Backing Rudd, Lachlan Murdoch, St Kilda AGM, Kew Cottages, Darebin, Kons, Manningham, defending Macquarie, memoir and new Rich Listers

June 7, 2013

Dear Mayne Report Readers,

Greetings for first time in 2012 and apologies it has been six weeks since our last missive on December 31.

Today we've got plenty of lively material including commentary about Lachlan Murdoch, Kew Cottages, Gunns, Darebin, Lend Lease, new Rich Listers, ASA, Manningham, transparency, the St Kilda AGM and our memoir contract.

But we're top heavy with what are hopefully some genuinely independent observations about Labor's leadership crisis, including a strong argument that Kevin Rudd should be put back in The Lodge.

Enjoy it all folks, or if you'd rather not receive these monthly email newsletters, click here to unsubscribe.

Why Labor should switch back to Rudd

Not sure why, but Crikey declined to run a shorter version of this story today, but here goes....

For all the forests being destroyed about Labor's federal leadership crisis, one thing we are not seeing from major media outlets or political journalists is a comprehensive endorsement of either Julia Gillard or Kevin Rudd as the better option.

I'm happy to come straight out and strongly argue the case for a switch back to Kevin Rudd.

Gillard is untrustworthy, unprincipled and terminal. Both her and Labor find their polling support through the floor and without a change we are now just 18 months away from the unthinkable – Prime Minister Tony Abbott.

Gillard has had long enough to prove herself and failed miserably. The trust has gone. She's communicating poorly, making elementary mistakes and people have stopped listening. For me, the pokies betrayal of Andrew Wilkie was the last straw. It was as if she doesn't care about the world record $5 billion a year problem gamblers lose on the pokies.

Even yesterday's definitive claim that her office wasn't responsible for the video leak was hard to believe, especially after the Australia Day protest. How would she know?

Similarly, what arrogance to suggest Darren Cheeseman's endorsement of Kevin Rudd is somehow linked to potential job losses at the Point Henry aluminium smelter in his electorate.

What rot. Cheeseman is backing Rudd because he was only elected in 2007 courtesy of Rudd's popularity and his only chance of survival in 2013 is through a return to Kevin Rudd.

Labor's primary vote will rise significantly the moment Rudd is back in The Lodge. The party will be in with a show once again, especially with Conservative governments in the four largest states after Queensland falls next month.

Rudd won a landslide victory in 2007 presenting himself as a conservative to middle Australia and he still rates highly courtesy of not being a member of the cynical ALP factional and union machines.

Fancy having the notorious Graham Richardson gloating on Four Corners about helping bring down Rudd by patching up differences between David Feeney and Mark Arbib.

Gillard's endorsement of the self-obsessed Bill Shorten has been another blot on her copybook. Shorten has been involved in more cynical factional hatchet jobs than anyone with the possible exception of Richardson himself. As an example, check out today's attack by Shorten's closely aligned factional daleks on Chris Bowen, one of the better talents to emerge out of the NSW Right in recent years.

For instance, how stupid was it of Gillard to yield to the demands of Shorten and Steve Conroy to kick her own long-time backer, Kim Carr, out of Cabinet in December's ill-considered reshuffle. Why gratuitously make enemies like that? Carr is tight with Darren Cheeseman and Rudd's numbers man, Allan Griffin.

Despite what Barrie Cassidy said on 3AW Breakfast this morning, Gillard appears to have lost the support of much of the Victorian Left - her home base. One observer put it down to "historical hatred" given the original preselection battle between Gillard and Lindsay Tanner for the seat of Melbourne. Allan Griffin now leads the old "Tanner left" and Andrew Giles, convenor of Gillard's SL faction in Victoria, is mooted to replace him after he retires in 2013. This starts getting complicated when you consider that Gillard's long term mentor and former live-in partner, Michael O'Connor, is now national secretary of the CFMEU, the largest union bloc vote in the ALP Left.

The factional bosses know that Gillard can't win in 2013, yet handing over to a “third option” is not viable because it would just confirm the NSW disease of revolving leadership doors.

A return to Rudd would be different because it could be portrayed as correcting a mistake. Rudd is a great campaigner and the punters would love to see the cynical faceless men eat dirt.

Rudd's most publicly known attack on the factional bosses when Prime Minister came with this Glenn Milne story in September 2009 about his foul language defending proposed cuts to printing allowances.

Voters had no problem with it yet people like David Feeney, still wallowing on the backbench even under Julia Gillard, clearly took the dressing down badly and were determined to take their revenge.

This is the key to allowing Rudd a second crack at the top job. It must be done with conditions revolving around consultation and inclusiveness. For starters, caucus should reclaim the right to select the Ministry and that means Arbib, Shorten, Feeney and even Gillard, if she wants it, would serve under Rudd.

If Rudd really claims to have changed then various senior ministers should come down on him like a tonne of bricks every time he steps out of line.

An unfair dismissal by the party of workplace fairness

The biggest problem with Rudd's execution was that voters felt he wasn't given the necessary three written warnings demanded under Labor's Fair Work Act.

It was an unfair dismissal in so many ways - and the real reasons were never properly explained, until now.

If Club Fed's industrial relations tribunal – aka the 103 Caucus members – now insist that Rudd be reinstated into his job, the public will appreciate cowboy employers (ie the faceless men) being put in their place.

But Rudd will also know that he is in the Last Chance Saloon having learnt that Prime Ministers have very little power without majority support in Cabinet, Caucus and, to a lesser extent, both houses of Parliament.

As for policies, the first thing Prime Minister Rudd should do is ditch Gillard's mission impossible promise of delivering a budget surplus in 2012-13.

Instead he should proudly say that globally modest budget deficits was a small price to pay for stimulus during the GFC and Australia's national balance sheet can comfortably absorb it.

The two other things he should do is modestly reduce the $23 a tonne fixed price on the carbon tax (assuming the Greens and independents agree) and take a revised version of his original mining tax proposal to the next election.

The histrionics of Clive Palmer, revelations that Fortescue Metals has never paid company tax and Gina's Rinehart's $20 billion fortune and dysfunctional family make such a policy reversal very easy to justify – especially if Rudd admits that deficits remain on the horizon into the future.

