is it technically insolvent?, page-13

Jelly


The assessment is in dispute and could take years to resolve and such matters are normally settled if required for much less the the original assessment raised.

At this stage one liability is only contingent therefore does not effect solvency and provisions (not payments) will be made in relation to the other.

AUSTRALIA AND NEW ZEALAND BANKING GROUP 2003-01-30 ASX-SIGNAL-G

HOMEX - Melbourne

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There has been recent unfortunate speculation regarding ANZ's
contingent tax liabilities. As previously stated, ANZ believes it has
adequate tax provisions for these historical tax issues.

In ANZ's 2002 Financial Report, in Note 48, ANZ outlines its
contingent liabilities. ANZ now reiterates and further clarifies Note
48.

The two main issues currently under review by the Australian Taxation
Office ("ATO") are:

1. LEASE ASSIGNMENTS DATING BACK TO 1991 AND 1992

The ATO has raised assessments using three alternative tax
treatments. Even if the ATO is successful, only one could potentially
be valid. The accounting profit of these assignments was
approximately $50 million, while the largest of the alternative tax
treatments could impose tax of approximately $140 million. This
matter is currently before the Federal Court and based on legal
advice, ANZ strongly believes no further tax is payable.

2. SECURITIES LENDING, EQUITY SWAPS AND OTHER SIMILAR KINDS OF
TRANSACTIONS

These date back to 1996 and subsequent years. They were undertaken in
the normal course of our banking business and were relatively common
in the market. No assessments have been issued, although these are
likely this year. The accounting profit was less than $200 million
and the transactions involve tax credits of approximately $350
million. ANZ holds legal opinions, which strongly support the
availability of these tax credits.

Additionally, at ANZ's request, the ATO is reviewing the taxation
treatment of the sale of Grindlays in 2000. At this stage we have not
had any indication from the ATO that they are uncomfortable with the
tax treatment we applied. While this is a complex transaction, we are
confident the tax approach applied is appropriate.

Since tax is a complex and often uncertain area, ANZ's policy is to
raise prudent tax provisions to cover contingent tax risk. We remain
confident our provisions are adequate and while we would like to
resolve these matters as soon as possible, our experience is this
process could take considerable time.


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