The two Queenslanders at the top of the Federal Government, Kevin Rudd and Wayne Swan, were spitting chips this week when the Commonwealth Bank jacked up home loan interest rates by more than the official 0.25 percentage point rise by the Reserve Bank.
But whilst urging ordinary Australians to switch banks, the Labor Party in Queensland has no plans to sever its own substantial commercial dealings with our biggest bank.
The 2006-07 political donations figures, which were belatedly released on February 1, reveal that Labor Holdings, the party's investment vehicle in Queensland, has a $10 million margin loan with Commsec.
This supports a 70-strong share portfolio worth more than $50 million, which includes 42,500 Commonwealth Bank shares valued at $2 million.
However, this is dwarfed by the 1.18 million shares Labor Holdings owns in Suncorp, the Brisbane-based banking and insurance group, which are worth $18 million.
So, the party for the battler – which is urging Australians to get tough with their banks – owns more than $20 million worth of shares in listed banks. Nice.
I've looked at the confusing annual returns of Labor Holdings for the past eight years and have reached three conclusions:
· Rudd and Swan have a fabulous record when it comes to financial management;
· Australian Labor is one of the richest political parties in the democratic world; and
· Australia has one of the world's worst financial disclosure systems for political parties
Labor Holdings was set up in 1986 when the party sold radio station 4KQ for $16.5 million. With Wayne Swan as campaign director and Kevin Rudd as chief of staff to opposition leader Wayne Goss, Queensland Labor ended 32 years of National Party rule in December 1989 without eating into their war chest.
Indeed, the funds were invested and Queensland Labor only ever allowed itself to spend the earnings on the investments which are now believed to be worth almost $100 million, although you can't be sure thanks to Australia's byzantine campaign finance disclosure laws.
The 2006-07 Labor Holdings return shows it received a whopping $25 million from the Commonwealth Bank, although party officials caution that this includes every receipt which hits the bank account, including loans.
Whilst even community kinders have to reveal their balance sheets to the Brumby Government each year, it is just extraordinary that Australian political parties can keep their assets hidden from public scrutiny.
Based on media reports and some publicly available documents, the ALP and its affiliated unions would appear to have net assets of between $700 million and $1 billion. The militant CFMEU alone has net assets of more than $100 million.
Whilst those Liberal ads last year thundered that Labor would “stuff the economy”, any political movement which manage its own finances so astutely surely wouldn't mishandle the public's money.
In what might be an important pointer to his stewardship as Treasurer, Labor Holdings chairman John Bird told The Sunday Age that “you can attribute some of the investment success to Wayne Swan” from his five years as a Labor Holdings director and secretary before entering federal parliament in 1993.
Kevin Rudd's record is even more encouraging.
Rudd and Swan helped get Labor into office in Queensland without denting the party's finances. Rudd then spent the next six years as Queensland's most powerful unelected official and his legacy was the strongest balance sheet of any state with low taxes, no net debt and fully funded super. Wouldn't John Cain and Joan Kirner have loved that!
From 1995 until November 2007, Rudd didn't personally have responsibility for any public finances, but it was during this period that a certain Therese Rein, supported by her husband Kevin and directors such as Wayne Goss, build up the huge Ingeus job placement business which turned over a staggering $261 million in 2006-07.
The Rudd family is clearly worth more than $20 million, so interest rates rises aren't a problem.
Whether it's the Queensland ALP, the Queensland public sector or his own family's finances, Kevin Rudd seems to have a remarkable Midas touch when it comes to managing money.
Let's hope he can do it again for the nation. Despite a five year boom, the Federal Government still has a negative net worth - $170 billion in debt and superannuation liabilities exceed our assets by about $5 billion.
As the nation battles with a $600 billion foreign debt, at least we know that Kevin and his party are fabulously rich – whilst simultaneously feeling our mortgage pain and advising that we switch banks.
At the very least Labor Holdings should sell a few bank shares and pay down that $10 million Commsec margin loan. Then again, whilst Commonwealth Bank home loan customer copped a 0.3 percentage point rise this week, Commsec customers were only stung 0.15 percentage points.
Maybe the bank was somewhat politically sensitive after all?
Listen to Stephen Mayne on 4BC Brisbane with Michael Smith.
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