National Anti-poverty week sees the richest PM in Australian history explaining his investments while his predecessor is stressing now that his salary has been cruelly slashed from $539,338 to just $200k. How will he ever meet the mortgage payments on his Forestville home? Retirement is out of the question; it would only bring him $307, 542 for life. Perhaps his mate Malcolm, lustily singing his praises as our deliverer to NSW Liberals and to the House only recently, could help out. PM number 29, aka that smartarse millionaire bastard, Turnbull, certainly has all the answers.
Turnbull defends his own use of Cayman Islands’ Ugland House, a five storeyed office building in George Town, Great Cayman, the registered address of several of his family investment trusts. Others do it, he says, even Shorten’s unions. 18,856 other businesses and funds, in fact, use the address. That’s enough to confuse any postie. Or, as Barack Obama said in 2008, ‘that must be one big building. Or one big scam’.
Of course, The Toff huffs loftily, it’s all legitimate. An honest to goodness, true-blue, Caymans fund, the PM assures the House, helps the Turnbulls to pay tax in Australia. He keeps a straight face while skewering Labor. It is sophistry they won’t hear from any other PM. Or want to. A civilised society works only if members who enjoy its benefits are also prepared to pay their share of the costs. It may help if you keep a few lawyers out of politics, too. Lower the bunkum level.
Rather than being a way of paying no or very little tax, their raison d’être and their irresistible appeal to vulture fund operators, the PM’s Cayman accounts help him pay tax. He says. A sceptical ATO, on the one hand, has previously pointed to US investors keeping money offshore indefinitely. Australian investors may do the same.
Turnbull does not divulge his rate of tax, be it zero, five, ten or twenty percent. Nor do we have any means of finding out, a situation which fuels speculation, perhaps none so bizarrely figurative as touring comedian Russell Brand who protests,
‘having your money in the Cayman Islands is like putting your dick into custard. We all want to do it, but there’s no rational reason to do it. If your dick’s in a bowl of custard you’re doing it for a reason.’
Caymans’ laws prevent even the ATO from finding out what tax whack Mal, who is also known as Tang Bao in China or ‘sweet custard bun’, is paying.’ Our own secrecy laws prohibit ATO officers divulging clients’ tax details. Quixotic Sam Dastyari and other ‘class envy party’ members risk looking impertinent, personal or just plain naff as they challenge Turnbull’s use of managed funds domiciled in a place called home by tax evaders, rock iguanas and red-footed boobies.
Dastyari knows that Cayman Island tax havens are legal but this does not prevent the PM or members of his media claque from repeating this irrelevance. Sam wants to know if their use is appropriate for a PM whose government promises to pursue companies ‘off-shoring’ or using tax havens to reduce their tax liabilities. Dastyari, alleges a conflict of interest at least if not the abuse of privilege and that by resorting to such elite services, Turnbull fails to lead by example.
Exclusive funds in the Turnbull portfolio such as the Zebedee Growth Fund, the Bowery Opportunity Fund and the 3G Natural Resources Offshore Fund are only for the well-heeled. Mum and Dad investors, don’t try this at home. They require a one million minimum investment from clients but can return them 20 per cent per annum.
Bowery, which targets distressed and bankrupt companies, boasts 21 per cent since 2009. The PM could invest $539,338 or just a year of his salary at this rate today and ten years later he would have roughly 3.5 million.
Turnbull personally has as much right as any other Australian to seek high returns, but as PM he should be leading the charge to unwind ‘off-shoring’. The PM is no ordinary investor. The Caymans are not ‘bog-standard’ investment houses, despite his protestations that even Aussie Super uses them. His deflects the Labor attack, however, like the barrister he was.
Turnbull accuses Labor of a personal smear campaign inspired by the politics of envy. On this front, he declares, wearily that his wealth is no secret. Nor is his ‘success’. Luck and virtuous hard work have made him a fortune. He bears it well.
‘The fact is that Lucy and I have been very fortunate in our lives. We have more wealth than most Australians, that is true. We’ve worked hard, we’ve paid our taxes, we’ve given back.’ The model taxpayer then dismisses out of hand all suggestion that he might disclose further tax details.
It is inconceivable, he implies, that his riches could ever cloud his judgement, impair his perspective or that his path to a Caymans account or three have been anything but virtuous even if those thousands of ordinary Australians who lost their savings in the collapse of HIH after it paid too much in its takeover of FAI might tell a different story. Of course he knows how ordinary Australians live. He uses public transport. Why, his friends include some … quite ordinary people.
In 1998,Turnbull, then chairman of Goldman Sachs Australia advised FAI Insurance on a $300 million takeover bid by HIH. The bank’s role and the advice it gave to FAI were key themes in a 2002 Royal Commission which failed to nail any wrong-doing although this did not prevent the HIH liquidator Tony McGrath, of McGrath Nicol & Partners from bringing his own legal action. In 2009, a confidential settlement by his former employer, spared Turnbull from appearing in court as a defendant in a private $450+ million lawsuit.
