Ms MARTIN - 1999-02-24
Yesterday I asked the Treasurer to justify why the Country Liberal Party wrote off $950 000 of taxpayers’ money in the form of a bad loan to Northbrick. Treasurer, where has that $950 000 gone?
ANSWER
Mr Speaker, the Leader of the Opposition has just asked that I justify the position. What in fact she part-asked yesterday was: ‘I ask the Treasurer why did the Country Liberal Party administration misstate the amount it had loaned to Northbrick?’. That is a statement of fact – it is not a question. Why didn’t the Leader of the Opposition ask if the government had done it? Why did she use the word ‘misstate’? Why does she always try to portray things in the worst possible light, with the worst possible circumstance ...
Members interjecting.
Mr SPEAKER: Order!
Mr REED: Why does she always make assumptions that something wrong has been done, that there has been a misuse? There has been no misuse. I gave a commitment yesterday and I said I would give her a response in writing because she cannot be trusted to represent the facts if they are not given to her in writing. So, I give her a copy now of the letter signed by me with a detailed response and I seek leave to have that letter incorporated in Hansard.
Leave granted.
Ms Clare Martin MLA
Leader of the Opposition
GPO Box 3721
DARWIN NT 0801
Dear Ms Martin
I refer to the question you raised yesterday morning regarding the write-off of a loan to Northbrick Industries Pty Ltd of “$950 000”. The amount of $641 268 was the balance of the loan outstanding in 1993. Through the accumulation of interest, which government continued to apply, the outstanding balance had risen by $309 075 to $950343 in March 1998 when the loan was written off.
Whilst the above information in effect answers your question, the following detail pertaining to the loan is also provided.
A loan of $600,000 was made to Northbrick Industries in 1982;
The company was sold in 1986. Guarantees were provided by the new owners and its principal;
Receivers were appointed to Northbrick in 1988 and the brick works were sold. The Territory received a dividend in the order of $85,000 at that time but its recourse for the remainder of the debt was preserved;
In 1994 advice was received through the receiver that there were no funds available for any class of unsecured creditors including the Territory;
At this time consideration was given to writing the loan off, however it was decided that legal action would be undertaken to recover any monies;
As a result the Territory commenced bankruptcy proceedings against the principal of the company in respect of the guarantee provided by him; this enabled the principal’s assets to be assessed;
The bankruptcy proceedings have concluded, showing nil assets and considerable liabilities.
On the basis of legal advice provided in February 1998 by the Solicitor for the Northern Territory that all recovery means had been pursued and recovery was not possible, a recommendation was proposed to me as Treasurer, that the debt including accumulative interest be written off;
Accordingly I approved the write-off of $950,343 on 6 March 1998.
Your suggestion that the amount of the loan was understated by government in 1993, is incorrect.
The difference between the loan amount and the amount written off was the accumulated interest which government continued to apply.
The interest amount was money foregone, not money loaned, but none the less required write-off, just as it would have been payable had the vigorous pursuit by government to recover these amounts been successful.
As a matter of interest the Auditor-General reported a write-off of $950,000 rather than the correct amount.
Yours sincerely
MIKE REED 24/2/99
Mr REED: I quote from the letter:
I refer to the question you raised yesterday morning regarding the write-off of a loan to Northbrick Industries Pty Ltd of “$950 000”. The amount of $641 268 was the balance of the loan outstanding in 1993. Through the accumulation of interest, which government continued to apply, the outstanding balance had risen by $309 075 to $950343 in March 1998 when the loan was written off. Whilst the above information, in effect, answers your question, the following detail pertaining to the loan is also provided.
I thereunder provide 9 points of information which include that a loan of $600 000 was made to Northbrick Industries in 1982 - 5 years, in fact, before I entered this parliament.
