It has been 26 years, 26 years of Australia’s old wealth billionaires subverting Parliament, their donors buying, their lobbyists cajoling Liberal and National MPs to keep their precious loophole intact. Luke Stacey and Michael West report on the failure of Rex Patricks’ “grandathering” amendment.
It’s a loophole which effectively means that they are different from other Australians, financial apartheid if you like. Unlike all other Australians, some billionaires and other wealthy citizens don’t have to publicly disclose their financial accounts and tax affairs, which may involve any sneaky offshore entities.
Labor and the Greens were onside, Rex Patrick, Jacquie Lambie too. It was finally ready to go. Senator Pauline Hanson, the controversial One Nation leader, had given her word she would back the bill to dump this loophole.
The Coalition, apparently servants of their wealthy party donors were opposing the Rex Patrick amendment. They just needed one vote to swing it in favour of billionaires, and their wish came true. Senator Hanson, professing to represent ordinary Australians, did an OIympian backflip.
It was 17-17; 17 votes in favour of the amendment, 17 against. The National Party, purporting to serve farmers while raking in donations from billionaires and mining companies, was voting with the Liberal Party. Josh Frydenberg, the Treasurer, was running about lobbying for the billionaires. Jane Hume too, the Liberal senator took up the fight in the Upper House.
It was the quintessential case of politicians representing the ultra-rich versus politicians who wanted change, change in the interests of ordinary Australians fed up with rising inequality, fed up with the double standards of politicians claiming they represent their constituents when in reality they were representing party donors, special interest groups wanting a favour returned. Corruption.
Last night, Independent Senator Rex Patrick tabled an amendment to the Senate to repeal Paul Keating’s 1995 grandfathering exemption protecting 1,119 large proprietary companies from publicly lodging financial accounts with corporate regulator ASIC.
Thanks to a last-minute backflip from the One Nation Party, the amendment was voted down in the Upper House as Senator Hanson and her colleagues sided with the LNP.
The purpose of the amendment is to heighten corporate transparency by removing this protection racket which favours some of Australia’s wealthiest billionaires including Gina Reinhart, Frank Lowy, Harry Triguboff, Kerry Stokes and Anthony Pratt.
They can all be found on our Secret Rich List database.
The backflip from Pauline Hanson was majestic. The Senator informed Michael West Media only last week that she “strongly supports” Senator Patrick’s amendment.
“The Coalition has resisted repealing (this exemption) because it’s terrified it will expose their rich corporate friends to proper scrutiny.
“Senator Patrick has attached the amendment to previous bills that (One Nation) hasn’t always been able to support in order (for them) to pass. With respect to this Bill, I will support it.
“It was only supposed to be a temporary two-year measure (in 1995) and we need to ensure more accountability and transparency.
“If the Senate ever finds itself without Senator Patrick in the Chamber, I will continue to pursue it personally.”
But it did not happen. Speaking about the result with MWM, Senator Patrick said:
Deep down, Pauline believes what’s happening is wrong, but she’s been played by a Treasurer who just wants the can kicked down the road. She must explain to all Australians the deal she has made and when she expects this grossly unfair and inappropriate exemption to be lifted.
I am not deterred and I will continue to highlight and pursue this issue. There should be one rule for all, not a rule with a special exemption for a select group of billionaires.
Asked why One Nation reneged on its promise, Senator Hanson said:
“In exchange for supporting this legislation, One Nation has secured a commitment from the Treasurer that the government will review the grandfathering exemption that has been the subject of amendments.
“Josh Frydenberg has a matter of weeks before the next set of Treasury laws are before the Senate. If he hasn’t presented a measure that will repeal the exemption, I will provide the two votes Senator Patrick requires to pass the amendment.”
Indeed, Senator Malcolm Roberts of One Nation told the Chamber:
“We make decisions based on data … so we’ll be giving the Federal Treasurer a chance. If he doesn’t deliver, then we’ll be back (supporting) Senator Patrick.
“If (Frydenberg) can deliver, there are certain sensitive issues involved, and we want them clarified before taking capricious action.”
Could these sensitive issues be Treasurer Frydenberg’s old-hat argument about the “real concern” at the risk of these grandfathered individuals and their families being kidnapped if their financial accounts were made public?
Yet, as we have reported previously and as Senator Patrick made clear again in the Senate last night, this is ignoring the fact that their details can already be accessed via the ASIC corporate database. And for those harbouring significant wealth, their affluence is paraded annually on the Australian Financial Review’s Top 200 Rich List.
Senator Patrick’s amendment was attached to the Treasury Laws Amendment (2021 Measures No.1) Bill 2021, and according to Liberal Senator Jane Hume, “this amendment has absolutely nothing to do with the bill at hand, and (Senator Patrick) is trying to delay the passage of this bill, and this bill is exceptionally important”.
What makes this legislation so important, according to the Liberal Party?
Schedule 2 of the bill will make permanent the temporary changes put in place last year to better protect publicly listed companies from shareholder litigation. Sound familiar?
The new law makes it harder for ASIC to take action against directors and for shareholders to sue these companies for failing to promptly disclose market-sensitive information that would affect investment decisions for everyday investors.
A mate’s deal for company directors?
In arguing the change, the Liberal Party has expressed concern for their big business constituents that they are far too exposed to “opportunistic shareholder class actions”.
Jane Hume, who formerly worked with some of Australia’s top investment banks before entering Parliament, led the charge.
Senator Hume, in her staunch opposition to Senator Patrick’s amendment in the interests of protecting big business, cited support from the likes of Jennifer Westacott, CEO of peak body some of the nation’s most influential lobbyists the Business Council of Australia.
“While I understand that you love to slap this amendment onto everything that moves … it is simply a matter of showmanship”, Hume said.
“In fact, I think you are making a mockery of what is a very serious and important issue and important change for our business community and our economy more broadly.”
Questioning Senator Hume in the Chamber, a passionate Jacqui Lambie demanded an explanation as to why the Liberal Party insists in shrouding the grandfathered elite in secrecy.
“ASIC has told parliament that the lack of financial reports for exempt companies reduces transparency about possible indicators of tax avoidance or tax minimisation … Why has the Government ignored ASIC’s advice? … ASIC itself is concerned about these [grandfathered] companies, which many of them would be your donors!”
“Why is that so important for ASIC, but it’s not important to the Liberal Party when it comes to transparency and (potential) tax avoidance?”
In response, Senator Hume said, “those companies do disclose to ASIC and they also disclose to the ATO. The issue that you’re concerned with I think is that they don’t disclose publicly … But they do pay tax”.
Senator for the Australian Greens Peter Wish-Wilson told the Chamber on Monday that because private companies have “less onerous restrictions” than publicly listed entities, “they do get used a lot more often for aggressive tax minimisation”.
“There is no policy rationale for this (exemption) at all, this is purely about protecting the donors (of the major parties)”.