Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for his question. The government is aware that some local government councils around Australia are exposed because they have had investments in organisations such as Lehman Brothers. Some may have had investments in other subprime type products.

Most of the high-exposure councils appear to be in New South Wales and Western Australia. All other states have relatively little exposure to these types of investments. Of course, as we all know, local government is established by state and territory legislation, and it is the responsibility of the states and territories to exercise proper financial oversight of council investments. I note that the New South Wales and Western Australian governments have commenced reviews of the local government investments in 2008 and have certainly significantly tightened up on the oversight of local government.

I am also aware that some councils in New South Wales are contemplating legal action to recover some of the investments. So that is the extent of our knowledge of the exposure of local government to these investments, but as we have been saying in this House for a long time and has become readily apparent in recent times—

See this speech in context