Assessing today's media performance by Gillard

Julia Gillard was smart to ring-fence the education components of today's press conference to launch David Gonski's review of education funding. She said at the start that she would answer leadership questions after Gonski had left and the gallery, with the polite exception of Ten's Paul Bongiorno, played by these rules of engagement.

After Simon Crean, presumably without the endorsement of Gillard, undertook his own media blitz this morning effectively demanding the PM sack Rudd or call a spill, Gillard appeared weak when she presented her "getting on with the job" line.

However, from a tactical point of view Gillard has done precisely the right thing. She can't sack Rudd for being disloyal when she herself was one of the most disloyal deputy prime ministers in Australian history.

And Rudd has denied Andrew Wilkie's version of events, along with various media reports of private conversations with journalists and editors.

Rudd is perfectly entitled to play the victim here after someone leaked his video tirade. It wouldn't play well to sack a block after a Gillard ally did him over.

One of the most interesting disclosures today came when Bruce Hawker disclosed to Sky News that he was with Kevin Rudd on Saturday night when the video was first loaded up.

As Simon Crean's old press secretary Stephen Spencer asked on Twitter: "Did Bruce ring Sky or did Sky ring Bruce?"

It is worth noting that Hawker is a paid Sky contributor and Rudd has been studiously pushing the Sky interests during the recent Australia Network tender fiascos.

If Hawker is meant to be campaign director for Anna Bligh, what was he doing spending time with Kevin Rudd on Saturday night, the day before the official campaigning period commences? And vice versa. Surely Hawker has nothing to add to Rudd's preparations for the G20 and subsequent discussions about piracy and Syria.

Hawker is effectively acting as Rudd's campaign director - and for that he recently copped this unfair flogging from the Bill Shorten factional daleks.

Maybe Rudd will take the amazing advice proferred by Andrew Bolt today when he wrote that the 5th most important change Rudd could make as Prime Minister would be to: "Scrap the media inquiry called to cow Labor's media critics. Labor should defend free speech, not restrict it. It also wouldn't hurt Rudd to mend fences with News Ltd."

Silly old Bolter still hasn't realised that the Murdochs have lost their ability to hand-pick governments and Prime Ministers.

Maybe Rupert should use next week's launch of the Sunday Sun to declare who the 103 Labor MPs should select in what many experts have declared is an almost certain Caucus showdown, despite the PM's denials today.

What is Lachlan Murdoch doing in London?

Lachlan Murdoch has just been appointed non-executive chairman of Network Ten, a business which competes against News Corp's Foxtel and Sky operations in the Australian market.

So why isn't he in Sydney overseeing the work of new CEO James Warbuton?.

Lachlan's decision to fly to London to walk the newsroom of The Sun with his father ahead of today's announcement about the Sunday Sun on the front page of the biggest selling tabloid in the English speaking world was the latest example of where his true loyalties lie.

We've written plenty about Lachlan's return to the News Corp fold in recent days, including the following:

Can Rupert Murdoch save The Sun?
ABC commentary site, The Drum, February 14, 2012

Rupert Murdoch under threat over The Sun
ABC radio's PM program, February 13, 2012

Questions abound about Lachlan Murdoch's role at News Ltd
Crikey, Monday, February 13

Rupert skips conference call grilling from analysts, hacks
Crikey, Thursday, February 9

Andrew Bolt and Mark Day reveal how Lachlan Murdoch is breaching cross-media laws
Crikey, Wednesday, February 8, 2012

Whilst we are chuffed that Rupert Murdoch took our advice in The Drum last week and flew to London to announce The Sunday Sun, it is now clearer than ever that ACMA should force Lachlan to make a decision about where his loyalties lie. He can't continue taking an active role in the management of News Corp all over the world whilst at the same time serving as chairman of Network Ten.

Mayne Report
Rich List

BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1500 names with those who've fallen back below $10 million now italicised. Below are our latest new or updated entries:

Andrew Lu: related to Chinese billionaire Lu Guanqiu, this prominent lawyer and art collector has an estimated $50 million invested in Australia and scored himself a seat on the National Gallery of Australia. His gong also points to powerful networks and lots of philanthropy for someone still in their 30s.

Jennifer Lee: owns the Brighton Savoy Motel where the land alone is worth about $15 million. Also owns several other properties.

Henry Goldberg: the former managing director of Philip Morris in Australia has amassed a tidy share and property portfolio worth more than $10 million.

Geoff Sutherland: owns Sutherland Farrelly Real Estate which made a killing when Pyramid went under after scoring most of the real estate sales from liquidator Tony Hodgson. Owns a few properties himself these days.

Tony Hodgson: co-founder of corporate undertakers Ferrier Hodgson who also made plenty serving as a professional director over the past 20 years.

Henry Pinskier: a successful investor in medical clinics and a range of others properties.

Anthony Gow Gates: owns Gow Gates insurance brokers in Sydney which began insuring bloodstock and general insurance but has now diversified successfully into other lines.

We love your Rich List tips and if you'd like to remain anonymous, just click on the image below.

Memoir contract signed, now for the 100,000 word manuscript

The contract has been signed and the first installment of the advance banked, so the pressure is on to deliver a 100,000 manuscript by June 1, 2011.

You only ever get one chance to write a memoir so we're hoping to produce a rollocking tale on politics, media and business, including 7 years working for Murdoch, the Kennett press secretary years, turning whistleblower against the Premier, the Crikey battles, defamation struggles, 400 AGM encounters, 52 election defeats and the last 3 years on Manningham City Council.

There will also be an element of polemic about Australia's various power management and transparency systems, along with our corporate, media and institutional performance.

If you'd like to pre-order a signed copy - and receive occasional email updates about the research and writing process over the next six months - just donate $40 to The Mayne Report through the donations section towards the bottom of this email edition and we'll put you on our "Memoir Sealed Section" email list.

Assessing power in Australia

It won't be easy penning 100,000 words but a flavour of what is likely to come can be seen in this Stephen Murray-Smith annual lecture delivered at the State Library of Victoria on October 13, 2011.

