No doubt to the delight of non-banks and smaller banks and their lobbyists, the Australian government will stump up another $8 billion in "support" for - which may not mean actual investment in - the market for residential, mortgage-backed securities. Wayne Swan, Australia's Treasurer, announced the decision yesterday.In a media release Swan said Treasury and the Australian Office of Financial Management will look into the merits and feasibility of delivering "part of the support through a fee-based liquidity facility rather than direct investments by the AOFM".Swan mentioned two rationales for this approach (not that his media release used any of the following language): to provide a more credible secondary market for RMBS securities (and thus to encourage investment by others) and also to buy the securities at the usual clean up trigger when the mortgage pool declines to 10 per cent of the original.Over the course of the last two years some RMBS investors (and investors in the subordinated debt of banks for that matter) have found it disconcerting that entities to which they lent money (such as RHG and Deutsche Bank, to name two) might exercise contractual rights and plan to repay investments at a later date than budgeted for by the investor.The timing of the additional Australian government support is not clear, given the need to consult with the sector. However, further AOFM investment, whether direct or contingent, seems likely by the end of the year.The AOFM has invested $8 billion in RMBS since late 2008, with most support directed to non-bank funders with an extended record in the markets, and with some funding also directed to credit unions and building societies.Some evidence of institutional investor demand for RMBS has emerged over recent times, mainly for two recent transactions by ME Bank.