The following contains little original thought. The framework is largely derived from the book Game of Mates by Dr Cameron K. Murray [Cameron is an economist and consultant who 
specialises in property markets, environmental economics, and corruption. He teaches at the UQ and blogs at fresheconomicthinking.com ]; and Professor Paul Frijters [Paul is a prominent research economist and has published over 70 papers in fields including unemployment policy, discrimination and economic development. He regularly commentates on economic issues in newspapers and on television, including articles in the New York Times and on the BBC. 
He specialises in applied micro-econometrics, including labour , happiness, and health economics, though he has also worked on pure theoretical topics in macro and micro fields. Currently, Paul is a Project Director and Professorial Research Fellow in the Centre for Economic Performance Wellbeing Programme at the London School of Economics.] adapted to include examples of the Game from the Northern Territory. Readers are urged to buy the book because it explains the Game much better across a wider range that includes transport, banking, superannuation, and many more sectors; all the Mates cooperating to steal huge chunks of the economic pie for themselves.
The ‘New” NT public servant.
The first NT administration was largely composed of the “Port Moresby Mafia”, those Commonwealth public servants who chose not to become redundant when PNG achieved independence and instead redeployed to the Territory . While they were a tight knit group and very susceptible to pressure emanating from their department secretaries, they could be considered as resistant to corruption, either implicit [the promise of future rewards] or explicit [money in the hand]. One bloke, [senior enough to be offered significant grey gifts] when asked if he had ever taken a bribe, answered “no, no one ever offered me enough”. The NT 21st century public service has been shaped by decades of morally bereft practices that have rewarded sycophancy and ignorance. Worse still, the new public servant knows that however much he plays the Game, he can be replaced at the whim of the Minister. Often by a crony that is even more ignorant and holds his place simply because he’ll do whatever it takes for his mate, the Minister.
Most of the early Ministers were reasonably cluey, some positively classy. When Perron proposed and successfully passed the Rights of the Terminally Ill legislation he surprised many in the electorate, but gradually they became more and more outrageous, culminating in the strangling affair.
Jeremy Thompson.
…… I’d heard a rumor that Max Ortmann, the Minister for Works in the NT Government was handing out favors to people who had helped him attain office. The stories had it that a committee of local businessmen had backed Max solidly with substantial amounts of money during the last election. Chance threw up an opportunity to advance the story when we filmed a little piece on a couple of young blokes who were having no luck getting government approval to set up a paragliding business; the relevant minister was Max Ortmann, so I teed up an interview on the subject with him at his earliest convenience, scheduled for two days later.
Not wishing to waste the opportunity I started asking around about this committee; finally, a CLP stalwart admitted cheerfully that he was a member, that “we got Max up” and gave me the names of a couple of other members. What was intriguing was that one of these men, was the developer of a highly controversial canal residential suburb on the pristine Darwin harbour, and the other, was a member of the firm constructing a second highly controversial harbourside development. Both developments were approved by the Minister for Pubic Works, Max Ortmann.
So the obvious questions I wanted to put to him were: did these men help you, financially, in your election campaign? Did you subsequently, as minister, approve developments that would advantage them financially? If so, is such conduct proper for a minister of the crown? I began asking the planned questions – but never finished them. Max grew clearly agitated and angry as the line of questions continued. Rising, he advanced around the desk and tore off a page of my notepad, crumpling it and throwing it to the floor. Then, as I removed the neck mike from my shirt, Max grabbed at it and tried to jerk it from its socket in the video recorder. He couldn’t, so from behind he wrapped the cord around my neck and gave it a good solid jerk. What does one do under these circumstances? I left the room. David Hill, then head of the ABC, told me later I should’ve “jobbed the prick”.
Max pleaded guilty and was placed on a three-month good behavior bond, lost his job in the ministry and, later, lost his pre-selection. His political career was over, but I don’t believe the Northern Territory was any the poorer for that. The Max Ortmann affair, and the events that lay behind it, is just a small vignette of the political landscape of the deep north. Those of us who have worked there have seen a system of government and the use of public monies that is deeply disturbing and can only be resolved by a Royal Commission with wide terms of reference.
