wyatt : Quota–yield securitisation.
Dr
M.D. NAHAN : We have gone out to the market for it. I cannot remember how
many institutions bid the first time. We shortlisted that to three. Keystart's
board, with Treasury participation, is looking at that. They have whittled it
down to one preferred candidate. They are still negotiating some aspects of it.
I expect that to be brought to cabinet soon. It will not require parliamentary
legislation; it is a decision up to the business of Keystart, which by the way
is a fully own subsidiary of the Department of Housing. It will be, I believe,
in the vicinity of $1.4 billion. It will only reduce gross debt, not net debt.
Mr
B.S. Wyatt : Would you like me to ask a supplementary?
The
SPEAKER : You have broken the mould, member for Victoria Park!
(1)–(3) Keystart
is a major institution of the state government, which essentially pays for the
deposit of lower income people to get houses. The standard deposit rate for a bank
is between 20 and 30 per cent—I believe it has gone up—and
Keystart requires about two per cent. It is also integral to the Housing Authority's
various activities to promote homeownership. It has grown rapidly. We pegged it
at $5 billion. It grew up towards that and, in fact, demand was going to make
it exceed that. It really had a boost right after the global financial crisis
in 2009–10 when the banks pulled out of the low end of the housing
market. It grew up very significantly. We announced a policy, as the member
indicated, to not so much securitise, but in equity placement.
Mr
B.S. Wyatt : Quota–yield securitisation.
Dr
M.D. NAHAN : We have gone out to the market for it. I cannot remember how
many institutions bid the first time. We shortlisted that to three. Keystart's
board, with Treasury participation, is looking at that. They have whittled it
down to one preferred candidate. They are still negotiating some aspects of it.
I expect that to be brought to cabinet soon. It will not require parliamentary
legislation; it is a decision up to the business of Keystart, which by the way
is a fully own subsidiary of the Department of Housing. It will be, I believe,
in the vicinity of $1.4 billion. It will only reduce gross debt, not net debt.
Mr
B.S. Wyatt : Would you like me to ask a supplementary?
The
SPEAKER : You have broken the mould, member for Victoria Park!
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