Tuesday, 28 June 2016

The truth about Malcolm Turnbull's wealth

Malcolm Bligh Turnbull’s ‘truth’……

The rest of the world’s truth……

The Australian, 11 June 2016:

Last Sunday, Malcolm Turnbull sent out an email — Re: “My Dad” — inviting us all to reflect upon and share the story of his upbringing by his late father, Bruce. It was a deliberate decision by the Prime Minister to personalise the election campaign. The ­exercise was well calculated, but a couple of lines, about Bruce Turnbull in particular, were noticeably selective.

“We didn’t have much money. He was a hotel broker and for most of that time he was battling like a lot of people are — a lot of single parents are, certainly. He did well after a while. In the latter part of his life he kicked a few goals after a lot of effort …”

Malcolm Turnbull the politician has consistently downplayed his father’s success as a small businessman, and the substantial inheritance he received when Bruce died in a plane crash near Gloucester in 1982, age 56.

While researching my biography of the Prime Minister, Born to Rule, I spoke with old friends and business associates of Bruce. They remembered a fit man’s man, sharp witted and deal savvy. Many profiles over the years make the easy assumption that Malcolm Turnbull inherited his celebrated intelligence from his mother, the actor, writer and academic Coral Lansbury.
Having spoken to some of Bruce’s mates, I am not so sure.

Prestige property agent Bill Bridges, who has sold and resold many of Sydney’s best homes over a career spanning 50 years, was in a running club with Bruce that included Bruce Gyngell and NSW Supreme Court judge John Sackar. Bridges told me that “there was no one more streetwise than Bruce Turnbull, and that’s the best education you can get”.

Bruce Turnbull was a country boy and former electrician from Maitland, near Newcastle, who came to Sydney in his twenties. Bruce truly was self-made. He married Coral a year after Malcolm was born in 1954 and for the most part the couple lived in a flat on New South Head Road, Vaucluse, in Sydney’s salubrious eastern suburbs, which land title records show Bruce co-owned through a private company.

Young Malcolm lived here happily, walking to and from Vaucluse Public School. In 1963, he was sent to board at Sydney Grammar’s preparatory school at well-to-do but distant St Ives. What he would not have known is that his parents’ marriage was failing. Coral had fallen in love with another academic and she left Bruce suddenly, taking the furniture — and the cat — and moving to New Zealand, where she remarried.

This was undoubtedly a tough time for Bruce and his son. They moved out of the Vaucluse flat and into a series of rented flats — including one in Gladswood Gardens, a red-brick block in a dead-end street in Double Bay.

During the next five years, Bruce’s hotel business really hit its straps and by 1970, when Malcolm was in Year 10, he had bought a luxurious three-bedroom apartment in Point Piper — a stone’s throw from the waterfront mansion Malcolm Turnbull lives in now. The apartment had smashing water views and cost Bruce $36,000. Today it is worth millions. When not boarding at Randwick — where he moved once he reached high school — this was Malcolm’s base for most of the next decade.

Bruce added to his portfolio in the 1970s, buying a unit in Bellevue Hill and two houses in Randwick. He almost doubled his money on a slice of the historic Hermitage ­Estate in Vaucluse, which he sold within 18 months to a company owned by Kerry Packer, a powerful early ­patron to his son.

Malcolm, who worked as a journalist through his years of law study, inherited his ­father’s penchant for property investing, and started early: at age 23 he bought a semi-detached house in inner-Sydney Newtown for almost $50,000 and at age 25 he bought a Redfern terrace for $40,000. He sold both for tidy profits. Turnbull bought his own first home, for an undisclosed sum in Potts Point, after returning from his Rhodes scholarship at Oxford University and marrying Lucy Hughes.

Bruce Turnbull was semi-retired by 1982, when he laid down almost $600,000 to buy a stunning farm at Rossgole, near Scone, which Malcolm has since expanded and which ABC viewers have seen on Australian Story and Kitchen Cabinet.