The letter continues:
The company was sold in 1986. Guarantees were provided by the new owners and its principal;
Receivers were appointed to Northbrick in 1988 and the brickworks were sold. The Territory received a dividend in the order of $85 000 at that time but its recourse for the remainder of the debt was preserved;
In 1994 advice was received through the receiver that there were no funds available for any class of unsecured creditors including the Territory;
At this time consideration was given to writing the loan off, however it was decided that legal action would be undertaken to recover any monies [that is to say, the Territory took every opportunity to pursue the recovery of the monies];
As a result the Territory commenced bankruptcy proceedings against the principal of the company in respect of the guarantee provided by him; this enabled the principal’s assets to be assessed;
The bankruptcy proceedings have concluded, showing nil assets and considerable liabilities.
On the basis of legal advice provided in February 1998 by the Solicitor for the Northern Territory that all recovery means had been pursued and recovery was not possible, a recommendation was proposed to me, as Treasurer, that the debt including accumulative interest be written off;
Accordingly I approved the write-off of $950 343 on 6 March 1998.
Nowhere in there can the Leader of the Opposition assert that the Country Liberal Party administration ‘misstated’ the amount it had loaned to the Northbrick Company.
Ms Martin: Why couldn’t you answer the question yesterday? Or this morning?
Mr REED: The honourable the Leader of the Opposition has a problem with her mouth, Mr Speaker.
Members interjecting.
Mr SPEAKER: Order!
Mr REED: She has a dreadful problem with her mouth and her capacity to represent the facts correctly. She’s on the record in a number of ways as misrepresenting what is said in this House. That is why, when this question was asked of me in the House yesterday, I felt it appropriate to put the answer in writing and to answer it in the House. The question was asked in this parliament, and it has been answered in this parliament. Much more information than that requested by the Leader of the Opposition has been provided and that is in accordance with the fact that we are an open and honest government. Detailed information has been provided, far in excess of that which has been requested by the Leader of the Opposition, and ...
Mr Toyne interjecting.
Ms Martin interjecting.
Mr SPEAKER: Order!
Ms Martin interjecting.
Mr SPEAKER: Order!
Mr REED: I am pleased to have all of that detail placed on the public record and incorporated in Hansard.
ANSWER
Mr Speaker, the Leader of the Opposition has just asked that I justify the position. What in fact she part-asked yesterday was: ‘I ask the Treasurer why did the Country Liberal Party administration misstate the amount it had loaned to Northbrick?’. That is a statement of fact – it is not a question. Why didn’t the Leader of the Opposition ask if the government had done it? Why did she use the word ‘misstate’? Why does she always try to portray things in the worst possible light, with the worst possible circumstance ...
Members interjecting.
Mr SPEAKER: Order!
Mr REED: Why does she always make assumptions that something wrong has been done, that there has been a misuse? There has been no misuse. I gave a commitment yesterday and I said I would give her a response in writing because she cannot be trusted to represent the facts if they are not given to her in writing. So, I give her a copy now of the letter signed by me with a detailed response and I seek leave to have that letter incorporated in Hansard.
Leave granted.
Ms Clare Martin MLA
Leader of the Opposition
GPO Box 3721
DARWIN NT 0801
Dear Ms Martin
I refer to the question you raised yesterday morning regarding the write-off of a loan to Northbrick Industries Pty Ltd of “$950 000”. The amount of $641 268 was the balance of the loan outstanding in 1993. Through the accumulation of interest, which government continued to apply, the outstanding balance had risen by $309 075 to $950343 in March 1998 when the loan was written off.
Whilst the above information in effect answers your question, the following detail pertaining to the loan is also provided.
A loan of $600,000 was made to Northbrick Industries in 1982;
The company was sold in 1986. Guarantees were provided by the new owners and its principal;
Receivers were appointed to Northbrick in 1988 and the brick works were sold. The Territory received a dividend in the order of $85,000 at that time but its recourse for the remainder of the debt was preserved;
In 1994 advice was received through the receiver that there were no funds available for any class of unsecured creditors including the Territory;
At this time consideration was given to writing the loan off, however it was decided that legal action would be undertaken to recover any monies;
As a result the Territory commenced bankruptcy proceedings against the principal of the company in respect of the guarantee provided by him; this enabled the principal’s assets to be assessed;
The bankruptcy proceedings have concluded, showing nil assets and considerable liabilities.
