We haven’t heard too much from the Government about John Hewson’s Ferrari recently. Nor will we between now and the election. The Prime Minister, Paul Keating, likes to be the champion of the battler, the worker, the down and out. He has portrayed the Labor Government as the helper of those who cannot help himself.
Until four months ago, Mr Keating made much of Dr Hewson’s wealth, especially his Ferrari. He can no longer do that because Mr Keating is himself a millionaire, four times over. At least on paper. So the moment he makes a personal attack about Dr Hewson’s wealth, he will invite an attack in response. That will not stop colourful personal references of other kinds, because they are an important part of Mr Keating’s political armoury, and he is very good at it. His line this week that Dr Hewson, the “”flim-flam” man, only “”discovered his heart when he discovered fear in it” was a gem.
But there was no contrasting the Ferrari-owning of the Opposition Leader with the plight of the clients of the Australian Council of Social Service. That would be dangerous ground.
Mr Keating’s millions came quickly, through his family company’s investment in a piggery. When one looks at the accounts of Euphron Pty Ltd (half owned by Mr Keating and his family company), Mr Keating is worth some $4.2 million. That is perhaps as much as Dr Hewson. This was made on an investment of $430,000 within the same financial year. That’s a pretty good result, especially in a rural recession.
Mr Keating has said on television that his family company is not worth as much as that. The trouble with that stand is that Mr Keating cannot have it both ways. He cannot deny the millions without admitting that the accounts are wrong. And once you admit the accounts are wrong (not just technically, but substantially) you have to ask why.
To date, Mr Keating has led a fairly charmed life on questions over the piggery. Part of this is due to the Opposition’s tactical ineptitude. Part is due to the groupthink in the parliamentary Press Gallery.
The Opposition has left the running on the issue to its spokesman on the arts, Senator Michael Baume. Senator Baume used to be with Patrick Partners and worked as a journalist with the Australian Financial Review. He has some understanding of company finance and has access to people with a lot of knowledge about it.
Unfortunately for the Opposition, he also has a reputation, rightly or wrongly, as a muck-raker.
The gallery loves a good muck rake. It loves a leader in trouble. But Paul Keating knows how the Gallery works better than most. Senator Baume said in Parliament that Mr Keating and his office had telephoned editors and journalists abusing them for touching the story. Journalists hate a hard time with their editor. If you yell at the editor the editor demands answers to questions from the journalist. Fine. But the journalist feels uncomfortable, even if the questions are satisfactorily answered. Also, journalists, like everyone else, do not like being yelled at. All of a sudden the story gets too hard.
It verges on the too hard anyway because to run it properly you have to wade through the returns and accounts of half a dozen companies and you have to have some understanding of company law. A journalist’s attitude to that is to get someone else to do the hard yakka and publish what they say.
The trouble here is that the someone is Michael Baume whose reputation among many journalists in the Press Gallery is that he is a muck-raker and stirrer, so his questions, they think, can be dismissed, the more because the Opposition’s first foray into the pigs misfired. They hinted at something which simply could not be demonstrated. They hinted in questions in the Senate and a Senate committee hearings that the Prime Minister somehow used his position to secure an easier quarantine path for the piggery’s desire to import Danish pigs and Danish pig semen as part of a proposed (now realised) $80 joint venture. But there was no evidence that anything of the kind occurred.
So the next series of assertions over the accounts were rightly treated with some scepticism. From the state of the clippings of the main metro dailies, it appears that the Gallery has collectively decided that it is a non-story. Few if any appear prepared to wade through these accounts to see if Senator Baume’s case has merit. Further, the Gallery now thinks that that the story is old hat. Nothing could be as fatal for a news story.
But it is only old hat to those who sit in Parliament each day and hear questions on the piggery and they hear the same answers. The answers have never gone to the substance of the question but all said this is muck-raking, this should be asked in the House of Representatives. A journalist hearing that for the 19th time, would say this is a non-story. However, in voterland they know virtually nothing of the piggery, because it has not been published properly in the first place. It has been down the back of the paper, not run at all, or on the isolated occasion when it was run in substantial detail, ran on days when the US went into Somalia, Hewson announced Fightback changes or Chuck and Di were separating.
