ga('send', 'pageview');
John Passant

Site menu:

April 2019
M T W T F S S
« Mar   May »
1234567
891011121314
15161718192021
22232425262728
2930  

Tags

Archives

RSS Oz House

Share

Authors

Subscribe to us

Get new blog posts delivered to your inbox.


RSS Blog RSS

Site search

Miniposts

Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

Advertisement

Links:

Day 13 of the election campaign – watering down the Pub Test

Photo courtesy of The New Daily

It looks as if the government is in a bit of hot water thanks to Barnaby Joyce. If you listen to Barnaby explain the water buy back issue, the problem was and is not him but ‘Labor, Labor, Labor, Labor, Labor. ‘

The government has a water buy-back scheme to help save the Murray-Darling Basin. It buys water (entitlements) from agriculturalists to supposedly allow more water to flow in the river systems. It was set up after a commitment by John Howard in 2007. The new Labor government also implemented a version.

In 2017, when Joyce was Minister for Agriculture, he authorised the government purchase of water for almost $80 million from a company called Eastern Australia Agriculture. EAA was at the time owned by Eastern Australia Irrigation, a company registered in the Cayman Islands.

Now, let’s begin to deconstruct this. By the way, deconstruct is a fancy academic word for doing the pub test. Would the story stand up to scrutiny from drinkers at your local?

As someone who until ten years ago frequented too many pubs too often, I reckon (note the good scientific language) the pub test is a valid way to determine what ordinary working Australians are thinking.

On that score, I reckon – more science! – this water buy back is likely to be a real problem for the Coalition government all the way to polling day. Not to put too fine a point on this, the deal stinks to high heaven and would fail the pub test in any hotel or club in the land.

As I mentioned Eastern Australia Agriculture was, until January this year, wholly owned by Eastern Australia Irrigation, a company registered in the Cayman Islands. For those who do not know, the Cayman Islands is a tax haven. Why is it set up there, and not in Australia? Could it be to avoid Australian tax? If so, was it successful in avoiding tax on the $80 million it received for selling its water to our Government, or more accurately the $52 million gain EAA made on the sale?

Michael West has an interesting analysis based on what appears to be some good investigations into this issue. He says, among other things:

“Foreign companies often give loans to their associated companies in Australia. The interest on the loans goes offshore before tax. There was $15 million in interest on loans to EAA’s Cayman parent company EAI and $30.4 million in convertible note payments. That gets us to $45.4 million, pretty close to the $43 million identified before (in possible profit distributions in the relevant year); the difference may come down to currency. “

Eastern Australia Agriculture, an Australian company, and its then owner, Eastern Australia Irrigation, a Cayman Islands company, should release details of their tax situation, including tax paid in Australia. Then we, the Australian public, would be in a position to judge the nature of the arrangements and the amount of tax paid in Australia on the profits arising from the purchase by the Australian government of Australian water from an Australian company, an Australian company which just happened to be wholly owned by a Cayman Islands’ company.

There are many other questions. Before entering into politics, Angus Taylor, now the Energy Minister in the Morrison government, set up EEA and EAI. As he says:

‘Minister Taylor concluded all association with EAA and related companies prior to entering the Parliament. He received no benefit from this transaction.’

One question for Mr Taylor might be, why the Cayman Islands? And who are the shareholders in EAI? One important point about tax havens is the secrecy they provide to their companies, the owners and other ‘taxpayers’. It may be Taylor does not know. In the interests of transparency, he should tell us what he knows about the companies and their arrangements. The pub test demands it.

Anne Davies in The Guardian gives a glimpse of Taylor’s early involvement. She says:

‘EAA’s ultimate holding company between 2008 until the time of the water sale was Eastern Australia Irrigation, which is domiciled in the Cayman Islands. Its shareholders were reported to be a number of major investment funds based in Hong Kong and the UK. The early directors of EAA included Angus Taylor, who is now the energy minister, but who was at that time was an investment banker specialising in agriculture investments. He has described himself as a co-founder of Eastern Australia Irrigation in his parliamentary biography. Asic records show he was a director from mid 2008 to late 2009.’

Then there is the price paid for the water – $79 million. Under Labor, and for the first year or two of the Abbott government, the buying and selling of water was done under an open tender process. That changed in 2015, under then Minister Barnaby Joyce.

According to Anne Davies:

‘an exception in the government procurement guidelines … allows the government to avoid an open tender if the purchase amounts to “exceptionally advantageous conditions” for the government to acquire the asset. ‘

She also says:

‘Joyce announced he would no longer hold tenders because of what he said was the damage the program was doing to farming communities. When water is bought it can lead to irrigators closing down and the loss of jobs.’

There are doubts that the $79 million was value for money. The Commonwealth may have overpaid for the water. As Michelle Grattan in The Conversation reports:

‘Water expert Quentin Grafton, professor of economics at the Crawford School at the Australian National University, lays out the issues. Grafton estimates the Commonwealth paid about $40 million too much for this water. He identifies three areas of concern: the government’s failure to get value for money (remembering this was floodwater, which is unreliable); the lack of transparency in the deal, and the nature of the process – a negotiated sale rather than an open tender.’

To add to this rotting corpse of crap is the fact that EAA gave $55000 to the Liberals in 2013 to support their election campaign.

None of these inconvenient facts mean there is any wrongdoing. They do suggest an inquiry is needed to get to the bottom of what happened. ICAC anyone? A Commission of Enquiry (Labor’s approach)?? A Royal Commission?

Hang on. South Australia had a Royal Commission into the Murray-Darling Basin. Other than written submissions, the Commonwealth basically refused to cooperate.

I have a novel suggestion. How about politicians be open with voters?

This scandal is likely to haunt the government all the way to the election on 18 May. This is not just because it is fails the pub test and nothing the Government does, including asking the Auditor General to investigate all buy backs since 2008, will remove the smell in the room by the time election arrives.

More importantly, the affair just reinforces in many voters minds a truth they have already arrived at – you cannot trust politicians. Given this is a government scandal, that feeling is likely to weigh on some voters minds when considering voting for the Liberals, the Nationals or their bastard child, the Liberal National Party.

Many voters already have major concerns about the environment, water, the Murray-Darling Basin and the like. This will only reinforce their concerns.

It doesn’t mean Labor will benefit. It may be some voters will pick other fakes like Clive Palmer or Pauline Hanson, and then slink back to the Coalition. It may also be that they will then preference labor. Who knows?

Certainly the government is keen to get Clive ‘I don’t pay back my workers‘ Palmer on their side in any preference deal. It could even, god forbid, save this rotten government.

When you vote, just remember that this water scandal is a typical example of how many bourgeois politicians want to hide information from us. To be honest with us is, they fear, to sign their political death warrant. Democracy anyone?

John Passant is a member of the Canberra Press Gallery. Mainstream and other media should contact him to discuss his rates for republishing this or publishing other articles.

Advertisement