SLV chairman and former Victorian Premier John Cain is now 80 and delivered an introduction which focused on the importance of making genuinely independent commentary, something which will be evident in the memoir.

Check out a video of the full box and dice here.

A cracking public meeting over Lang Walker's Kew Cottages fiasco

I've been to some lively public meetings in my time but few rank alongside last Thursday night's community meeting over the 27ha Kew Cottages site being developed by colourful Sydney billionaire Lang Walker.

The site has a sordid history of broken promises, excessive secrecy and utterly inappropriate political donations by Walker, who even sent Graham Richardson down from Sydney to try and bang a few Labor heads together.

Once the Brumby Government was defeated, things were meant to get better.

Alas, whilst local member and Justice Minister Andrew McIntosh repeatedly called the Labor government's contract with Walker "an abomination" he hid behind so-called "sovereign risk" arguments in justifying little change and the non-release of the contract.

Health Minister David Davis, an upper house member for the region which includes leafy Kew, made the incredible claim that he supported Boroondara Council's recent litigation over Walker's attempts to have nature strips classified as public open space. He even called on Boroondara's Green mayor Heinz Kreutz to further explain what was happening?

It wasn't until Davis had left the meeting that Mayor Kreutz explained that council had only obtained legal advice and this had strongly argued against actually launching litigation.

Given that Kew Cottages is state government land and the previous government kicked the council totally out of the process, it was incredible to have Ted Baillieu's factional enforcer somehow calling on the council to explain what was going on. Mayor Kreutz just asked that the government reinstate the council as the relevant planning authority.

Both McIntosh and Davis came across as being poorly briefed on the whole situation, which is ultimately in the hands of Major Projects Minister Denis Napthine.

The Baillieu Government is badly split on planning issues. Planning Minister Matthew Guy is strongly pro-development, yet Baillieu himself is hugely conservative and believes passionately in preserving Federation suburbs which dominate the Boroondara landscape and includes his Hawthorn electorate.

Throw in a whole bunch of angry new residents who are opposed to ongoing disability services being provided on the historic site and cranky with Walker for failing to deliver their long-promised pool, gym and cafe, and you have one almighty mess.

Surely the Baillieu government should just write a cheque to make Lang Walker go away and then completely go back to the drawing board with a new masterplan for the site which involves Boroondara Council at every level.

Update from the Australian Shareholders' Association

Like everyone in the market, the Australian Shareholders' Association has been buffeted by volatile markets and investor disinterest in recent years. However, ASA certainly did have its biggest ever AGM season for media coverage, largely courtesy of the efforts of CEO Vas Kolesnikoff.

In recent weeks we've launched an open letter advocating a merger with the Queensland-based Australian Investors Association, along with detailed reviews of our monitoring process and policy framework.

All these processes will involve detailed consultation with stakeholders, volunteers and members and we've got a series of meetings in Melbourne later this week to work through some of the issues.

2012 is shaping up to be another big year for change and development at ASA and it would be great to have your membership support as we continue to stand up for shareholders. Click on the link below if you fancy getting on board to lend a hand.

Gunns AGM report for ASA

The following report on the Gunns AGM has been on the ASA website for the past few weeks:

By Stephen Mayne

With a sense of foreboding, I returned to the Arthur Streeton Auditorium at the Melbourne Sofitel, scene of the last Timbercorp AGM in 2009, wondering if 2011 would be the last AGM for another struggling timber player, Gunns Ltd. For a company which has seen its share price plunge from more than $3.50 in 2007 to just 10c in early 2012, shareholders were remarkably sympathetic, re-electing three directors with more than 99% in favour and the remuneration report with 92%.

However, the three hour AGM in Melbourne, the company's first away from its recently sold Launceston headquarters, was still a feisty affair as greenies, anti-pulp mill campaigners, big and small shareholders, former directors and even the CFMEU all spoke on the challenges facing the company.

Whilst there was no announcement of the long-awaited joint venture partner for the $2.3 billion Tamar Valley pulp mill, CEO Greg L'Estrange waited until the very last of his 24 slides to present some bullish numbers claiming the mill, when combined with the Gunns forestry estate, had an enterprise value of $3 billion.

Assuming 55% project gearing and a 50-50 joint venture, Mr L'Estrange claimed Gunns would only have to contribute $675 million of equity and given its current contribution of land, roads, infrastructure and trees was worth $940 million, this would produce a $250 million surplus.

This would presumably be used to pay off the core banking facility which is forecast to be just $216 million by the end of January after the current sweeping asset sale program is completed.

The trouble with all this is that the market just isn't buying it and the European debt crisis is raising serious doubts that a pulp mill partner can be landed on reasonable terms.

The longer the delay, the lower the share price such that Gunns is now only capitalised at about $100 million when it claims to have net assets worth $1.05 billion – and that was after $481 million in write-downs in 2010-11.

Chairman Chris Newman, who replaced CEO John Gay when he was fired in 2010, admitted the performance had been dreadful and said this would be his final AGM.

There was little discussion of ASIC's move to charge Gay with two counts of insider trading two days before the AGM, although this did significantly expand the media presence. In a change from the controversial Gay days, journalists were not locked out of the Gunns AGM.

However, long-suffering shareholders are locked into some big losses and can only hope the company pulls off the biggest industrial development in Tasmania's history and delivers a world class, highly competitive pulp mill that can soak up the enormous timber supply delivered by tax-driven MIS schemes in years gone by.

Here's hoping we can report back on such developments at the 2012 Gunns AGM.


Footnote: And it does now look like we'll get a 2012 AGM after Kiwi billionaire Richard Chandler agreed take a 40% stake at the bargain basement price of just 12c, as was discussed during this recent interview on ABC Tassie and The World Today.

Lend Lease AGM report for the ASA

The following account of the Lend Lease AGM has been on the ASA website for a few weeks now.

By Stephen Mayne

Lend Lease had a good year in 2010-11 with NPAT leaping 43% to an impressive $492.8 million. Australian development, infrastructure and construction remains the key driver with NPAT up by $34.5 million to $281.4 million, helped by the $960 million purchase of Valemus Australia in early 2011, which is progressing well.