The standard of Governance kept deteriorating over the decade until the only members left were real buffoons, so stupid they thought they were entitled to the grey gifts and nobody would think any less of them if they accepted ‘hospitality’.
Throughout the term that began under Mills and continued under Giles, the fifth floor of Parliament House ….. became the equivalent of the Country Liberal Jurassic Park. Party figures from the past, particularly from the dying days of the old CLP, were resurrected and put into senior positions. The attitude that the CLP had a ‘rightful inheritance’ to govern once again pervaded the halls of power, to the extent the ex-minister who made those ill-advised comments, Stephen Dunham, became chief of staff to Attorney General John Elferink before being shoehorned into a senior public service role.
Tim Baldwin, another former minister, became Giles’s chief of staff when Ron Kelly was shuffled from the political office to head the Department of Mines and Energy. Former Chief Minister Denis Burke, who once called the judicial system ‘corrupt’ and was a registered lobbyist for property developer Halikos Group, was appointed head of the powerful Development Consent Authority. Peter Maley, a former MLA and a hefty donor, was named a magistrate. John Hardy, the head of Hardy Aviation and also a CLP donor, was made the NT Administrator. Barry Coulter, once Treasurer, was part of Mills’s highly paid Renewal Management Board to review the Territory’s finances.
Four former CLP presidents landed plum jobs: Graeme Lewis, whose fundraising activities would soon be put under the spotlight, headed the Land Development Corporation; Gary Nairn took over the NT Planning Commission; Tim Cross was named head of NT Correctional Industries; and Len Notaras became Chief Executive of Health. The trend continued in the backroom. Jon Taylor, who had worked for the CLP before 2001, was brought back as communications director when Cutler was palmed off to a department job. Jodeen Carney, who Mills had ousted as Opposition Leader in 2008, was named to head the Department of Children and Families. And both [Mills and Giles] named [Braedon] Early and Melky as their numbers men.
Crocs in the Cabinet [p 34 – 35]
ABC News
By Xavier La Canna
10 Feb 2016
The Northern Territory’s Deputy Chief Minister has apologised to Parliament for considering making a personal investment in a Vietnamese company linked to a major investment in the Top End. Willem Westra van Holthe, who is also Primary Industries Minister, today came under fire after documents came to light that showed links between his personal finances and CT Group. The Katherine Times reported the Minister took out a $650,000 loan in September 2015 to invest in CT Group, which is seeking to develop a 10,000-hectare dragon fruit orchard in the NT.
The documents, provided to the newspaper by Mr Westra van Holthe’s estranged wife, Jennie, showed he signed a formal share offer for a $570,000 stake in a mega mall planned in Ho Chi Minh City, a project owned by a subsidiary of CT Group. “I did sign it … but that was far as far as it went, ….. it was really just a piece of paper with my signature on it.” In Parliament he said there was a “personal smear campaign” against him from both inside and outside of the House. “Many, many lies have been told and vengeful accusations thrown,” he said.
Mr Westra van Holthe said he did not need to declare his intention to invest in the company to Parliament because there was never any contract completed and there was no exchange of finance. “It is not unusual for ministers to strike up friendships and relationships with people overseas with whom they have official government business dealings,” he said. “At the end of the day I made a judgment before I executed any contract, and that was that there was going to be a conflict of interest, or at least a potential one, so I didn’t go through with the deal,” he said.
Mr Westra van Holthe agreed that he gave the CT Group information about plans for a luxury hotel development in Darwin. “There was no secret information provided, or anything like that, or confidential information,” Mr Westra van Holthe said. “It was really just an aerial photograph and an explanation from me that this expression of interest was coming up.”
