Australian Right nailed by Rundle

The Saturday Newspaper, 26 March 2016:

The Australian right survives because it is supported by hothouse institutions: the loss-making parts of News Corp, oxymoronically named "think tanks", which take anonymous corporate money to lobby for their industries and then claim tax-deductible charitable status, and the cocooned political process that pipes wacko right-wing fantasists up from student politics through these think tanks and into the senate without encountering democracy at any point.

Such right politics thrives on fear, uncertainty and nostalgia. With a quarter-century of growth, we have very little of that, at least in the all-encompassing sense. The population has become not only more prosperous, but more progressive – values that were once the preserve of the smaller culture or knowledge-producer class are now general. Support for same-sex marriage and multi-ethnic life, alongside suspicion of Western military adventures and pro-choice abortion politics, are now spread among 70 per cent of the population. The conservative right has struggled to accept this. It believed that residual conservative values – for harsh immigration policies, for Anzac – suggested a silent conservative majority out there. They believed that Tony Abbott, rising to power on a promise of running Labor's programs while being not Labor, could then become a powerful author of the conservative rollback.

But Abbott failed because the conservative faultline runs through the man himself. Abbott is no Ted Cruz, a man forged in the heat of a great and confident national political tradition. He's a searching neurotic product of a convert Catholic family, deeply conflicted about the role ordained to him – "Tony will be pope or PM," parents and family said – expressing his European reactionary mindset, pre-1789, in the manner laid out by B. A. Santamaria in his last decades, as a politics of pessimism and noble failure. There was little attempt to create a coherent 21st-century right, as David Cameron has in Britain, and in its absence self-indulgence took over, as marked by the soap opera hysteria at the heart of it, recounted by Niki Savva. It may or may not be embellished in the telling, but who doubts its substance? People leading serious political revolutions don't get caught up in some mash-up of House of Cards and Gossip Girl. People for whom politics has ceased to provide a meaningful vocation do.

There was an emotional decadence at the heart of the Abbott government, a result of its attempt to project its right-wing fantasies onto a country that no longer felt defined by them. What's happening now is simply the endgame of the Abbott push, and the right-wing culture politics attached to it.

While we're on the subject of political donations to the Liberal Party - perhaps voters should look more closely at Prime Minister Malcolm Turnbull's past and present

Senator Arthur Sinodinos is merely the tip of the iceberg when it comes to Liberal Party of Australia election campaign fundraising…….

In 2003 Malcolm Bligh Turnbull stepped down as Liberal Party treasurer to stand as a candidate in the seat of Wentworth at the 2004 federal election.

Former federal Liberal Party treasurer Michael Yabsley and then federal Communications Minister Malcolm Turnbull appear to have created the Wentworth Forum on 25 May 2007 with the listed address Suite 505, 80 William Street, East Sydney,  NSW 2011. It was not originally listed as an associated entity.

It said of itself:

The Wentworth Forum is a fundraising initiative to engage members of the Wentworth community and other personal supporters of Malcolm Turnbull.

The Forum presents a dynamic range of small events to further thought leadership on the future of Australia, and how best to safeguard and ensure our continuing development as a nation. Membership of the Wentworth Forum is by private subscription and details are available by contacting The Wentworth Forum.

The Wentworth Forum was almost immediately noticed by the Murdoch media.

The Daily Telegraph, 1 August 2007:

FOR most Australians $55,000 is a lottery win, but for the richest politician in Australia - Malcolm Turnbull - it's the entry fee to his elite election fundraising club.

The Environment Minister has asked his well-heeled Eastern Suburbs supporters to fork out between $5500 and $55,000 for membership to the Wentworth Forum, a think-tank whose main aim is to get him re-elected.

And he's even throwing party at his harbourside mansion as part of the campaign, with a guest appearance from Prime Minister John Howard.

Mr Turnbull, a former merchant banker, said he needs the money because the Liberal Party is at a financial disadvantage to Labor, which he claims receives a "torrent of cash" from the unions.

"I couldn't be more concerned, I'm totally concerned, I do not take Wentworth for granted," the Member for Wentworth said.

In August 2008 the federal Labor Government introduced the Tax Laws Amendment (Political Contributions And Gifts) Bill 2008 to remove tax deductibility for contributions and gifts to political parties, independent members and independent candidates. This became law in early 2010.