ASA made a late switch in voting intentions to reverse opposition to the re-election of long-serving US-based director Peter Goldmark. We also withdrew support for David Ryan, on the grounds that he was chairman of ABC Learning when it collapsed and suffered a 29% against vote when last up for re-election at Lend Lease in 2008.

The AGM was a lively affair and Lend Lease provided ASA with a copy of the 35-page transcript of proceedings, which is a useful move to assist monitors with subsequent reporting.

Mr Goldmark, as chairman of the nomination committee, explained that he conducted “a tough and thorough review” of Mr Ryan's performance which included a “thorough investigation” of the ABC Learning situation which did not reveal anything which warranted his departure from the board after 7 years.

Mr Goldmark observed that this would be his final term as a Lend Lease director.

Chairman David Crawford, who has had a long association with Mr Ryan over more than 20 years, strongly supported Mr Ryan and declined to be drawn on his own retirement plans after serving for 10 years as a director, the past 8 as chairman.

Mr Crawford, a former national chairman of KPMG, responded testily to criticisms of what The Australian's John Durie describes as KPMG's “world record” run as Lend Lease auditor for the past 53 years.

When the ASA asked the out-going KPMG auditor, Chris Hall, about nursing home bed licence valuations, Mr Crawford shielded him from answering the question by declaring that the accounts were prepared by the Directors and the auditor did not query this component of the accounts.

Shareholders welcomed the appointment of Jane Hemstritch as a new director, although she was cautioned that her dance card is getting pretty full with 4 ASX100 directorships.

All resolutions were comfortably passed after a poll and it was disappointing the $3 billion in losses at ABC Learning still saw Mr Ryan re-elected with 92.4% in favour.

ASA opposed the remuneration report and monitor Nick Bury's detailed explanation was read in full to the meeting. Mr Crawford is one of the highest paid chairs in Australia and CEO Steve McCann enjoyed a 28% increase in his total remuneration to an excessive $6.12 million.

The remuneration report passed with 89.64% in favour and the increase in the $500,000 increase in the fee cap for the NEDs to $3 million was supported by 98.14% of voting shareholders.

There was one lively exchange at the end when Mr Crawford admitted that Lend Lease is one of the few ASX-listed companies which pays directors an additional travel bonus fee that cost shareholders $355,000 in 2010-11. Not bad work when you travel first and business class, but Mr Crawford said this was standard for global companies and required to attract good international talent.

Taking the pokies battle to the St Kilda AGM

Paul Bendat and I headed down to the St Kilda Football Club AGM a couple of weeks ago to take the company to task for its Centrebet jumper sponsorship and ongoing pokies operation at Moorabbin.

Check out Paul's excellent account on his blog, including photos of the the quite intimidating presence of 22 burly footballers staring at us from a couple of metres away as we lobbed our various comments at the board and management.

Also, check out this package of our past pokies coverage and try watching this 30 second anti-pokies ad made by Paul Bendat in 2010 featuring our daughter Alice, who was 6 at the time:

Interesting upcoming governance conference

The old Risk Metrics governance team set up a new shop, Ownership Matters, a few months ago and have put together what looks like a lively conference to be held at the Melbourne Business School on April 3.

Speakers include ASIC deputy chair Belinda Gibson, out-spoken fund manager Peter Morgan, Lindsay Tanner, Ziggy Switkowski, Ian MacFarlane, Gideon Haigh, Fairfax CEO Greg Hywood, Alan Kohler and Oribs Capital's Simon Marais.

The full details are here but I'm particularly looking forward to this session:

Panel session:
Is the business media failing investors?
Gideon Haigh
, Writer, Ian Macfarlane, Former Governor of the Reserve Bank of Australia,Greg Hywood, CEO Fairfax Media and Alan Kohler, Business Spectator.

Based on recent media reports, Business Spectator and Eureka Report could well be sold by the time this event comes around, although Kohler was quoted using the F-bomb in The Australian today when complaining about the slow sales process. I'll be seeing Kohler later this week when debuting on the couch for his revamped Inside Business program which is now pushing an Insiders-style panel discussion each week.

Firing up our Youtube channel again

When The Mayne Report first launched in 2007 we were posting daily videos on our Youtube channel. Alas, the cost and time of in-house video production, plus the lack of any revenue, made this model unviable. Besides, daily videos wasn't necessarily the best way to campaign for better corporate governance through shareholder activism.

In the end, it made more sense to channel our efforts into appearing on other people's videos, such as these two appearances on Ten's The 7pm Project, rather than trying to build an audience from scratch.

However, when you look back at all the video we've got spanning our own productions, one-off interviews, profiles or lengthy interviews such as Nine's Sunday program or ABC TV's Talking Heads, the regular spot on Sky's Business View and webcasts of AGMs, it turns out we've got a rather large library of material.

Cross-posting has become much easier now, so we have relaunched our Youtube channel and hope you enjoy our many playlists of material.

Some of the playlists on our video site including the following:

11 rounds with Rupert Murdoch

A few rounds with the Millionaires at Macquarie Group

Bye bye Babcock & Brown

The pokies

Gender equity and media trustworthiness in Intelligence Squared debates


Campaigning to end the farmer gerrymander at AWB

Skewering Col Allan on Channel Nine's Sunday program

Defending free speech at Manningham

At the Manningham Council meeting held on Tuesday, November 29, 2011, the following motion by Cr Graeme Macmillan was approved 6-3:


(A) Manningham City Council investigates ceasing including electronic recordings of Council Meetings on its website from the first Council meeting of 2012 onwards, and restricts access of such recordings to Council's internal records.

(B) Manningham City Council investigates introducing bylaws and penalties prohibiting Councillors publishing materials, whether in electronic, print or verbal format, that is critical of their fellow Councillors.

Page 5606 of the minutes show that our Liberal mayor Geoff Gough, Green councillor David Ellis and myself were the only opponents. All three Labor Party councillors supported it, as did the three Koonung councillors.

