ANNOUNCED AS TEMPORARYNo
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.
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