Before then, in 2009, the media began to look once more at Turnbull’s forum and it is said to have ceased operation in that same year. Though it remains a registered business name in NSW (BN98292798) and still keeps a website with contact details at wentworthforum.org.au.

The Sydney Morning Herald, 15 July 2009:

NEARLY 20 individuals or families listed among Australia's richest 200 have contributed to Malcolm Turnbull's electorate fund-raising machine, which has collected more than $1.4 million since 2007.

Contributors to the Opposition Leader's fund-raising arm, the Wentworth Forum, include the Seven Network chairman, Kerry Stokes; the Westfield founder, Frank Lowy; the former Macquarie Bank boss, Alan Moss; and the Aussie Home Loans chief, John Symond.

Others include the former chief of the failed investment bank Babcock & Brown, Phil Green; the boss of Meriton, Harry Triguboff; the property developer Bob Rose and Ros Packer.

Mr Turnbull, a former merchant banker, is listed by BRW among Australia's richest 200 people. The forum is run by the federal Liberal Party treasurer and Mr Turnbull's long-time friend, Michael Yabsley.

It was set up in 2007 when Mr Turnbull was environment minister in the Howard government. At that time, electoral boundary changes had made Wentworth a less safe seat for the Liberals.

Regarded as the country's most sophisticated political fund-raising machine, the forum offers membership packages that give the most generous supporters more opportunities to gain

access to Mr Turnbull.

It costs $5500 to be a "member", $11,000 to be a "sponsor", $16,500 to be a "patron", $25,500 to be a "benefactor" and $55,000 to be a "governor".

A governor can host boardroom events, and gets two tables at big functions featuring Mr Turnbull, and attendance at an exclusive dinner for supporters.

Members receive one seat at a big function and three tickets to boardroom events.

Disclosure of the forum's methods has prompted charges that Mr Turnbull has put himself up for sale.

"That's the first time we've seen it so clearly … It is spelt out what you will have and how often you will see that person," said the NSW Greens MP Lee Rhiannon, who with an academic, Norman Thompson, has scrutinised the forum's operations.

As a backbencher in 2005, Mr Turnbull proposed a ban on donations from companies, unions and foreigners. Individuals would be allowed to donate subject to an annual cap.

A spokesman for Mr Turnbull said yesterday that the forum's activities were similar to those of "many other fund-raising forums used by both political parties"……

An analysis of forum donations, fund-raising events and memberships between 2007 and last December shows Mr Turnbull received more than $1.4 million. He personally contributed about $10,000 in catering for forum events.

Most of the money was raised before the 2007 federal election.

The forum has accepted money from British American Tobacco, with a senior executive paying $16,500 for a "patron" membership this financial year.

Other contributors include the Sydney multimillionaire Matt Handbury, co-founder of the Australian Rain Corporation and nephew of the News Corporation chief, Rupert Murdoch.

Mr Handbury's company received a $10 million grant from Mr Turnbull when he was environment minister not long before the 2007 election.

From August 2007 to last December companies and people associated with Mr Stokes have contributed $44,000 to the forum.

New Matilda, 15 July 2009:

Turnbull’s fundraising efforts have been largely managed by his friend — and veteran Liberal Party fundraiser — Michael Yabsley. With their intimate knowledge of how to tap rivers of gold from wealthy Australian donors, these two have proved to be a formidable team.

Yabsley brought considerable experience to the task of establishing the Wentworth Forum. Significantly, as Chair of the NSW Liberal Party’s Millennium Forum, Yabsley introduced a new style of political fundraising in Australia, one which put access to leading politicians centre stage when donations were solicited.….

The individuals who have contributed to the Forum are a Who’s Who of Sydney’s finance, law and property worlds. At least 17 — including Turnbull himself, who has donated catering for Forum events — have been listed at least once during the past three years in the list of Australia’s 200 richest people, published annually in the Business Review Weekly…..

Throughout 2007, the money rolled in for Turnbull; the Forum raised over $1.1 million for his re-election campaign. A total of 92 individuals joined the Forum in this period, mainly as Members or Sponsors. There were only 10 people among the Patron and Benefactor group and one Governor…..