It is difficult to get the full picture of Bruce’s estate because it was accumulated before property records were computerised, and pre-ASIC. But friends say he, like many a real estate agent, would keep the best hotel deals for himself and his partners, picking up watering holes in thirsty locations like St Marys in Sydney’s west, Warners Bay at Lake Macquarie, and Newcastle……

Malcolm was also a hotel ­licensee, and on top of all this was getting a steady income stream from a 10 per cent share of the earnings from his broking licence, which he had contracted out…..

A glowing 1988 magazine profile estimated Turnbull inherited about $2 million when his father died, which would be worth almost $7m in today’s dollars. To inherit such a sum at the age of 28 is a life-changing event in anyone’s language. Turnbull went on to make a motza, but people who knew both father and son well point out, “he inherited a motza, too”……

Certainly Turnbull carried some resentment at his father. A flash of insight comes from an unpublished screenplay about the 1986 Spycatcher trial, by Turnbull’s old friend the late Bob Ellis and Stephen Ramsay. The script was written with the creative collaboration of Malcolm. It is fascinating to read a section where Malcolm, talking to his wife during a low point in the trial, throws down his whisky glass in despair, smashing it, and tells Lucy:
Malcolm: I wish dad was alive.
Lucy: (alarmed by this) You hated him.
Malcolm: I know. (Getting up, punching the door) But I didn’t want him dead. Not so soon.

After his success in the Spycatcher case, Turnbull turned his back on his promising career in the law and used his inheritance to set up a cleaning company, Allcorp, with then recently resigned NSW premier Neville Wran. He also founded a merchant bank with Nicholas Whitlam, son of the former prime minister (both Packer and Larry Adler gave their financial backing for a short time).

Striking out on his own, Turnbull was hungry and savage. Packer famously said he would not like to come between the young Malcolm and a sack of gold. It was not the trappings of wealth he was chasing but the substance: the independence of not having to work for someone else and the security that comes with prime real estate.

Malcolm had his father’s nose for a deal. During the next 15 years, he made a fortune as a merchant banker, as an adviser to Fairfax, an investor in unbelievably risky ventures such as logging in the Solomon Islands and gold mining in Siberia, and as an early backer of OzEmail and shareholder and partner in Goldman Sachs, where he helped Rodney Adler sell doomed insurer FAI to HIH.

By 1999, Turnbull had debuted on the BRW Rich List with a fortune of $65m. After Goldman Sachs listed on the New York Stock Exchange the following year, Turnbull’s fortune was bumped up to $90m, and that was conservative. It has more than doubled since, mainly by appreciation. The building blocks were in place by 2001, when Turnbull turned his attention to politics.

Nowadays, people who know Turnbull say he wears his wealth rather like a hair shirt. The PM does not apologise for his success, but he goes close sometimes, acknowledging there are “taxi drivers that work harder than I did”.

The PM consistently downplays his father’s wealth and his inheritance because he wants to underline that he is a self-made man. This is a hot-button issue for voters: they respect someone who gets rich off their own effort, but not someone who inherits.

By any reckoning, Turnbull had unbelievable advantages. Reading through Twitter feed #MalcolmWasSoPoor gives a flavour of the cynicism surrounding Turnbull’s “battler” story. Could Turnbull have done it all without his inheritance? Given his abilities, connections and prodigious work ethic, almost certainly yes. But did he? No.

In 1957 when this article was published in The Sydney Morning Herald's Women's Section the average female annual income was £1,200 pounds a year. Malcolm's mother was earning over four times that income.

Prior to meeting Bruce Bligh Turnbull she had been the recipient of £9,000 a year (for life or until remarriage) from her late first husband's estate and, in November 1954 reached a lump-sum settlement of $3,100 in lieu of her interest in the the estate.

Malcolm's father would have had an annual income in 1957 that would probably never had fallen below average male earnings, so the combined household income would have been at least £8,700 to £9,700 a year.

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