Statement of Receipts and Payments of the Consolidated Fund and ...

Financial
Year
Ending
30 June
1991
1992
1993
1994
1995
1996
1997
Note:
(a)
(b)
(c)
(d)
(e)
(f)
Funds to
Depositors
$m(a)
-361.3
-195.0
-158.0
-183.8
-142.9
-195.5
-1 236.6
TABLE B.2
FARROW GROUP ARRANGEMENTS - FUNDING
Funding
Costs
$m(b)
-42.1
-47.5
-46.2
-46.0
-37.9
-31.7
-14.0
-265.3
Petrol Levy
removed on
1 Nov 92
$m
64.3
90.0
34.0
188.3
Call on
Budget with
Petrol Levy
Removed
$m(c)
76.7
114.6
119.0
310.3
Liquidator's
distributions
to CBA &
State
$m(d)
92.8
167.1
284.4
177.9
248.1
970.3
State
Borrowing
$m(e)
-195.0
-75.0
-95.5
365.5
Total
Debt
Obligations
by State
$m(f)
-875.3
-869.6
-792.0
-703.7
-501,9
-237.4
This table has been updated to reflect revised information from CBA, and actual payments since 30 June 1992.
Payments made to depositors in 1990-91 were provided by CBA and are reported as a contingent liabiUty of the State.
Payments to be made to depositors in subsequent years will be made by the State as bonds mature.
Includes both interest and other costs of borrowings to meet maturing bonds, and Ainding costs due to CBA.
The petrol levy is proposed to be abolished on 1 November 1992. It is estimated that a further $34 million will be collected
before the levy is abolished. Tliis amount will be transferred to the Special Purpose Trust Account in 1993-94 and will be
supplemented by a budget appropriation as required.
The first 25 cents of distributions from the liquidator will be paid directly to the CBA to reduce the $361.8 million facility.
The projected distributions to CBA and die State have increased since 1991-92. The original estimate assumed die State and
CBA would receive 80% of all distributions. On the basis of the proof of debt lodged with the Liquidator, the State and CBA
are now expected to receive 91 % of all distributions. The projected distribution to all depositors has been revised downwards
by the Liquidator since 1991-92.
The amounts the State will need to borrow to meet maturing bonds.
Total debt obligations of the State are estimated as at 30 June 1992. Total debt obligations comprise future obligations under
maturing bonds and the funds borrowed by the State from VicFin to meet matured bonds.
Table B.2 assumes a certain level and frequency of distributions from the Liquidator. To
the extent that the distribution schedule assumed in the table is not met there will be additional
calls on the Consolidated Fund. Factors which could reduce or delay the distributions are further
deterioration in the property market and adverse decisions relating to litigafion.
Current litigafion which could reduce the distributions to the State is the action being
brought by some of the non-withdrawable shareholders of the Farrow Group. The nonwithdrawable
shareholders are claiming that they were mislead by the societies when they
acquired their shares and that they should be permitted to prove in the liquidations of the societies
as unsecured creditors. The State's posidon that the non-withdrawable shareholders are not
entitled to prove in the liquidations was upheld by the Full Bench of the Supreme Court. The
High Court has recently granted the non-withdrawable shareholders leave to appeal to the High
Court against the decision of the Supreme Court.
Furthermore, a recent decision handed down in the Federal Court held that the Liquidator
was unable to enforce certain loan agreements and security documents against a borrower on the
ground that the Farrow Group had breached the provisions of the Building Societies Act 1986 in
making the loan. The Liquidator is in the process of lodging an appeal against the decision with
the Full Bench of the Federal Court.
184