Cossie's bulldust, exports low, tackling David Tweed

1. Bald-faced bulldust from Cossie and the PM



By Stephen Mayne

Remember the days when misleading parliament used to be a sackable offence and self-respecting politicians would immediately move to correct the record when they had made an inaccurate statement? OK, maybe that was a dream.

Peter Costello is copping it all over the place but the Prime Minister was even looser with the truth than his Treasurer yesterday over the Rob Gerard affair. On Tuesday John Howard told Parliament:

The relevant point about the dispute between Mr Gerard and the Australian Taxation Office is that, by hand of the letter from the commissioner, all the outstanding matters were resolved. So what is the fuss all about?

There never were any outstanding matters relating to Mr Gerard's personal tax affairs, they were all about his 50% owned company Gerard Industries, something Terry McCrann clearly spells out in another strong column this morning calling for Gerard's resignation.

By yesterday afternoon this surely must have been apparent to the PM, particularly after Costello told the house that Gerard's 14-year corporate battle wasn't settled until late 2003. Check out page 62 of yesterday's Hansard when Costello was asked when Gerard Industries reached its settlement with the ATO: "It was achieved in late 2003, I believe. I cannot give you the precise date."

Given that we all agree Gerard was appointed in March 2003, it is clear that Howard misled the house when he claimed "all the outstanding matters were resolved". They were not.

Yet just 10 minutes after Costello confirmed the "late 2003" settlement, the PM was asked whether he stood by his false claim on Tuesday and he managed to say the following with a straight face:

I repeat what I said yesterday. What I said yesterday was absolutely correct. Naturally, because of the secrecy provisions of the Tax Act, I am not privy to the individual affairs of a taxpayer, but I am privy to the wording of a letter which was provided by the tax commissioner and that wording stands for itself.

As we've said before, there were never any issues with Rob Gerard's personal tax return. The Tax Commissioner should be rebuked for sending a mealy mouthed letter that said there was no "personal" issues at exactly the same time as the mother of all bunfights was playing out in public in the Adelaide courts.

The press has been absolutely unanimous about this pathetic hair splitting, yet our two most important leaders continue to rely on this laughable ruse. If they can be this bald-faced on something so obvious, it makes you wonder about every weasel words denial that comes from this government.

Former NSW Auditor General Tony Harris summed it up perfectly on The 7.30 Report last night when he said that if Gerald "wishes to look after the Reserve Bank, he would do well by the bank and, indeed, by his own reputation by seeing that he should resign."





5. Cossie's record on failing to check histories



By Stephen Mayne

Does Peter Costello have a record of appointing people with controversial tax histories? That certainly seems to be the case with Rob Gerard, but what about the man he hand-picked to be chairman of ASIC, David Knott?

Crikey had a brush with the Federal Privacy Commissioner over Knott's controversial former business partner and convicted tax dodger Ian Collie, but this SMH story summarises the key points. Then Shadow Treasurer Mark Latham even fired out this statement in September 2003 and an even feistier effort the next day.

The Treasurer also made a solid defence of Knott to ABC's PM program.

Costello and Latham clashed in Question Time twice (1st and 2nd) over Collie's tax history and BRW's Adele Ferguson won the 2003 Melbourne Press Club Quill award in the business category for her story on Collie's past.

Even more embarrassing for Costello was the trouble that his chairman of APRA, Jeffrey Carmichael, found himself in 2003 after his credibility was already shot to pieces by the HIH Insurance collapse. This is from a story in The Courier-Mail at the time, which no doubt hastened the departure of APRA's chairman after five years in the job:

Legal check on APRA chief's deals

The chairman of Australia's financial industry regulator is the founder and co-owner of a financial services firm which has been accused of operating illegal investment schemes.

Dr Jeffrey Carmichael's Gold Coast-based company Atlantic 3-Financial (Aust) Pty Ltd has agreed to freeze activity in its mortgage investments and allow outside accountants to comb through records after a Supreme Court hearing yesterday in Brisbane. The Australian Securities and Investments Commission alleges Atlantic 3-Financial and its directors had pitched the mortgages to investors without a required licence for managed investments.

Justice Philip McMurdo said yesterday "the evidence before me indicates it's an unlawful scheme.''

ASIC maintains the unregistered schemes have operated since July 1998, meaning the alleged infractions occurred over a three-and-a-half year period when Dr Carmichael still served as a company director. Although Dr Carmichael stepped down as a director and secretary of Atlantic 3-Financial in January last year, he and his wife Elizabeth retain a third of the shares, with the balance held by Dr Fred Acker.