The Forum continues to raise money for Turnbull. The latest figures for the six months up to December 2008 show that it raised over $300,000 for the 2008–2009 year. Most of this money was from membership renewals, which provide the many levels of access to Turnbull. Only about $17,000 came from direct donations. More money will be received throughout 2009 as people renew their memberships.

One of the more contentious donors to the Forum is British American Tobacco Australia (BAT). Early on, only small amounts of money were paid by BAT for attendance at fundraising events. Then in December 2008, Bede Fennell, who is the Head of Public Affairs for BAT Australia, paid $8250 for a half-year Patron membership in the Forum to take effect in 2009. A further $16,500 was paid for a Patron membership in 2009–10. The Liberal Party reported this money as received from BAT.

The Wentworth Forum activities do not sit easily with Turnbull’s earlier reform zeal for electoral funding when he was a humble backbencher.

In a February 2005 email to Woollahra councillors, he went on the public record in opposition to donations from companies and other groups. He wrote, "no political donations should be allowed unless they are: from citizens and/or persons on the electoral roll (i.e., no companies, unions, associations etc); subject to a cap; and donors should certify that the donation is either their own or their spouse’s money and has not been given to them by a third party."

Interestingly, in these comments Turnbull did not mention a cap on a candidate’s own money, which leaves him, as a very wealthy individual, with a distinct advantage. He spent over $600,000 of his money on the 2004 election. It is not known if the NSW Liberal Party also spent funds in Wentworth since this information is not required to be disclosed to the Australian Electoral Commission.

In his time as federal Opposition Leader, Turnbull has thwarted electoral funding reform, quite possibly judging that the current system gives the Liberals an advantage. When federal Labor and the Greens combined in 2009 voting to ban foreign donations and make contributions from other sources more transparent, the Coalition and Senator Fielding defeated it in the Senate…..

News.com.au, 29 August 2009:

GODWIN Grech, the Treasury official at the centre of the fake email affair, proposed a fee deal to the merchant bank running the OzCar fund whose chairman was a key backer and personal donor to Malcolm Turnbull.

The effect of the deal was to enable Credit Suisse, the bank hired by Treasury to implement OzCar, to maintain its $5 million in fees, despite the fund being scaled back from $2 billion to $1.3bn.

The Weekend Australian can reveal that John O'Sullivan, the chairman of investment banking for Credit Suisse, donated more than $20,000 to the Wentworth Forum, the Opposition Leader's political fighting fund.

Mr O'Sullivan is president of the federal electorate conference in Mr Turnbull's Sydney electorate of Wentworth and a member of the Opposition Leader's Point Piper branch.

The OzCar affair was the subject of a recent report by Auditor-General Ian McPhee, which criticised Mr Grech's conduct in the OzCar affair and accused him of at times acting in a partisan fashion…..

The Wentworth Forum surfaced in the public record again in 2011.

Submission to the inquiry into the funding of political parties and election campaigns, Dr Norman Thompson, Director NSW Greens Political Donation Research Project, June 2011:
Almost all candidates running on a political party’s ticket submit nil returns to the AEC after each federal election in spite of many spending hundreds of thousands of dollars on their campaigns and probably receiving similar amounts for their campaign funds. When some candidates report expenditure but no donations received, I have been told that this involves a candidate spending his or her own funds on their campaigns.

Malcolm Turnbull is an excellent example of this. It is only because his Wentworth Forum disclosed membership data to the NSW EFA but not the AEC that we know this fundraising body collected at least $1.1 million for his campaign in the run-up to the 2007 federal election.  Local observers estimate he spent far in excess of a million dollars on this campaign.

Yet, Mr Turnbull submitted a return to the AEC after the 2007 election in which he reported no donations received and less than $72,000 spent.  As I stated above, I have been advised that when expenditure is reported by lower house candidates this is usually their personal money if they reported receiving no donations. Obviously Turnbull’s donations were funnelled through the head office of the NSW Liberal Party. This appears to happen with almost all candidates who run on a political party’s ticket, hiding the identities of who financially supports these candidates.

In December 2011 the Joint Standing Committee Report on the funding of political parties and election campaigns also made passing reference to The Wentworth Forum, but essentially since then there has been little mention of how Prime Minister Turnbull goes about fundraising for his own re-election campaigns.

