Global financial crisis

Government interim response to global financial crisis

Central to the Tasmanian Government interim response to the global financial crisis is a $100 million scheme to provide loans to small and medium-sized Tasmanian businesses. Outlined by the Premier on 14 October as a positive step by the State Government to support the local economy amid global financial uncertainty, the loans scheme is just one of many Tasmanian Government actions.

In a ministerial statement to Parliament, Mr Bartlett said the fundamentals of the Tasmanian economy were strong but he was determined to maintain confidence during a challenging period for the world economy.

“Governments are elected to lead and we are taking the steps to re-assure Tasmanians in a time of economic uncertainty,” Mr Bartlett said.

“We will put our shoulder to the wheel, in partnership with business and the wider community, to build on the strengths of Tasmania’s economy.

“By taking immediate action, we can support Tasmanians through a difficult short-term financial outlook.

“But there will be a need to do more and I will not hesitate to take further action as required.”

Mr Bartlett announced that small and medium-sized Tasmanian businesses would be able to apply for loans through the new Tasmanian Industry Support Scheme (TISS), which would provide up to $100 million of support.

TISS will be administered by the Department of Economic Development and Tourism and will enable local firms to access loans from the Tasmanian Government to support projects through the current volatility in credit markets.

“This is for local Tasmanian businesses – established in this State – who are employing Tasmanians,” Mr Bartlett said.

“We think Tasmanian businesses are strong and we’re prepared to stand behind them.

“Applicants will need to demonstrate that their investment proposals have been curtailed or restricted as a result of the lack of available credit in current market conditions.

“These are loans that will only be available to businesses that have sound governance structures and sound balance sheets.

“Priority will be given to those businesses who can demonstrate that a capital injection will result in higher productivity.

“This is not about propping up unsound businesses; this is about assisting those businesses who have found themselves the victims of a global credit crunch through no fault of their own.”

TISS will operate for 18 months in the first instance, at which time it will be reviewed in light of the global and national financial situation.

One of the criteria for assistance under the Tasmanian Industry Support Scheme will be that the businesses which access the fund do not retrench workers.

All loan proposals will be independently assessed by the Tasmanian Development Board in accordance with the statutory provisions of the Tasmanian Development Act 1983.

Mr Bartlett said the Government aimed to have TISS up and running and open to applications by the beginning of November.

The scheme will operate to not only support urban-based small and medium enterprises but also to support the backbone of our regional communities – our farmers.

“The last thing our farmers and farming businesses need, as irrigation developments are building new opportunities, is to be frozen off the land by credit markets that are refusing to lend at reasonable rates,” the Premier said.

“The Tasmanian Industry Support Scheme will be available to come to their aid if they fit the criteria.”

Mr Bartlett also announced in his ministerial statement that:
• A moratorium would be introduced on the creation of new general public service positions, except in areas relating to frontline service delivery such as the recruitment of new teachers, doctors, nurses, police, fire and ambulance personnel;

• He and the Treasurer would host a key industry roundtable discussion aimed at working with groups like the TCCI, Property Council, TFGA, Tourism Council, Unions Tasmania and other peak bodies to meet the current challenges and support productivity growth;

• The Secretaries of the Department of Treasury and of Premier and Cabinet would make a presentation to Cabinet to directly brief ministers on the potential impacts on the State budget of current events;

• In light of recent events, the State Government was reviewing its fiscal strategy and was prepared to move quickly if necessary to change its fiscal settings;

• The Treasurer had asked Treasury to prepare a Budget Update Report to be received before Christmas. This report will enable a better understanding of the impact on Budget and forward estimates and will be released publicly. It will provide essential information to inform further Government action;

• The Treasurer had already asked all agency heads to outline which priority projects in their areas could be brought forward to keep stimulating the local economy.

• The State Government would work closely with the Commonwealth to bring forward federal funding already committed to Tasmanian irrigation and rail projects;

• Tasmania would also pursue opportunities to partner the Commonwealth in telecommunications and water and sewerage infrastructure;

• The Treasurer would bring a plan to Cabinet on what could be done, within existing regulatory frameworks and agreements, to give further priority to Tasmanian businesses for government procurement;

• He had asked the Treasurer, in consultation with the RBF Board, to undertake the necessary reform process for the RBF to become a regulated fund managed by the Australian Prudential Regulatory Authority. This would provide scope for future growth of the fund and provide further confidence for members; and

• The Treasury would be monitoring the state of the Tasmanian housing market closely and looking at options that may assist in maintaining confidence.

“The State Government stands in a state of readiness. We will respond to this emerging situation based on the evidence of economic indicators,” Mr Bartlett said.

“The fundamentals of our economy are strong and we will continue to implement whatever measures are necessary to maintain confidence in our economy.”

Click here so see the full Ministerial Statement