I lodged a rescission motion the following morning which meant we repeated the debate at the next ordinary council meeting, held on December 13. This is something you only do if you believe new circumstances or information has come to light.

The rescission motion was ultimately successful 4-2, with Heidi Ward councillor Grace Lavella changing her position after a strong backlash from the community. Unfortunately, none of the 3 Koonung ward councillors were able to vote at the December 13 council meeting, due to various family or personal health issues.

Manningham motion promoting transparency and good governance

It was a relief to get this proposed clamp down on free speech taken off the table and hopes were high that a pro-governance and transparency motion that I'd first put up in November, but had been deferred, would be supported at the January 31 council meeting. I made some amendments to accommodate concerns raised previously, such as improving transparency of expense claims by senior officers and delaying the online disclosure of councillor expense claims until after this year's election.

The final amended motion went up as follows on January 31, 2012:

In the interests of improving governance and transparency at Manningham, council:

a. Notes that local government in Australia has a less rigorous accountability system than Federal and State parliaments courtesy of the lack of a formal Opposition to hold the executive and those in power to account.

b. Supports and celebrates the transparent features of local government in Victoria with regular public council meetings, few confidential items and officer reports and recommendations to councillors which are public and published online, thereby reducing the so-called "Cabinet in Confidence" secrecy provisions which afflict Federal and State parliaments in Australia.

Reaffirms its commitment to open democracy and free speech, including the ability of elected councillors to take contrary positions to officers and fellow councillors in public forums.

d. Supports MAV-facilitated Councillor Conduct Panels and the Municipal Inspector as the primary means by which sanction for breaches of Manningham's Code of Conduct be pursued.

e. Notes that placing audio recordings of council meetings on the council website improves accountability, increases community access to council deliberations and provides a more accurate record of public debate than media reports, councillor and officer recollections, third hand accounts and the formal council minutes.

f. Commits to improve the level of disclosure around councillor expense claims by publishing itemised data for individual councillors on a six monthly basis. The online disclosures, similar to what councils such as Hume, Melbourne, Moreland and Geelong have introduced, will commence in the 2012-13 financial year with the first disclosure to be published in the first quarter of calendar 2012.

g. Commits to introducing a system of greater accountability of expense claims and credit card usage by members of the Executive Management Team through the provision of the relevant claims data to the audit committee on a six monthly basis commencing in 2012-13. The data is to be included in the audit committee minutes.

Sadly, these words were orally opposed by Greens councillor David Ellis, who used humour to suggest it was a motherhood opinion piece that should be published in Crikey rather than approved by Council.

And after I'd explained that the proposed officer expenses disclosure model was already operating in Melton, this was dismissed amidst much mirth as "something discovered in a back paddock in Melton".

Cr Ellis normally supports my governance moves so his strong opposition and mockery was a green light for everyone else to get stuck in.

The most disappointing contribution came from our Liberal mayor Geoff Gough who claimed some of the facts were wrong, it was policy on the fly, none of these measures had previously been discussed or analysed and such a move could "come back and bite councillors".

This was garbage at a range of levels and the mayor's stridency was so over the top that Cr Ellis eventually voted in favour when it came to the division. Sadly, the only other supporter was Labor's Cr Ivan Reid who appreciated the amendment which brought in some officer expenses scrutiny, something he and fellow Labor councillor Meg Downie had raised every time the question of disclosing their own expenses came up.

Overall, it was a great disappointing to see the broad governance and transparency motion defeated 5-3 and you can listen to the lively debate here.

Once a motion is defeated, you can't return to the topic for three months but I will be having one last crack at getting expense claim disclosure over the line before the October 27 election.

Incidentally, I'll probably be exiting the political scene in Manningham and instead running for Melbourne City Council an an independent councillor (not Lord Mayor candidate) come October, but there'll be plenty of time to write about that in future editions.

Will Mornington take the plunge and publish recordings of council meetings?

This opinion piece by David Harrison, a retired journalist from The Age, has been submitted to a local paper in Mornington as councillors resist an obvious governance move.

Recording of council meetings has suddenly become a high-profile issue down at the Rosebud shire bunker and neither councillors nor staff appear too happy about it. But the matter is not going to go away.

A second request to record was made at the February 13 meeting, this time by Mr Joe Lenzo of Safety Beach. The first request was made on January 31, by this writer. Before that I had written to then mayor Cr Graham Pittock seeking permission to record meetings.

The matter is imminent – a report is due to councillors in March.

Requests one and two were knocked back by councillors after brief but impassioned and, one must say, pretty much top-of-the-head, uninformed and/or prejudiced discussion.

The council has a policy under which anyone can ask to record by electronic means all or part of a council meeting. Councillors then discuss and rule on the request.

Many councils including Frankston already record meetings. Manningham Council posts the recordings online so people can listen at home at their leisure. Greater Dandenong streams its meetings live, in video, via its website.

Everyone already has the right to “record” a council meeting, down to the last syllable – employing the 19th-century invention called shorthand, although forms of speed writing go back to ancient times. Journalists have for well over a century been taking down court proceedings, parliaments, council meetings and other public forums using Pitman, Dacomb, Gregg – take your pick.

Modern electronic recording devices have taken over because they make reliable, verifiable and accurate records. Notice the forest of them thrust at politicians whenever they open their mouths.

Mornington Peninsula Shire is still in the horse and buggy era. Not until late last year was real thought given to electronic recordings, it seems. Not until recently have councillors considered the matter closely. The debate has just started.

Meantime, the press and other interested parties must rely on their shorthand skills, since unforgiving deadlines require instant access to what was said at a meeting. This reliance can lead to avoidable inaccuracy, which surely the shire would want to help eliminate.

Writing shorthand is arduous work, which is why parliamentary and court reporters work in short bursts using shorthand machines. Many reporters have imperfect shorthand: it is a tool that must be kept sharp, and rarely is.

The recording policy report heading councillors' way is crucial both to the present and the future. It is vital that councillors put aside any fears and prejudices and discuss the proposal with open minds, as presumably councillors in other municipalities did before deciding to allow recording.

They must consider that:

* Minutes of council meetings are a primary source for historians. If they are incorrect or inadequate, so is the district's history.