In May 2015, Mr Westra van Holthe announced a trade mission to Vietnam, where he would “hold discussions with Mr Tran Kim Chung, chairman of the CT Group in Ho Chi Minh City”. “The dragon fruit industry is an emerging market in the Northern Territory and one which I expect will only continue to grow over coming years,” he said in a government press release in May 2015.
Our new public servant may have started out as an enthusiastic young idealist, with all the ambition to do good things for society. For instance, as a lowly project officer he gets involved in town planning departments, spending time negotiating with developers whose applications for approvals hit his desk thick and fast for years. Over time he is invited to attend industry events, grand openings of new buildings, and private meetings where he becomes privy to the deep inner workings of the property development industry. Those dribs and drabs of favors. a dinner here, a lunch there, an inside peek at the perks of power generate a degree of trust, making him begin to identify as a member of the ‘in-group’.
Foundation 51
Much of Darwin’s modern character was forged in the aftermath of the Japanese bombing of 1942 and Cyclone Tracy in 1974. Razed twice in thirty-two years, the city was a frontier that was never finished, where wild days seemed to never end. It also attracted all sorts – accountants, tradesmen and businessmen – as well as shysters and shonks looking to make a quick and an easy fortune. By the 1980s Darwin was a booming little metropolis, with cash pouring in from Canberra and the rebuilding efforts from Cyclone Tracy still keeping people in good work and healthy libations. The population was soaring on the back of high wages and a prosperous economic outlook.
It was known that one of the best ways to make a buck was to be in the government’s good graces. A Four Corners episode in 1991, ‘Big Bucks Country’, highlighted the extent to which the then government was ‘in bed with big business’. Chief Minister Marshall Perron told the program the NT government rarely went to tender for major projects, ‘particularly in the development area, where you encourage entrepreneurs to come forward with proposals which will have a benefit clearly to themselves, to government and to our constituents’.
Companies that made big donations to the CLP consistently won government contracts. That trend of big donors winning public work continued apace under the new CLP, though there’s never been any evidence that those companies were unduly favored.
Graeme Lewis was CLP Treasurer and president in the 1980s. Party figures in the old days tended to take on backroom positions as a way of earning their stripes to run for Parliament, but those who knew Lewis then say he didn’t harbor those same ambitions. He was a CLP man with a CLP heart and, to back it up, a CLP wallet. The party had a special place for a smart accountant who could handle large sums of money discreetly. Lewis set up a company, Carpentaria Pty Ltd, to manage donations and other party funds. He told Four Corners that Carpentaria was ‘a body set up for the members of the Country Liberal Party in order to simply fund our election campaigns’. Lewis was charged by the Electoral Commission in 1987 for failing to provide them with information on Carpentaria, an offense that was proved but no conviction recorded.
By 2001, when the CLP lost power, people like Lewis had withdrawn to other quiet pursuits. But during the 2008 election, Lewis had been brought back into the fold. Donations had dried up in opposition, and the party’s coffers were bare. Lewis started pumping his own money into the party, as did others, and he again took an active role in polling and research. In early 2008 Lewis, as party Treasurer, got together with Opposition Leader Terry Mills and his chief of staff James Lantry to hash out a plan to connect a group of inexperienced MLAs with members of the local business community. Foundation 49 was concocted to give the CLP’s class of 2008 a free-market education. The ‘49’ came from the forty-nine companies and individuals who had donated to the Country Liberals before the 2008 election, but since the name was already taken according to ASIC records, Foundation 51 became the handle.
Crocs in the Cabinet. Northern Territory politics an instruction manual on how NOT to run a government. By Ben Smee and Christopher A. Walsh. Published by Hachette Australia. Publication Date: 29/11/2016
NT electoral commission refers alleged Liberal slush fund to police
NTEC announces it has completed initial investigation into Foundation 51 and says there has been a possible breach of the electoral act. The electoral commission (NTEC) announced on Wednesday it had completed its preliminary investigation into complaints that Foundation 51 is an “associated entity” of the ruling CLP party and that it failed to comply with disclosure obligations. “This view is based on legal advice from the solicitor general for the Northern Territory. The information collected from the investigation has now been referred to the Northern Territory police for further consideration.”