On the basis of legal advice provided in February 1998 by the Solicitor for the Northern Territory that all recovery means had been pursued and recovery was not possible, a recommendation was proposed to me as Treasurer, that the debt including accumulative interest be written off;
Accordingly I approved the write-off of $950,343 on 6 March 1998.
Your suggestion that the amount of the loan was understated by government in 1993, is incorrect.
The difference between the loan amount and the amount written off was the accumulated interest which government continued to apply.
The interest amount was money foregone, not money loaned, but none the less required write-off, just as it would have been payable had the vigorous pursuit by government to recover these amounts been successful.
As a matter of interest the Auditor-General reported a write-off of $950,000 rather than the correct amount.
Yours sincerely
MIKE REED 24/2/99
Mr REED: I quote from the letter:
I refer to the question you raised yesterday morning regarding the write-off of a loan to Northbrick Industries Pty Ltd of “$950 000”. The amount of $641 268 was the balance of the loan outstanding in 1993. Through the accumulation of interest, which government continued to apply, the outstanding balance had risen by $309 075 to $950343 in March 1998 when the loan was written off. Whilst the above information, in effect, answers your question, the following detail pertaining to the loan is also provided.
I thereunder provide 9 points of information which include that a loan of $600 000 was made to Northbrick Industries in 1982 - 5 years, in fact, before I entered this parliament.
The letter continues:
The company was sold in 1986. Guarantees were provided by the new owners and its principal;
Receivers were appointed to Northbrick in 1988 and the brickworks were sold. The Territory received a dividend in the order of $85 000 at that time but its recourse for the remainder of the debt was preserved;
In 1994 advice was received through the receiver that there were no funds available for any class of unsecured creditors including the Territory;
At this time consideration was given to writing the loan off, however it was decided that legal action would be undertaken to recover any monies [that is to say, the Territory took every opportunity to pursue the recovery of the monies];
As a result the Territory commenced bankruptcy proceedings against the principal of the company in respect of the guarantee provided by him; this enabled the principal’s assets to be assessed;
The bankruptcy proceedings have concluded, showing nil assets and considerable liabilities.
On the basis of legal advice provided in February 1998 by the Solicitor for the Northern Territory that all recovery means had been pursued and recovery was not possible, a recommendation was proposed to me, as Treasurer, that the debt including accumulative interest be written off;
Accordingly I approved the write-off of $950 343 on 6 March 1998.
Nowhere in there can the Leader of the Opposition assert that the Country Liberal Party administration ‘misstated’ the amount it had loaned to the Northbrick Company.
Ms Martin: Why couldn’t you answer the question yesterday? Or this morning?
Mr REED: The honourable the Leader of the Opposition has a problem with her mouth, Mr Speaker.
Members interjecting.
Mr SPEAKER: Order!
Mr REED: She has a dreadful problem with her mouth and her capacity to represent the facts correctly. She’s on the record in a number of ways as misrepresenting what is said in this House. That is why, when this question was asked of me in the House yesterday, I felt it appropriate to put the answer in writing and to answer it in the House. The question was asked in this parliament, and it has been answered in this parliament. Much more information than that requested by the Leader of the Opposition has been provided and that is in accordance with the fact that we are an open and honest government. Detailed information has been provided, far in excess of that which has been requested by the Leader of the Opposition, and ...
Mr Toyne interjecting.
Ms Martin interjecting.
Mr SPEAKER: Order!
Ms Martin interjecting.
Mr SPEAKER: Order!
Mr REED: I am pleased to have all of that detail placed on the public record and incorporated in Hansard.
Last updated: 09 Aug 2016