* The shire's “formal” minutes – who moved and who seconded – are skeletal at best. They include much officer input such as reports and other shire documentation, but generally do not even reveal how individual councillors voted. This is a shame.

* Not a word of the councillors' discussion and debate is recorded for posterity. This is an even greater shame: only shire officers are “heard” in the minutes.

* A recording would guarantee that the formal minutes were accurate.

* Formal minutes could still be made as a summary of a meeting, with the entire, unedited, recording available to historians and others who want more.

* Such a recording brings council minutes to life – Manningham ratepayers and historians can listen to councillors they will probably never meet, speaking in the cut and thrust of verbal battle with passion, with wit, with careful logic or in abysmal ignorance, on important issues.

If councillors allow electronic recording, just who should be permitted to record? Just the shire? The Press? Anyone? Without doubt it should be the latter: all that is being conferred is permission for people to do more efficiently and accurately what they have the right to do now.

The shire, clearly concerned about how council proceedings are preserved, will most likely recommend that it, and only it, can record meetings and that it, and only it, can decide what will be released to the public, and when.

Will that be directly after the meeting? Next day? Next week? Unedited? Expurgated? Many await the shire recommendation eagerly to see how it argues it case and thus reveals how open and transparent it is prepared to be.

The councillors, who will rule on all these important issues, have much to weigh up, for this council and into the future.

Gradual governance improvements at Manningham

The battle to lift governance standards and transparency at Manningham has been a brick by brick affair over the past three years but the following changes have been implemented:

Audit committee: moved to majority of independent members and an independent chair against old system with 3 of each and the mayor as chair.

Ward grants: abolished so individual councillors can no longer dish our cash to favoured groups with little process rigour.

Recordings of council meetings: now up on the web within three days of each council meeting.

Questions from the public: rather than making punters wait until the end of council meetings to submit written questions, we now have an additional session of oral, unscripted questions at the start of each council meeting.

VCAT record on website: Manningham's home page now includes a link to all VCAT decisions so residents, developers and objectors can see council's batting record on planning disputes.

Improved disclosure of council rental arrangements

Whilst taking the plunge on officer and councillor expenses transparency was defeated on January 31, the same meeting saw a "governance dividend" plucked from the wreckage of a messy process around the leasing arrangements at our new $38 million MC2 civic hub.

Our last missive on December 31 detailed a defamation settlement with CCSSCI, the not-for-profit nursing home operator and aged care service provider which is still chaired by our former deputy mayor Fred Chuah.

Given Fred was deputy mayor at the time CCSSCI was first mooted as an MC2 tenant, it was most regrettable that council did not conduct an expression of interest process for the subsidised rental deals which will deliver $250,000 of ratepayer dollars to CCSSCI in the new building, scheduled to open in August this year.

I explained in the chamber that this was broadly the same figure which CCSSCI spent suing myself and Cr Ellis for comments made about the proposed tripling of CCSSCI's nursing home in our green wedge zone, where nursing homes are prohibited.

The EOI should have happened because these were the biggest rental subsidies in the history of Manningham and big dollars were flowing to a group chaired by our then deputy mayor.

I ended up speaking in favour of the rental arrangements but blasted myself for not insisting council take the governance high road back in 2009 when these related party transactions were first proposed.

Cr Ellis was the only person who spoke and voted against the proposal, but the governance dividend which flowed was the unanimous vote in favour of this supplementary motion which I put up:

"That from July 2012 and each July thereafter, Council publishes on its web-site details of community group tenancies in Council properties showing the tenant, sub-tenants, term of the arrangement, rental values and any special condition applicable to each arrangement"

All councils have controversies over rental subsidies but I'm not aware of anyone else who will so comprehensively disclose the various deals that are done.

Labor councillor Meg Downie has complained long and hard about what she alleges are favourable rental arrangements for the Bulleen Boomers, Australia's most successful suburban basketball club, so it will be good that from July this year she and the community will now be able to see the favourable arrangements that dozens of other sporting clubs enjoy in Manningham.

Donate to help keep us going

The Mayne Report has wracked up losses of more than $300,000 since we launched in October 2007 and we moved to a free model in June 2009 after struggling along seeking subscriptions for the first 21 months.

It has been nice to receive more than $20,000 worth of donations over the past two years and if you fancy giving us a hand to help fund our activism and keep us going on the political and AGM circuit, just click on the image below:

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Changes at 774 and Crikey contributions for 2012

It was fun to spend a few minutes on Lindy Burns' last 774 ABC Melbourne Drive show with Crikey editor Sophie Black back in December.

Lindy has done a great job on Drive over the past 6 years and has moved to the Evening shift. After 12 years and about 500 appearances with Lindy and Virginia Trioli since 2000, I'll be staying with new Drive host Rafael Epstein in 2012 and have moved to a weekly spot at 5.35pm each Thursday.

The first three spots with Raf have been enjoyable but I won't be doing this week courtesy of a memoir presentation down at Red Hill on Thursday afternoon.

Sophie has been a strong Crikey editor since Jonathan Green left for The Drum a couple of years back and I've been more than happy to work with her. The work rate rose marginally in 2011 with 71 Crikey articles, up from 64 in 2010 and just 50 in 2009.

The favourite Crikey story last year, including the 57 comments, was this piece about Andrew Bolt, David Marr, lies and homophobia.

Meanwhile, here are links to all the Crikey contributions so far this year:

Questions abound about Lachlan Murdoch's role at News Ltd
Crikey, Monday, February 13

Rupert skips conference call grilling from analysts, hacks

Crikey, Thursday, February 9

Andrew Bolt and Mark Day reveal how Lachlan Murdoch is breaching cross-media laws

Crikey, Wednesday, February 8

Rupert should Tweet about Sir Rod Eddington's controversial gong
Crikey, Monday, February 6

Mayne vs Kevin Andrews on the pokies
Crikey, Friday, February 3

Wrong time for Gina Rinehart to say "look at me"
Crikey, Thursday, February 2

Mayne: why pokies debate should focus on maximum hourly losses
Crikey, Thursday, January 19

Sydney heavies finally step up on pokies reform
Crikey, Friday, January 20

Gillard compensates ALP pokies clubs, industry says no conflict
Crikey, Monday, January 23

Burnie mayor Steve Kons gloats about boning his CEO

The Tasmanian Labor Party has a long history of producing colourful and aggressive politicians and I had a run in with one of them, former deputy premier Steve Kons, during a visit to Tasmania last October.