Both the CLP and Foundation 51 have repeatedly refuted accusations from the Labor opposition that the company is a slush fund. Emails and documents obtained by the ABC have shown a direct link between members of the organisation and the government, as well as revealing the suggestion that Foundation 51 spent an undeclared $200,000 on the CLP’s last election campaign.
The CLP has amended its 2012 returns to acknowledge receipt of funds from Foundation 51, and Foundation 51 has also made amendments of $120,000 to its returns, the ABC reported. In February, Foundation 51’s director Graeme Lewis told the Saturday Paper: “the only time that money ever went from Foundation 51 to the CLP was in 2014 when – by the time this had all blown up – I thought, what the hell, and I gave something like $7,000 to the CLP.” He has since said the company has been “wound up.”
An NTEC report on a compliance review into the CLP’s 2011-2012 disclosures found the party incorrectly calculated its payments and receipts by more than $138,000. The CLP later amended its return. The report, obtained by Guardian Australia under freedom of information legislation, also noted the party failed to provide information from nine of its 10 party units to the NTEC within the “deliberately generous timeframe.” In October last year the CLP shut down an inquiry into the past two decades of political donations, claiming it would be “unwieldy” and costly for Northern Territory taxpayers.
In much the same way as the Government of Joh Bejelke Peterson co-opted both politicians and the police into the Game, so too the NT Mates included the legal fraternity, the Commissioner of Police, mining companies and business, particularly the travel industry that was the recipient of many grey gifts.
Alexandra Kamitsis ran her business from an unremarkable suburban shopping complex, the sort few people would go out of their way to visit. But there were few powerful people in Darwin who had not come across ‘Xana’, the enigmatic travel agent, at charity balls or at her famous parties. Darwin was a long way from the Timor of Kamitsis’s childhood, and she was someone here. Rumours of trysts with politicians and other high flyers were rife, even long before Kamitsis’s arrest, perhaps fuelled by her way of ingratiating herself. She was known to make a beeline for the powerful at public events, and the favours she offered proved difficult for some to turn down.
Xana, pronounced ‘Yawna’ to those who were most intimate with her, hosted some of the most fabulous parties in Darwin, and she took delight in the calibre of her guest list. She schmoozed with the best of them for years and worked her way into the town’s elite social circles, to the point she was recommended as the chair of a prestigious community group. She had the personal mobile numbers of the people who mattered: politicians from all sides, high-ranking police, judges, lawyers, academics and even the personal digits of the highest of Darwin high society, the Paspaley pearling family.
Kamitsis started her company, Latitude Travel 69, with ambitions to be the travel agent to the ‘stars’. That aspiration to high society was a stretch for Darwin, where local ‘celebrities’ were little more than second tier personalities, politicians, drag queens, media types and small business owners. ‘She was the worst type of social climber the Territory has ever seen,’ recalled one long-time Territorian who had known Kamitsis for years from social gatherings. ‘It was only a matter of time before she was exposed.’ McRoberts landed in her orbit when he arrived in Darwin from Perth and they became friends. She booked limousines for McRoberts when he went interstate. In September 2010, Kamitsis sent him to the AFL Grand Final and booked a spa king room at the Park Hyatt for them both to share. Her unique ‘full service’ travel agency, in a market propped up by government trips, sat uncomfortably with some.
‘She would actually come on trips with us,’ didn’t matter where it was either. If we went to the United States, she’d be there, if we went to Europe or Asia, she’d make sure she was travelling with us. Nobody wanted her there but she came anyway and just inserted herself on official trips.’ Kamitsis admitted in court to having an ‘intimate relationship’ with McRoberts and another police officer, Richard Bryson. She was charged with ripping off the government, making fraudulent claims for pensioner travel rebates and using the money to further ingratiate herself with ‘friends’.
