Australia: Special Purpose Vehicle to support certain car dealerships.
Description
As reported by the OECD: "In December 2008, Australia announced the establishment of a Special Purpose Vehicle (SPV) with the support of leading Australian banks to provide liquidity to car dealer financiers who have encountered financing difficulties as a result of the global financial crisis. These include four major banks—ANZ, Commonwealth Bank of Australia, National Australia Bank, and Westpac—as well as other organisations, including Alphera Financial Services (a division of BMW Group), Capital Finance, Esanda, Nissan Finance, and St George. The Government will provide support to the SPV in the form of a guarantee that it expects to cover only a minor proportion of the securities issued. The SPV will provide critical wholesale floor-plan financing to commercially viable car dealerships that used to be financed by GE Money Motor Solutions or GMAC, both of whom had announced an intention to exit the Australian dealer floor-plan financing market."
The SPV fund was initially expected to involve A$2bn (subsequent estimates were revised down by approximately three-quarters). While the funds were to be provided by four Australian banks, advised in some cases by foreign banks, the Government of Australia backed the fund with its sovereign AAA credit rating. Legislation was enacted in June 2009 to codify the scheme.
The extension of the sovereign credit rating to this privately-financed scheme constitutes state aid. Moreover, the state aid is selective in application and almost certainly likely to affect the conditions of competition in the market for automobiles in Australia. As that market can be supplied through imports or through production by subsidaries of foreign multinationals located in Australia then certain foreign commercial interests are likely to be affected adversely by this measure.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | Don't know |
| Is there any evidence that alternatives to the proposed measure were considered? | Don't Know |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | Don't Know |
| Was such evidence identified? | Don't Know |
| Is such evidence publicly available? | Don't Know |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | Don't Know |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | Don't Know |
| Did the government state its intention to review the measure within one year of implementation? | Don't Know |
Date Discovered: 08/09/2009
Implemented: Yes
Date of inception: 5 Dec 2008
GTA Evaluation: Red
Source:
OECD. "STATUS REPORT: INVENTORY OF INVESTMENT MEASURES TAKEN BETWEEN 15 NOVEMBER 2008 AND 15 JUNE 2009."
Government Response:
- 366 reads
