howard approval rating, page-112

Not forgetting the need to cover Costello's $6b currency gambling debt.

"Treasury officials have reluctantly revealed that between July 1997 and July 2001 they lost $4.875 billion on the foreign currency deals.

But the cross-currency swap from Australian to US dollars is expected to cost a further $1 billion over the next year bringing the total to almost $6 billion.

....

Dr Henry and other Treasury officials have refused to answer any questions about the currency swap.

When The Sun-Herald tried to ask him questions at a Canberra shopping centre yesterday, Dr Henry sped off in his salary-package SS Commodore.

.....

When Treasury and AOFM officials were questioned at recent Senate estimates hearings, they had to correct their evidence three times before admitting the scale of the losses.

But Dr Henry still denied there was a problem, insisting that the losses did not matter because they were not yet ``realised''.

Senator Conroy said Treasury and Mr Costello should have quit the swapped loans and accepted the losses long ago.

``But they continued to speculate and it's cost taxpayers $6 billion,'' Senator Conroy said.

Senator Conroy said Mr Costello was as much to blame as Dr Henry, despite his attempts to disown the policy.

``The buck stops with the Treasurer,'' he said.

HOW TO LOSE A FORTUNE

* Trying to reduce the cost of the Federal Government's $62 billion debt, Treasury took advantage of low US interest rates. It speculated in financial derivatives known as cross-currency interest rate swaps. In effect, the Government swapped future interest payments due in Australian dollars for payments in US dollars, exposing it to adverse currency movements.

* Between 1988 and 1999, Treasury cross-currency swaps generated benefits of about $140 million a year.

* Treasury exposed 15 per centof the government debt tocurrency fluctuations.

* Although the Australian dollar (US60cents in mid-2000) was expected to gain in value, it fell to US47-50cents (2001). Instead of the debt cost being reduced, the foreign currency exposure climbed to 20pc by June 2001.

* As payments had to be made in US dollars, the value of these obligations increased as the Australian dollar fell. For every 1pc drop in the dollar's value, we lost $200 million.

* Treasury has revealed that between July 1997 and July 2001 we lost $4.875 billion. The swap is likely to cost another $1 billion."

http://petermartin.blogspot.com/2007/02/advice-from-dr-ken-henry-think-very.html