States push Feds for help selling bonds
Australia's state governments are pushing for the federal government to help the states borrow at terms equivalent to the Commonwealth's credit rating.The idea got an airing in federal parliament yesterday through an opposition question to the government, and which styled the plan as an "infrastructure bank".The Prime Minister, Kevin Rudd, answered in a stock and vague way that the government was examining all possible options. The Sydney Morning Herald reported the idea is actively supported by the New South Wales government and won backing from the treasurers of the seven Labor state and territory governments, hosted on November 14 by the NSW treasurer, Eric Roozendaal. The Western Australian treasurer, from a newly elected Liberal government, was not party to those talks.The SMH reported Roozendaal as pushing for Commonwealth help to the states to access funds. The argument appears to be that the state treasury corporations are being crowded out of the wholesale debt market by the government guarantee on bank deposits.Whether an "infrastructure bank" as suggested by the opposition leader, Malcolm Turnbull, is a serious policy option is unclear: it may perhaps be an exaggeration of the NSW position.