A cash flow crisis has left the South Australian banking system in a perilous position.
The state is facing a shortfall of $7.5 billion, and is expected to run out of cash within the next week, according to a report by the South West Regional Council.
South Australia’s deputy prime minister, Tony Moore, says the state is struggling to make ends meet as the cost of its infrastructure and services has outstripped the cost to run it.
“The state has been in this kind of financial hole for almost a decade,” he said.
But he says the bank crisis has also had a big impact on people’s lives.
Moore says the number of Australians who have been unemployed in the past year has increased by 70 per cent.
He says the crisis has had a significant impact on South Australia’s economy.
It is estimated that the state’s budget deficit has more than doubled in the last year, from $4.7 billion to $10.6 billion.
A series of banking scandals have been in the news over the past decade.
In May this year, it emerged that a number of Australian banks were operating outside of the law and in breach of banking code.
They included Royal Bank of Scotland, Commonwealth Bank of Australia, and Westpac.
At the time, Moore said the government had already taken action to address the crisis.
This included the closure of four banks and the reinstatement of banking standards and standards compliance.
Then, in November last year it emerged the bank had breached the Banking Act.
More than $4 billion was lost to a loss-making foreign exchange scheme.
That is in addition to a number other losses and fines that have been imposed by the Australian Securities and Investments Commission (ASIC) and other regulators over the years.
As well as the loss of funds, the South Australia Government has also been left with the cost and expense of maintaining and repairing the state-owned bank.
There are also ongoing questions about the state Government’s ability to continue paying for its pension and welfare benefits.
Meanwhile, the State Government is currently looking at the best way to replace its ageing infrastructure with a new regional network.
Topics:banker-of-industry,economics-and-finance,business-economics,bankers,south-australiaFirst posted November 13, 2019 12:46:25More stories from South Australia