Nothing to see here, Turnbull reminds the House, he has no say in investment decisions made by his funds. Putting your wealth into blind trusts, where it may be invested in anything, anywhere, he makes appear responsible, ethical, the only proper course of action.
Turnbull’s example will doubtless inspire the 1 million to 1.5 million ordinary Australians who live in poverty, based on their access to necessary goods and services and social exclusion measures. The figure may be higher. The Australian Council of Social Service estimates that 2.55 million Australians live below the poverty line. These include 55 per cent of Newstart recipients. Even the Business Council of Australia wants to raise Newstart. But not a peep from Bun’s government, however, just a steely resolve to serve the interests of the rich.
The Turnbull government marks anti-poverty week by repealing a Labor measure that required private firms with revenue over $100 million a year to disclose their tax details. ‘The changes will restore the long-held general principle of fundamental rights of taxpayers’ privacy, including for Australian-owned private companies,’ inquiry chair and Liberal senator Sean Edwards says in his report, while Josh Frydenberg sees it as protective, claiming business owners fear publication could increase the risk of them being kidnapped and held for ransom. Doubtless Ugland House fund operators applaud his logic and would use his case themselves if they could get away with it.
The euphonious Ugland House is also financial home to another endangered species, a tiny mob of investors, pure as the driven snow, who, like our PM, are ‘lucky’ enough to rank amongst the one per cent of the world which now owns fifty percent of its wealth as Credit Suisse reports recently. And that one per cent may be declining. Surely, we must do all we can to protect this tiny minority. Certainly Greg Hunt, aka Hunt Greg for his recent backflip over renewables to suit his new boss, is helping us all to do our best.
Environment Minister Hunt is seen to press his lips to a violet-scented Turnbull ear-lobe before slipping out of question time under cover of Thursday’s fat-cat-calling. His government’s steamy, coal-seamy affair with Adani demands his personal attention. Minutes later, Hunt’s office announces Carmichael mine may go ahead.
It’s good news for cash-strapped international entrepreneurs, the Adani brothers, one of whom, at last count was down to his last 7 billion and whose shares are trading lower than the belly of an ornamental snake. Now, if only a bank will lend them some money, they will be able to go ahead with Australia’s biggest coal mine, and the coalition’s biggest economic and environmental disaster. If only one of the 14 major banks which have turned them down would ignore the inconvenient truth.
Our ‘agile’ 21st century government, naturally, prefers a different view. The Adani Carmichael mine, we are told, will produce only artisanal, hand-crafted ‘clean coal’, carried by reef-friendly, accident-proof ships with highly-paid, well-trained local Australian crews with the navigation system of a Mars landing. Nothing bad could possibly happen to the water table or the ecosystem of any living creature. Adani will bust a gut to pay loads of tax, as only a multi-national corporation can.
Unlike any other open-cut mine in history, Adani will be a big employer. Huge. Created will be at least one 21st century job for every Australian for life. All we need to do is help fund a proposed 16 billion coal-dedicated railway between Galilee Basin and Abbott Point’s expanded port facility, which is set to become the biggest coal terminal in the world, a nifty bit of engineering which Aussie battler Gina Rinehart and other ‘lifters’ diligently ‘growing the economy’ may also be able to use in a serendipitous stroke of pure good fortune on top of the billions of government subsidy we foist upon her.
But let’s not get too far down the track. Boyish Josh Frydenberg, Minister for resources, energy and Northern Australia and protecting corporate bosses from kidnap, is busting to take his new portfolio out for a spin, is a bit too quick off the blocks. Giving the rail an OK before Mal’s OK leads to a carpeting from his boss. Now Josh says – ‘just joshing – ‘it’s not a priority’, meaning we will pay for the rail when the fuss has died down a bit or the next Federal election is closer.
Dipping into the Northern Australia Infrastructure fund to turn may allow coalition fiscal wizards to misappropriate enough to enable the Adanis to build an unusable, ecologically irresponsible coal mine which no-one wants or needs and that neither the current market nor any future can bear in an industry which Goldman Sachs and others say is in structural decline. At worst it will be moth-balled immediately.
‘Hunt’s hole’, as it will be known, will however, serve as his government’s most fitting monument. A vast, useless pit, measuring 247,000 square kilometres and visible from space, it will warn even extra-terrestrials of the suicidal madness which seized the Neo-Cons of Oz, a maniacal abdication of reason more akin to nineteenth century Polynesian cargo cults than to any 21st century government with the very best available science and technology. If only our Easter Island leaders had taken heed. For those future politicians with macro-economic perspectives this is what a stranded asset looks like. For the rest of us a caution. Money talks. Unfortunately. But when money is doing all the talking, woe betide the rest of us.