In 2012-13 the Liberal Party reported more than $73 million in revenue to the Australian Electoral Commission, of which $14.1 million came from the party’s NSW Division.

By 2013-14 the NSW Division was reporting revenue of $19.6 million and in 2014-15 $20.4 million.

Australian Federal Election 2016; debt, credit and GDP

So how is Australia’s economy faring under the Abbott-Turnbull Government in the lead-up to the 3 May 2016 federal budget and the following general election?

Australian Dept of Finance, 24 March 2016:

The underlying cash balance for the 2015-16 financial year to 29 February 2016 was a deficit of $38,719 million.¹

The fiscal balance for the 2015-16 financial year to 29 February 2016 was a deficit of $35,292 million…..

Total revenue was $1,223 million lower than the MYEFO profile, primarily due to lower than expected taxation revenue and dividend income.

Total expenses were $2,831 million lower than the MYEFO profile, primarily due to lower than expected supply of goods and services, wages and salaries and grants expenses…..

Net worth is negative $352,423 million;

Net debt is $287,920 million; and

Net financial liabilities are $516,561 million.

Financial Review, 28 March 2016:

Australia is one of seven countries that Forbes magazine says is the "most likely to suffer a debt crisis" within the next three years. 

China, whose economy has faltered in the past two years, comes No. 1 on the list of seven, but Australia is No. 2. Sweden, Hong Kong, South Korea, Canada and Norway complete the list of infamy.

Using data for both private and public debt compiled by Switzerland-based Bank of International Settlements, the magazine looks at the rate of growth of credit compared with gross domestic product, paying particular attention to when credit growth begins to fall……

"The bottom line is that private sector expenditure in an economy can be measured as the sum of GDP plus the change in credit, and crises occur when (a) the ratio of private debt to GDP is large; (b) growing quickly compared to GDP," the magazine says.

When credit growth slips as servicing debt exhausts funds available to finance it, "new borrowers baulk at entry costs to house purchases, and numerous euphoric and Ponzi-based debt-financed schemes fail" leading to a change in available credit.

Australia, like the other six countries on the list, fill the two key prerequisites, a high level of private debt to GDP, and a rapid growth of that ratio in the last few years, the report says.

Economic crises often coincide with private debt exceeding 1.5 times GDP and the level of private debt grows by about 20 per cent over a five-year period.

The Guardian, 15 January 2016:

The results are in: Australian households have more debt compared to the size of the country’s economy than any other in the world.

Research by the Federal Reserve has shown the consolidated household debt to GDP ratio increased the most for Australia between 1960 and 2010 out of a select group of OECD nations. Australia’s household sector has accumulated massive unconsolidated debt compared with other countries. As of the third quarter of 2015, it now has the world’s most indebted household sector relative to GDP, according to LF Economics’ analysis of national statistics……

Australia has around $2 trillion in unconsolidated household debt relative to $1.6 trillion in GDP. Australia’s ratio is 123.08%.....

Australian property investors and homeowners are burdened with massive mortgages, especially new and marginal entrants. Unlike winning a gold medal at the Olympics, having the world’s most indebted household sector is not an achievement the nation should be proud of. This is where Australia’s real debt and deficit problem lies, not in the public sector.

Footnotes

1. Compare with the 2013-14 financial year to 30 September 2013 which covers the last eight months of the former federal Labor government:

The underlying cash balance for the 2013-14 financial year to 30 September 2013 was a deficit of $22,929 million.

The fiscal balance for the 2013-14 financial year to 30 September 2013 was a deficit of $19,659 million…..

Total revenue was $4,580 million lower than the Budget profile primarily due to lower than expected taxation revenue. This reflects lower than expected individuals and other withholding taxation, company tax, superannuation fund tax and resource rent taxes.

Total expenses were $4,636 million lower than the Budget profile primarily due to lower than expected grants and subsidies, suppliers and personal benefits expenditure.  This is in part consistent with reduced expenditure during the election caretaker period and reflecting timing differences, particularly for grants and subsidies…...

The net worth of the General Government sector is a negative net asset position of $220,670 million at 30 September 2013.

The net debt of the General Government sector is $174,557 million at 30 September 2013.

Australian Federal Election 2016: a picture's worth a thousand words

Financial Review 28 March 2016