Judging by the clippings of the metro dailies, the broad mass of the Australian electorate simply do not know that Mr Keating owns $4.2 million worth of equity in a piggery holding company. They certainly have no idea how that came about. More of that anon.
Mr Keating is not a director of any of the group’s companies and is therefore not responsible for the accounts. However, as Senator Baume has pointed out, his nominee, Chris Coudounaris, is a director. Moreover, as a half shareholder Mr Keating, if he choose to do so, could have a significant say in the running of the company.
Mr Coudounaris decries the emphasis on the accounts. He says the joint venture will provide 200 jobs, bring top technology to Australia and help exports as the pork is being marketed in Asia. These are the very things Mr Keating has been talking about for the country’s salvation.
Senator Baume, however, keeps asking questions about the accounts. He keeps getting stonewalled. The Opposition prefers to ask its questions in the Senate where the Government does not have a majority. It also probably prefers not to engage Mr Keating himself on the issue because he is such a good parliamentary performer. Further, it appears that Dr Hewson would prefer to stay the clean statesman above the piggery issue just in case it falls flat.
The Liberal Party (believing in the liberal notions of free speech and so on) exercises far less discipline than the Labor Party, especially in the Senate where it still clings to the odd noting that senators represent states and should run their own game. Thus Senator Baume has run the case.
But after 19 questions and getting nowhere in the Senate, it is now surely time for Dr Hewson either to say to Senator Baume “Enough!” or to take the issue on in the Reps, especially, as Question Time this week might be the last chance before the election.
There are still unanswered questions. The accounts that Senator Baume persists asking about, to the unjustified yawns of journalists, are unsatisfactory and in breach of Australian Security Commission rules.
There are several reasons for insisting companies put certain material on the public record. Companies get the advantage of limited liability for debts. So if the company goes broke the shareholders are not individually called upon to make up any shortfall. In return, creditors (especially ordinary trade suppliers) are entitled to be able to get an accurate picture of a company’s financial health through the ASC files.
This is not fanciful or hypothetical. In this environment, trade suppliers regularly do ASC searches to check on the companies they deal with. The larger the company the greater the reporting requirements.
The trouble with the accounts presented by the companies half-owned by Mr Keating is that they portray a confused picture and a changing one. In particular, they are unaudited contrary to ASC requirements and revalue assets at directors’ say so without stating if independent valuations have been done. Further, they deal in a strange way with $4 million apparently owed to a company owned by the former Minister for Tourism, John Brown. It has appeared in returns as three different entities on three different occasions.
Without further explanation (which I have sought in vain from the company, and which Senator Baume has sought in Parliament), anyone looking at these accounts could conclude that Brown and Hatton Group has been made to look in better shape than it really is.
Mr Keating has said he has declared his interest at all appropriate times in relation to the piggery, and the record clearly supports him on that. However, some unsatisfactory elements remain. It is extraordinary that the Prime Minister’s and his family’s investment of $430,000 turned into $4.2 million in the same year’s accounts. If it is just wealth on paper, some proper answers must be given as to why it was done that way.
Further, though it is laudable for the Prime Minister to invest in a venture with great export potential, it is worrying that he should have a half share in a company which needs critical government approvals to be successful. (Foreign investment, perhaps quarantine, planning, pollution controls and so on.) If those approvals are not forthcoming, the Prime Minister’s personal wealth might be affected in a much more profound way than if he were a just a small shareholder in a large blue-chip company.
It puts officials in an unnecessarily difficult position.
No doubt proper and reasonable explanations can be given for the matters raised by Senator Baume. It is time they were put directly to Mr Keating in the House of Representatives. Mr Keating should clear the air by asking the companies he has a half share in to provide explanations. With that level of shareholding with that amount of money involved, a man holding his high office cannot hid behind the corporate veil and say that these are solely matters for directors.