On 12 November 2014, Kamitsis was paraded out of her suburban travel agency office in handcuffs in the middle of the afternoon. Police Commissioner John McRoberts had boarded a flight and was uncontactable. In his stead, Mark Payne pulled out the Kamitsis file that had been prepared by the fraud squad and authorised the raid of her business. McRoberts’s strict media rules were broken. Camera crews were tipped off and on the scene before detectives arrived. Kamitsis was paraded, handcuffed, into the back of a police wagon, the most public and high-profile arrest in the Territory since deranged murderer Bradley Murdoch.
Crocs in the Cabinet.
Maley’s vicious attack
By BEN SMEE and CHRISTOPHER WALSH, NT News
August 28, 2014
FORMER MAGISTRATE Peter Maley called Labor “scum” and “corrupt” in emails to a former legal client obtained by the NT News. Mr Maley resigned on Monday, just hours after seeking more time to respond to questions by the NT News about emails and other documents relating to a matter prior to his appointment as a magistrate. He had come under extreme pressure in recent months from Labor and members of the legal community who argued it was not appropriate for a magistrate to be involved in politics. The emails expose Mr Maley’s political leanings. He signs off as a director of a private company, Ammarula Pty Ltd.
ABC News
4 Nov 2015
A prominent Northern Territory developer has been selected as the preferred tenderer of an area of “prime Crown land” near Darwin. In a statement released on Melbourne Cup day, NT Lands and Planning Minister David Tollner said Halikos were judged to have “best met the Government’s stringent selection criteria to develop this prime Crown land”. The land, known as Berrimah Farm, is located in between the Stuart Highway and Tiger Brennan Drive, about 15 minutes drive from Darwin city.
Annual donor returns to the Australian Electoral Commission revealed Halikos donated $100,000 to the Country Liberals and $90,000 to Labor, in 2012-13. In that same year, director John Halikos also made a personal $50,000 donation to the CLP. Northern Territory Electoral Commission records show Labor received a $10,000 donation in the last two financial years worth of published data for donors – but the CLP received a total of $200,000 from the company and Mr Halikos in that same period. Unsuccessful tenderer Gwelo also paid $55,000 to Foundation 51, a company with close ties to the CLP.
Former Northern Territory police commissioner denies conflict of interest
Helen Davidson
Thursday 15 January 2015
The former Northern Territory police commissioner has denied he had a conflict of interest despite resigning from the top job on Wednesday following accusations he may have influenced a criminal investigation involving a person with whom he had a personal relationship. The accusations of a conflict of interest pertain to the case of high profile real estate agent, Alexandra Kamitsis, who is facing charges of fraud relating to a government travel subsidy scheme.
In a press conference on Wednesday afternoon the acting chief minister, Peter Chandler, said the evidence suggested there “may have been some influence” on the part of McRoberts. The NT government had “lost confidence” in McRoberts and his position was no longer tenable. Chandler said in a statement. “The integrity of the commissioner of police must be beyond reproach. The government has considered the available facts in this matter and believes that resignation is necessary to maintain public confidence in NT police.”
As soon as the Minister appoints one of his mates, the writing on the wall becomes apparent and our now disillusioned expert takes up a job offer with one of those developers. How could he refuse? They have spent years telling him how his talent is being wasted in the public service, and he calculates it is his chance to do good by working on the inside. He now also has good relationships with his previous colleagues at the planning department, and proceeds to nurture those relationships; after all, they are on the same team, and they believe he is just trying to do good from inside the industry.
After years of earning his reputation as a property developer that can work cooperatively with the regulatory authorities, the newly elected Government connections in the planning department pull him aside one day to see if he wants to come back. They are starting a new group that would become an ‘elite planning group’, with great powers to determine zoning controls across the state. They believe they need someone who has worked on both sides of the regulatory fence, inside the government, and within industry and can therefore negotiate positive outcomes for the community. No longer is it us versus them. The authorities and the developers want to be a team.