After getting off the Spirit of Tasmania at Devonport, I was struck to see the sort of coverage that Kons was generating in The Burnie Advocate after he was elected mayor of Burnie.

Having run a highly aggressive campaign against Burnie's general manager from the backbench, mayor Kons was seen posing in front of the Paul Arnold's office asking questions like: "is anybody home?".

Given that Kons himself was caught up in controversy with the shreddergate scandal - which led to what his local paper described as the proverbial "resigned in disgrace" - I was more than happy to step up and defend the general manager, especially after concerns were expressed to me by some council officers that an elected mayor was running a public campaign against his own general manager.

The result was this public stoush with Mr Kons on ABC Hobart, during which he claimed I was "the biggest corporate bully in Australia".

Once this was all published in our last missive on December 31, Mayor Kons sent me the following email:

Hi Stephen

You may recall the rubbish you said about me on ABC radio Tasmania a few months ago.

Thought I would just inform you the General Manger of Burnie City Council is gone as is the former Mayor. Ha Ha!!!!

A true victory for the people of Burnie.

Why don't you recruit both to be directors of your companies?

Amongst the three of you you could make idiotic comments about how good you all are.

Next time butt out of our local politics and continue to pat yourself on the back for the star you really think you are.

Steven Kons
Mayor of Burnie

I've learnt over the years to avoid email slanging matches with people you've never met and responded by email with the following:

Hi Steve, thanks for the feedback.

Did you have to give Mr Arnold much of a payout?

Best wishes, Stephen Mayne

To which Mayor Kons replied:

Below industry standard.

Our Melbourne lawyers said it was a good deal for council and by the time we recruit a new one the savings will be greater than the outgoings.

Steve Kons

Talking gigs aplenty in 2012

2011 was an extremely busy year on the talk circuit with a record 48 gigs.

The favourite was without doubt the Intelligence Squared Debate at the Sydney Opera House, teaming up with Bob Brown and Mona Eltahawy on the question of media ethics.

We ended up losing to Julian Burnside, Hamish McDonald and the BBC's Kate Adie but it was a lot of run and even generated this big spray by Peter Costello's father-in-law, Peter Coleman, in The Australian Spectator.

The edited package of the debate, which was broadcast on the ABC and BBC World, has only recently become available online, so check it out here.

The first big speaking gig of 2012 was on Friday at Crown where 350 property types turned up for a panel debate involving Mark Korda, Prof Ian Harper, ISPT CEO Daryl Browning and myself.

Korda did well to even make it having only just been appointed administrator of Air Australia.

Then again, his firm does have 380 staff and Air Australia only has 5 planes so it was an issue his Brisbane office could deal with. After doing about 10 radio interviews, Mr Korda turned off his phone and came to Crown to do some economic star gazing.

His insights were very interesting. Apparently the Gold Coast is the epi-centre of the apartment glut with a truckload of pre-sales failing to settle, leading to administrators being appointed to look after various projects.

He also reckons Richmond will be overbuilt with apartments, especially around Victoria Gardens. No wonder the City of Yarra has been keen to get the Doncaster Rail feasibility study to examine which routes which go past Victoria Gardens.

Finally, click here to read feedback after some speeches and click on the image below if you fancy an engagement as the talk circuit helps keep The Mayne Report afloat:

Another lively batch of tweets

Click on the image above to join more than 8400 followers on Twitter as we are regularly dropping out observations about journalism, politics, breaking stories, local government and shareholder activism. Below is the text of some tweets since the last edition:

Some recent tweets with useful links

Three months ago, ANZ CEO Mike Smith had lunch with Rupert Murdoch in the Herald Sun board room. Now, he cops this:

Why doesn't our MEAA show solidarity with the NUJ and get on board this Neville Thurlbeck push to unionise The Sun:

Geoffrey Robertson QC working on case representing Sun journos against News Corp. Too good!!. See:

This Peter Hartcher piece in The SMH was the best summary of the Rudd comeback to date:

Key Rudd media backers appear to be The OZ, Daily Tele, Laurie Oakes and SMH's Peter Hartcher. Can't detect too many overt Gillard backers.

So, the 1st thing Lachlan Murdoch does after being appointed chairman of Ten is fly to London to be with dad. See NYT:

Interesting tactics by Murdochs for Rupert and Lachlan to tour Sun newsroom and leak pictures/staff message to AP. See:

Should bill Rupert for free advice. As recommended here, he flew to London and confirmed launch of Sunday Sun:

The Weekend Australian's six different page one stories tagged "exclusive" today must surely be a world record in the history of newspapers.

SP Ausnet's Brunswick electricity terminal investment has exploded from $70m to $271m in 2 years thanks to accommodating residential amenity

Surprised mainstream have missed this dramatic intervention by Vic Planning Minister Matthew Guy on behalf of Sing Inc:

A tale of two cities. Westfield Bondi Junct sales down 4% in 2011, Westfield Doncaster up 3.4%. These are "signature" centres in Syd & Melb.

Oh dear, Sydney-based AFR today declared that Westfield Fountaingate (aka Kath n Kim territory) was in Preston. Only about 30kms away.

Good Power profile on Sue Cato. My fave Cato line was claimed "late rush" for the 1998 Olympic Stadium float. It tanked:

Up Bendigo about to give a speech to local branch of Australian Shareholders' Association at yet another pokies venue. Sigh.

All the pretenders to Gillard's throne were performing in Question Time today. Self-obsessed Bill Shorten was easily the least impressive.

122 comments up until midday on this comment piece for The Drum about Rupert and The Sun. Very lively stuff. See:

Happy Valentine's Day and happy 12th birthday to It all began back on Feb 14, 2000, at the very top of the dotcom boom.

