New premier backed by SA independents

New premier backed by SA independents

By Liam Mitchell

ADELAIDE — Under the leadership of new Premier Lynn Arnold, the South Australian Labour government has attempted to distance itself from the John Bannon administration and avoid the flak coming from the bail-out of the government-owned State Bank.

The government has given $2.3 billion to the State Bank since February 1991 to meet the cost of bad loans. Much of this has been through secret subsidies, but it also includes $850 million from the last budget.

Arnold has denied any knowledge of the government's secret subsidies, even though he was a leading Cabinet member. However, he has refused to either confirm or deny that Cabinet actually discussed the issue.

Bannon resigned on September 1 in response to community disillusionment in the government following revelations at the State Bank royal commission that he had twice asked the bank to hold down interest rates in periods prior to state and federal elections and had paid the bank secret subsidies to do so from government coffers.

Bannon also came under fire for his handling of the bank as premier and treasurer. The bank's Board of Directors was given a free hand to run the bank as a profiteering institution, making inordinate loans to private industry in Australia and overseas and loaning large amounts for stock market or real estate speculation.

Bannon's replacement by Arnold has pushed back the prospect of an early election. The three independents who hold the balance of power have stated they will support the new government and possibly even enter it.

From GLW issue 71