As Ken Parish said at a 2017 CDU conference on transparency:
…….. the reported comment by current Chief Minister Michael Gunner that his team “won’t overreach or politicise the public service” is a little disingenuous. The politicisation is inherent in the terms of the Northern Territory’s Public Sector Employment and Management Act. It is the most politicised public service legislation in Australia and lacks any of the safeguards typically found in corresponding legislation in other states and territories. Certainly it was enacted by the Perron CLP government back in the 1990s, but the previous Martin/Henderson ALP government did nothing to remedy its deficiencies, and Mr Gunner has so far also failed to indicate any intention to do so. If his government is serious about transparency, accountability and a non-politicised public service he really needs to do so as a matter of priority.
Federal, State and Territory governments all adopted a contract-based model of Senior Executive Service back in the 1980s, which means that departmental CEO’s are obliged to do exactly what ministers and their advisers instruct if they want to keep their jobs. The days of a career public service where powerful Departmental Heads could give fearless and impartial advice to the Minister are long gone. In the Territory that loss of power has been even greater. Partisan hacks are appointed to head departments at a significantly higher rate than in larger states, and quite a few of them get sacked on changes of government. That certainly occurred on the election of both the Mills/Giles CLP government and the new Gunner Labor administration. Accordingly, although the Territory still has some very good experienced heads of department, it doesn’t have as many of them as you would wish given that the Ministers who are their constitutional overlords are completely inexperienced themselves.
The first act as leader of the planning group is to approve a planning application for his previous employers. He justifies his actions on the basis that he was asked to be part of planning group as evidence that his earlier work is socially beneficial. It would be negligent not to now use his power to approve his own planning application and provide a gift of property rights to his former employer. He pretends that this economic reality has not clouded his decision that he is in the business of planning for development, and his experience in the development industry had provided him with many contacts who need government cooperation to get their proposals off the ground.
No expense spared in review of Territory finances
By Michael Coggan
Thu 1 Nov 2012
Documents tabled in the Northern Territory Parliament have revealed the chairman of the board set up to review the Territory’s finances is being paid $220,000 for six months’ work. Former Territory Administrator Neil Conn is the chair of the Renewal Management Board. The board’s two deputy chairmen, Ken Clarke and John Gardiner, are being paid $200,000. A former Territory government minister, Barry Coulter, is being paid $150,000 dollars as an adviser to the board.
And it appears that little has changed. The poisoned political culture also permeates the state apparatus. Political masters need to present a story of their agenda to the population, all the while doing the bidding of their corporate sponsors, who hold the threat of a well-versed media storm if he does not get what he wants. To appease their campaign funders, politicians will even directly invite them to dictate policy, such as by inviting him to the top meetings inside the ministries and government institutions, to the despair of the good public servants there. The policies that are precooked by these think-tanks get adopted by ministries, that have seen their own ability to resist the Game, diminish over time.
New Chair announced for NT Planning Commission
13 July 2017
Minister for Infrastructure, Planning and Logistics Nicole Manison today announced Dr David Ritchie as the new Chair of the Northern Territory Planning Commission (NTPC). Ms Manison said the Territory Labor Government is determined to restore trust in Government and will review planning in its first term, to provide certainty for the community.
The NTPC is an independent statutory authority, established to undertake strategic land planning across the Territory, to deliver integrated, sustainable and appropriate land use planning for the community. Mr Brendan Dowd, the Chief Executive Officer of the City of Darwin, will continue as a member of the NTPC, along with recurring memberships which include the Chairpersons of the Development Consent Authority (Mr Denis Burke), the Heritage Council (Mr Wayne Kraft) and the NT Environment Protection Authority (Mr Paul Vogel).
During his tenure, the Lands and Planning Minister granted many approvals that conflicted with the town plans of councils. He came to believe that council decisions were based on amateur and inappropriate town plans that only serve to constrain developers. That the council’s plans might represent the interests of the public never crossed his mind. When the government became aware that the ‘new public servant’ is now directing the Game to the benefit of his erstwhile employers, they dissolve the planning group and he is offered work with one of the developers whose land he had approved for development just a few years earlier. So the cycle continues.