So let's see. Costello has appointed one of Australia's biggest tax dodgers to the Reserve Bank and on discovering the scale of the activity still won't take a backward step. Then we have the former partner of a convicted marketer of sales tax evasion schemes as chairman of ASIC and a promoter of unlawful investment schemes running APRA.

It makes you think a bit about putting the friend of big business, Graeme Samuel, in charge of the ACCC . Many of these appointments are of personal friends. Other friendly appointments included Steve Vizard to the Telstra board by his mate Richard Alston.

And who can forget the appointment of John Howard's old mate John Pascoe as chief Federal Magistrate when he and his company, George Weston Foods, were regularly done over for breaching the competition laws? Remember this exchange with Seven's Mark Riley going into last year's election?

MARK RILEY: Prime Minister, in the news this week, the George Weston case, which I am sure you are aware of. The ACCC – a $1.5 million fine, Justice Roger Giles saw price-fixing, he saw all sorts of anti-competitive practices at play there between George Weston and the Manildra Group. The chairman of George Weston, John Pascoe, has been appointed by your Government as Chief Magistrate. Do you have any concerns about his position now, knowing the result of that ACCC prosecution?

JOHN HOWARD: No, not of itself, because the court dealt with an issue, and they fined the company and the law took its course. I don't know whether the company is considering an appeal. I am not sure, and I don't really want to get into the detail. Mr Pascoe, I know. He is a person of impeccable character, to my knowledge, and he was checked out as you normally check these people out when these appointments are made, and we saw no reason not to appoint him.

Anyone see a trend here?




22. Australia's sagging export performance



By Stephen Mayne

BRW has an interesting story today quoting ANZ chief economist Saul Eslake claiming that Australia has just produced "the worst export performance for more than 50 years."

How so? Well, Eslake has calculated the average annual growth in exports in four year blocks and says the 0.64% annualised growth over the past four years is worse than anything since the early 1950s. By way of comparison, the previous four periods after the Asian economic crisis saw annual growth in exports of 6%.

However, these statistics are only dealing in export quantities and our economic growth has been saved by the best terms of trade in 30 years as Chinese demand for our commodities lifted the value of exports to record highs.

But what happens when the current housing bubble and commodities boom comes to an end? We'll still have a $58 billion current account deficit and we won't have the ever-increasing coal and iron ore export revenue to save us.

It was noted last year that Australia had fallen below 1% of world exports for the first time, so what seems to be the problem?

Clearly, our manufacturers are shrinking in the face of all this competition from China. Barely a week goes by without some sort of major plant closure announcement from the likes of Holden, Kodak or even Kemalex Plastics.

However, our pathetic overall performance in high growth sectors such as shipping, pharmaceuticals and IT infrastructure will continue to count against us.

Sure, new iron-ore mines and record exports from the dodgy AWB are always to be welcomed (save for the small matter of giving Saddam's regime $300 million) but export growth is the lifeblood of economic prosperity and we seem to have a major problem on our hands. Simply selling more poker machines to Japan is not the answer.





23. Tackling David Tweed, giving shareholder activists a bad name



By Stephen Mayne

Crikey bought the mandatory $500 worth of shares in Clime Capital yesterday so if sharemarket scavenger David Tweed decides to call another EGM and show up in a silly outfit, I'll be able to pop along and join in the fray. Along with Jack Tilburn, this guy gives all shareholder activists a bad name and he deserves to be hounded every time he puts his head up in public.

It is not usual for listed companies to allow the press to film and record shareholder meetings but Clime's chairman Roger Montgomery clearly decided this was the best form of attack at this week's AGM against Tweed, who has now used his 19.9% stake to call three EGMs in an attempt to be bought out for a profit of almost $1 million.

The interview with Tweed that PM's business editor Peter Ryan put to air on Tuesday night was hilarious and well worth a listen. As Mark Colvin back-announced, "it was a bit like interviewing a brick wall."

Ryan was even pictured in The Australian holding up a microphone to Tweed as he addressed the meeting, something I've never seen in hundreds of AGMs. A typical strategy is what Rupert Murdoch allows, where the electronic media can film his arrival but then are locked out for the actual meeting.

Tweed appears to have no shame, but he was clearly uncomfortable in the media spotlight, so maybe the strategy of calling in the press worked. Check out this photo of his silly outfit in The Age and go here for an earlier photo of Tweed being confronted by two of the pensioners he'd ripped off with his low-ball offers.

Tweed appeared to vote his stake against Clime's remuneration report but it was still passed with more than 65% of the vote.

Copyright © 2022 The Mayne Report. All rights reserved

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