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

The Bonds are secured by a second guarantee. The Bonds have a nominal value of $50
million. The principal amount outstanding under the Bonds and, therefore, the State's contingent
liability under the second guarantee, are determined in accordance with a formula set out in the
Trust Deed under which the Bonds are issued.
In addition to the guarantees, the Treasurer has provided an indemnity in favour of the
Club and the Trust.
The financing arrangements entered into by the Club would, without the benefit of the
indemnity, create accounting losses in the Club and/or Trust. The indemnity provided by the
Treasurer indemnifies each of them against incurring accounting losses. The accounting losses
reverse over time and this aspect of the indemnity does not increase the State's contingent
liability.
An evaluation of the revenue and expenses of the Club, and the progress to date indicate
that under all reasonable scenarios it is extremely unlikely that the Consolidated Fund would need
to meet any payments under the guarantees or the Indemnity Deed. The conventional loan facility
and the Bonds will be fully repaid by March 2017.
(g) St. Vincent's Hospital
The Treasurer has given an undertaking to St. Vincent's Hospital Melbourne Limited
(SVHML) to support its short-term bank borrowings of up to $12 million. This was to enable
commencement of interim works such as planning and design, land consolidation, construction of
a clinical school and other associated development. A call on this commitment would have been
payable in the event that long-term financing arrangements had not been put in place by 30
September 1992.
Documentation relevant to the long-term financing was signed by the parfies concerned on
11 August 1992. This included a twenty-five year Health Services Agreement between the
Minister for Health and SVHML for the provision of public hospital services.
The Agreement provides for an annual grant of $7 million, indexed by inflation. This is
the Government's contribution toward the cost of the new $141 million hospital. The Agreement
also includes a long term commitment to purchase public hospital services on the basis of
efficient costs. The quantity of those services is variable but the minimum value, on the basis of
efficient costs, is $50 million.
The issue of bonds by SVHML, under the agreements of 11 August 1992, is subject to
resolution of several matters including taxation issues. As a consequence, the Treasurer's
undertaking was extended to 31 December 1992.
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