Lands and Planning Minister denies conflict of interest in rezoning decision
CHRISTOPHER WALSH and Dani McDonald, NT News
July 25, 2015
Lands and Planning Minister Dave Tollner denies conflict of interest in rezoning decision 8/7/2017. The proposed development would see a four-storey building on two lots that could have up to 11 residences. Mr Tollner has refused to step aside. “The Minister has no direct personal interest in this application and intends to make a decision once he has received reports from the Planning Department and the Development Consent Authority,” a spokesman said.
Neighbours say the narrow street will not be able to handle the increase in traffic and that neighbouring homes will be impacted by the proposed multiple-residence block that will be peering into their backyards. A neighbour, who did not want to be named, said Mr Tollner clearly had a conflict and should step aside from the decision. “The future value of the Tollner property hinges on the outcome of this application,” she said. “Surely this is a conflict of interest.”
Outgoing Lands and Planning Minister unilaterally approves controversial major changes to development of rural area
CHRISTOPHER WALSH, NT News
July 29, 2016
OUTGOING Lands and Planning Minister Dave Tollner has exercised his power on the way out of Government by unilaterally approving major changes to the development of the rural area. Mr Tollner, one week out from the CLP Government being put in caretaker mode, approved changes to the Litchfield Subregional Land Use Plan that will pave the way for lots to be subdivided into smaller sizes. “It paves the way for the urbanisation of the rural area,” Ms Purick said. “This is one week from going into caretaker mode and Tollner is pushing it through. “Why doesn’t he have the decency to recognise it’s been controversial and rural people do not want it?”
Ms Purick pointed to Mr Tollner’s heavy criticism of Labor doing a similar stunt in their last few days when they gave Stella Maris rent-free to Unions NT. “It’s hypocritical in the extreme. They don’t practice what they preach,” she said. Member for Nelson Gerry Wood called it a “sad day for those who believe in rural development”. “(Dave Tollner) has just done what he wants, the Planning Commissioner and developers want,” Mr Wood said.
Our mate has jumped the fence again, but by now, the fence is very low. Government agencies are full of others just like him who have done their time with the local developers, and are rotating in and out of government with surprising regularity. In twenty years, he and his Mates have established a Game so entrenched that any regulatory barriers have been dismantled in the interests of ensuring that a connected group can use the powers of government to grant favors to each other with ease. During this process, they have hidden their economic interests behind a well-orchestrated marketing campaign aiming to convince society of the myth that zoning and planning was to blame for high home prices. And none of it is illegal.
Seldom do the corporate spin doctors [otherwise known as ‘Government affairs teams’ ] allow a peek into the structured system of “oiling the wheels of commerce”. One of these rare moments occurred when a former spin doctor tried to distance himself rom the CBA debacle. In the AFR of Sep 1 2017 Dr Rodney Maddock [professor at Monash Business School who was, until 2012, head of group strategy at Commonwealth Bank of Australia], wrote:
Government affairs teams are typically made up of people who have worked inside the offices of senior politicians. They are recruited for their ability to open lines of communication between the company and the government. They are trading their contacts. And of course it is a two-way trade, in order to sustain the contacts, they have to provide information about the company or sector into the political offices.
As fewer politicians have any experience of business, and fewer political staffers know anything other than politics, recruiting government relations people who also are former political staffers to change the mindset is not going to work. For heavily regulated firms. and for most major Australian firms, the government relations function has to change. In a sea of uncertainty, firms have to make long-term investment decisions.
It surely has to be the task of government relations teams to help politicians and senior public servants understand some of the complexity. This is not to let firms hide behind the complexity, but rather so that policymakers understand better the difficulty of making good decisions, in that world. These groups need to involve people who have been immersed in the business and to understand some of its complexities. Clearly some exposure to politics would be helpful so that they can communicate with politicians and staffers in a way they understand. For highly regulated firms, the banks, the energy companies, media, airlines etc, a spell in the government relations team should be a step along the path towards higher executive positions. Government relations is far too important for these firms to be left to budding, failed or ex-politicians.
