- The Federal government will loan ILC $65million to pay off debt from Ayers Rock Resort purchase, saving the corporation $4m a year from lower treasury interest rate, says media report
- Under the deal ILC may also have to pitch in $30million dollars of its own money
- Vital programs may be impacted, says former ILC chairperson Dawn Casey
- Government failed to adopt alternate forms of refinancing the debt, proposed by board in 2015
There are reports that Canberra is set to bail out the Indigenous Land Corporation (ILC) with a $65million dollar loan in order to refinance debt left by the purchase of Ayers Rock resort.
The ILC - a federal government corporation set up to assist Indigenous people to acquire and manage land - purchased Ayers Rock Resort in 2010 for $300million from real estate investment group GPT.
That purchase, financed by a $65million loan from GPT, and a loan of around $120 million from ANZ,
left the corporation more than $100million in debt, after the resort’s value plummeted almost a third to $200million.
Debt's May deadline
With a May 2016 deadline looming on these debts, this $65million loan from the federal government is intended to avoid incurring further debt from GPT who set a 9 per cent interest rate.
By comparison the Treasury interest rate of 2.5 per cent will save the corporation at least $4million a year.
However, under the terms of the loan, the ILC is reportedly expected to pitch in $30million of its own money, drawn from ILC programs and contingency reserves, which concerns former ILC chairperson Dawn Casey.
“The $30million dollars means that potentially the ILC will not be able to acquire some land that they are required to do under their Act plus other programs such as ranger programs and land management programs,” says Ms Casey.
“Aboriginal people generally need to know whether or not the $65million dollar loan from treasury impacts on programs right across the country for Aboriginal and Torres Strait Islander people.”
Alternate plans to refinance debt not on Minister's agenda
Ms Casey is concerned that the loan is only tackling a very small portion of the debt, and says the previous ILC board proposed alternate plans last year to refinance the whole of the debt via a loan from the $3 billion Federal Land Fund.
Ms Casey says that plan would have avoided this $30million dollar cut to ILC programs, but it was not adopted by Minister Scullion.
“The loan from the land account would’ve meant that the ILC wouldn’t have to find a further $30million dollars from its potential land acquisition program,” she says.
“But it’s just not the $30million- the acquisition of Ayers Rock continues to take tens of millions of dollars away from programs, like over the last couple of years there’s been well over a hundred-million dollars repaid in debt,” she says.
Calls for transparency
Ms Casey is also concerned about what other conditions have been set by Minister Scullion under this loan, such as cutting back ILC staff or further pressure to amalgamate the Indigenous Land Council and Indigenous Business Australia.
“I’m very concerned- treasury loans tend to come with conditions," she says.
The ILC and Minister Scullion would not comment on the timing or details of this loan, but a spokesperson for Minister Scullion told NITV that the government is working with the ILC on “a number of issues including its refinancing of the iconic Ayers Rock Resort.”
This loan comes after reports last month that Mr Scullion has been pressuring the ILC to edit sections of it’s latest annual report, written by Ms Casey, that detail her repeated calls to Minister Scullion for an inquiry into the controversial purchase of the resort.
Regarding this, a spokesperson for Mr Scullion told NITV that he merely “requested that the ILC Board consider how it might respond to the inaccuracies in the former chair’s statement.”