Page 2000 - Week 06 - Wednesday, 6 May 2009
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That was what he said to the people of the ACT on 28 August 2008, six weeks out from the election. He said there was no reason to believe anything other than that “they will support land rent”.
Yet we go through the documents, and the documents give any reasonable person, any reasonable observer, a lot of reason to doubt, significant reason to doubt, that the financial institutions were going to support the land rent scheme. Let us look at them, going right back to 2004, in fact. We have a letter from Martin Hehir, and Hehir states:
I understand the Commonwealth Bank is concerned about the risk it would be assuming in providing finance for the depreciating asset. I also understand that you have received advice that a 50 per cent deposit would be required to offset this risk.
This was on 6 September 2004, well before the global financial crisis. That is another part of what Jon Stanhope’s story has been on this. On 19 June 2008, there was an email from Brian Acworth, head of government business, Westpac, to Elisabeth Judd. Acworth says:
It is my understanding that the proposed Land Rent Scheme provided us with some challenges.
Westpac raises concerns. So we have had the Commonwealth and Westpac raising concerns. On 15 July 2008, there was an email from Peter Morgan, Principal Executive Officer , St George Insurance, to Elisabeth Judd in CMD. Morgan states:
At our recent meeting with George Tomlin, CMD, I undertook to refer the Land Rent Scheme to my colleagues within the bank. This was done and it appears they also reviewed the scheme earlier this year in March. This review concluded that there was no appetite for participating in the scheme for the following reasons. In the event of a borrower default it would be difficult to distinguish house versus land value upon the sale to repay the housing loan. Similar to points raised within your papers, there is valid argument that the house value will depreciate over time and therefore may be less than the overall debt.
So we have had the Commonwealth Bank, Westpac and St George raising concerns. Then we have Libio Exash, sales officer, LDA, to the Bendigo Bank, also received by NAB. I quote:
I am receiving a lot of phone calls from the public indicating that after the course they were approaching financial institutions either by phone or by appointment and are being told constantly that either the financial institution will not lend them money to build a house on a land rent Crown Lease or they are not willing to do anything until they know more about the scheme.
On 12 August 2008 there was an email from Libby Oaks-Ash from the LDA to Elisabeth Judd. Oaks-Ash states:
I am constantly being told by customers that all the banks are saying no they will not lend for a construction loan under a land rent contract. It is imperative that we find someone who will—
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