Here is audio from 10min interview about Macquarie Bank on Radio National with Geraldine Doogue on Saturday Extra:

Paul Bendat's excellent account of our anti-pokies/Centrebet push at last Thursday's St Kilda Football Club AGM. See:

Millner family are a disgrace for geeing up Gary Weiss for Perpetual board shake up just because Perpetual stood for Soull Patts board.

Network Ten should disclose precisely how much Lachlan Murdoch will be paid as chairman, pay cut for deposed chairman and other Illyria fees

Now that Lachlan Murdoch has been appointed chair of Network Ten he is even more in breach of cross media laws and must quit News Corp board

Am dressed head to toe RM Williams, owned by News Corp veteran Ken Cowley, for 6hr photo shoot for cover of the memoir. Long day ahead.

News Corp CFO David Devoe said "vast majority" of $US150m drop in UK newspaper profit is lost income from closing NOTW on high cost base.

News Corp earnings call wraps up after 52 minutes. Disappointing they called for a final (7th) journo question and were met with silence.

Rupert's obsession with Education business will generate >$75m loss this year. Analyst said puzzled. Guru Joel Klein distracted by hacking.

Chase Carey says News Ltd will suffer "significant decline" in profit this year, hence management change and "significant restructuring".

Even after $US5bn buy back, Chase Carey says News Corp balance sheet will be "overly liquid". Currently capped at $52b with net debt of $6b

Home from Saints AGM. Huge day! Doing ABC News brekky on Murdoch in studio in morn. Here is ABC Tas audio on Gunns:

Coles boss Ian McLoud sounded quite defiant when asked to defend St Kilda and Coles pokies division at this AFL AGM.

Paul Bendat and I asked Saints board some strong pokies questions at AGM. Then a member got up and said her mum lost $1m on pokies.

Saints President Greg Westaway has blocked questions on the accounts and director elections so far. He protected Coles boss Ian McLoud.

More trouble at Darebin

Further to issues raised in our last missive about ALP factionalism and developer connections at the City of Darebin, Mayor Steven Tsitas unleashed a furious attack on the press attending the council meeting on February 6. His response was directed at the Melbourne Times for daring to publish a story headlined Darebin Green Leads Move for Openness on January 31.

Neither the mayor or his main political sponsor, Cr Diana Asmar, were clearly identified in the article as having in effect supported eight storeys in a five storey zone for the benefit of one applicant, so one wonders why the attack on the press was necessary?

Meanwhile, the ALP Right councillors continues to come under great pressure to explain the high rise approval at 1 Bent Street in Northcote.

It is clear that the applicant for the 1 Bent street application was not just an ALP member but a long standing one in the same ALP Branch as deputy mayor Asmar, who did the right thing in declaring a conflict. In this same branch is the whole Kairouz family, including upper house member and Diana's uncle Nazih El Asmar. Also in the ALP High Street Branch you will find Martin Ferguson's electoral officer Heam El Asmar.

With memberships dating back to 1998 it is clear that deputy mayor Asmar must know the applicant, C Kairouz, quite well.

Other applicants in Darebin have not been treated so well by council. For instance, a developer applied to build on the old Windsor Smith site but had an 8 storey application in a 5 storey zone rejected.

This application was next door to Martin Ferguson's electorate office and he was vocal objector - making comments in the paper, hosting objectors meetings in his office and resourcing the objectors.

Yet when an application is made for 8 storeys in a 5 storey zone by associates of a well known Labor family, the federal member for Batman falls silent. So too is the ALP state member for Northcote, Fiona Richardson, who employs the wife of Mayor Tsitas as an electorate officer. Cr Asmar's husband, David Asmar, is a staffer for ALP Right faction heavy Steve Conroy.

By voting for an application 3 storeys higher than their own structure plan the 'Bent Street 5' councillors, all of whom hail from the ALP Right, now must approve similiar applications if they wish to to appear consistent.

This means inflicting massive development on Northcote in the lead up to council elections in October this year.

If, however, they bend to community feeling and return to applying the height limits that have been set down in the structure plan then questions will be asked about what was going on in Bent Street.

The extra 40 units that council decision delivered to this applicant is extimated to be worth $3 million as a land and permit sale only and up to $6 million in extra profit when fully developed.

I'm still puzzled as to why the community objections and existing structure plan was ignored, although the best argument is clearly an officer recommendation to that effect. (This corrects an earlier version of this edition which said the officers opposed the development).

Mayor Tsitas or deputy mayor Asmar are welcome to submit a response for publication in our next edition.

From the member edition archive

The Mayne Report goes to almost 15,000 people but if you're a relatively new reader, here are links to some of the more interesting email editions sent out over the past year:

Murdoch special, media inquiry, pokies, Manningham, Zara, secretive councillors, Vodafone and then some
Thursday, September 15, 2011

Bumper August edition: Bolt, Gillard, pokies, Murdoch, Gunns, unions, ASA, Manningham and Woolies
Tuesday, August 30, 2011

Special email edition to News Corp analysts ahead of earnings conference call
Wednesday, August 10, 2011

One last trip to New York for Rupert AGM
Tuesday, July 19, 2011

Murdoch, hacking, councillor conduct, ASA, ranking Queensland councillors, Richo and capital raisings
Friday, July 8, 2011

Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011

Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011

Council super slug, rate rises, Woodside AGM, lost $1000 bet, pokies article and then some
Wednesday, April 27, 2011

Rio, Santos and ASA board tilts, councillor misconduct, David Clarke, Woolies, pokies, Rich List, capital raisings and Murdoch
Tuesday, April 19, 2011

Mark McInnes, Hanson, Boomers, Manningham, MAV elections, defamation, expense claims and conflicts of interest
Friday, March 25, 2011

Bumper March monthly edition: sued, Rio, Packer, MAV, Cornwall, Rich List, Westfield, AGMs and much more
Monday, March 7, 2011

Meetings chairmen, Fairfax, Murdoch, pokies, VLGA, Santos, Alumina, Rich List, SPPs, Manningham and staffers
Monday, February 7, 2011

That's all for now.

Do ya best, Stephen Mayne

* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.