Question

1. An introduction/summary of the Government Guarantee.
2. The general impact of this policy to the efficient frontier based on the Australian environment. (2+2=4points)

Answer 1

Introduction Government's Guarantee

_{The Financial Claims Scheme (FCS) is an Australian Government scheme that provides protection and quick access to deposits in banks, building societies and credit unions in the unlikely event that one of these financial institutions fails.}

_{A financial guarantee is a contract by a third party (guarantor) to back the debt of a second party (the creditor) for its payments to the ultimate debtholder (investor)}

_{Government guarantees are increasingly important as a policy instrument in public infrastructure investment and to assist the banking and financial sectors following the global financial crisis. This paper analyses how different modes of accounting characterize such guarantees in the contexts of public sector financial reporting, statistical accounting, budgeting and long-term fiscal projections. Guarantees are difficult to specify for accounting treatment and consistent conceptualization of liabilities. These difficulties make it attractive for governments to treat obligations as off-budget and off-balance sheet contingent liabilities, rather than recognize them in financial statements and statistical accounts}

The general impact of this policy to the efficient frontier based on the Australian environment

Environment Australia commissioned a study to review and investigate current and potential initiatives in Australia to change consumption patterns. The report: More with Less - Initiatives to Promote Sustainable Consumption, broadly categorizes current initiatives and assesses the relative success of each measure in affecting consumption in a manner which reduces its environmental impact. The main initiatives analyzed for areas of activity include: product and material purchase, use, disposal and recycling; travel and transport, vehicles and fuel, urban form and design, energy efficiency, food, clothing, cosmetics and pharmaceutical's, chemicals and cleaning supplies, water use and disposal, gardens, vegetation and pets, recreation, and investment. The report also identifies further areas of activity which offer significant potential for measures to reduce the environmental impact of consumption

Australian scientists have played an active role in the various components of the World Climate Research Programed including the World Ocean Circulation Experiment, the Global Energy and Water Cycle Experiment and the Tropical Ocean-Global Atmosphere (TOGA) program and in the IPCC. Australia has provided funding to the WMO to carry out a Climate Monitoring and Impacts Study in the South Pacific region.

The following programs support integrated approaches to the planning and management of land resources:

1. The National Land care Program which provides support for natural resource management projects with a production-oriented or nature conservation focus.

2. Land care related forestry programs - the Farm Forestry Program (FFP) and the North Queensland Community Rainforest Reforestation Program (CRRP)

3. The Vertebrate Pest Program (VPP) and the Feral Pests Program (FPP). The FPP focuses on the impact of feral pests on native species and the natural environment, while the VPP aims to reduce the impact on agricultural production.

4. The States Cooperative Assistance Program which seeks to develop nature conservation projects of national or international significance in cooperation with the States and Territories

5. The Grasslands Ecology Program which focuses on identifying important remnant native, grasslands and grassy woodlands, and developing strategies in consultation with the States/Territories to ensure their protection

6. Numerous State and Territory based programs employ integrated catchment management techniques, including programs directed at the John stone River region in Queensland and the Peel/Harvey area of Western Australia.