The CLP adopted a somewhat different strategy to supplement its elected politicians’ inexperience when it returned to government in 2012. It began enthusiastically appointing local political cronies, not only to ministerial adviser positions but as heads of government departments and agencies, often irrespective of qualifications and without anything resembling due process. Departmental and agency CEOs in that category have included:
Denis Burke (former CLP Chief Minister appointed as Chairperson of the Development Consent Authority in 2014 despite no evident qualifications for the role;
Gary Nairn (former CLP President and federal Liberal MHR for Eden-Monaro appointed to head the Planning Commision, which has no town planners among its members, although Nairn is a at least a surveyor);
Jodeen Carney (former CLP MLA and for a short time Opposition Leader, appointed as CEO of Children and Families– had been shadow minister for that portfolio for a time in Opposition);
Dr Len Notaras (former CLP President, appointed as CEO Department of Health in 2014 – in fairness an appropriate appointment as a doctor and longstanding senior health administrator);
Ron Kelly (former Chief of Staff for Chief Minister Adam Giles, appointed as CEO Department of Mines and Energy);
Stephen Dunham (former chief of staff to Health Minister John Elferink and former CLP Health Minister in the Burke government, appointed as Health Complaints Commissioner– arguably a reasonable appointment on merit but appointed with flagrant disregard to due process);
Dr Bill Freeland (former Executive Director of Parks and Wildlife under the Burke government, appointed in 2012 to chair the newly constituted Environment Protection Authority – again arguably a reasonable appointment on merit but also appointed with flagrant disregard to due process).
Of course, political cronyism is hardly unheard of in other states, but its sheer extent and audacity in the Northern Territory over the last four years is deeply troubling. The higher levels of the public sector have been utterly politicised and any semblance of a professional public service able to advise government without fear or favor no longer exists. This is a much worse problem in the Territory than in larger jurisdictions, given the lack of other democratic checks and balances and the inexperienced “shoot from the hip” propensities of some politicians, most notably Chief Minister Adam Giles and his best political mate Treasurer and Lands and Planning Minister Dave Tollner.
And, even when the perpetrator is caught and convicted, because he has mates in the Judiciary, the sentence is manifestly inadequate.
Corrupt former NT government staffer walks free after guilty verdict
Australian Associated Press
Tuesday 17 January 2017
The former chief of staff to a Northern Territory government minister won’t spend any time behind bars after being found guilty of corruptly receiving travel kickbacks. Paul Mossman was convicted of two counts of corruptly receiving a benefit from Latitude Travel’s Xana Kamitsis in 2014 while he was chief of staff to the then Country Liberals minister Bess Price. Justice Peter Barr sentenced Mossman to a 12-month suspended sentence in the NT supreme court on Tuesday. Mossman was facing a maximum penalty of three years’ imprisonment. Barr said while Mossman abused a senior position of trust, he was the primary carer of a teenage daughter and jail time would impact on his role.
In his sentencing submissions, crown prosecutor David Morters compared Mossman’s crimes to those of the disgraced former New South Wales minister Eddie Obeid. He said Mossman should receive a similar penalty to the former Labor power broker, who in December was sentenced to a maximum five years in jail for misconduct in public office. Barr said the 44-year-old showed an “undignified eagerness” to ingratiate himself with the travel agent by offering her more than $300,000 in exclusive government contracts. Mossman made it clear he’d be grateful to accept any travel benefits as a reward for favoring Kamitsis with significant commercial advantage, Barr said.“Corruption is corrosive and ultimately destructive of good governance,” he said.
The catch is, most of these people are not acting illegally. In the strict legal sense, they may not be corrupt. In fact, they often get the laws written for them [sometimes retrospectively], entrenching what should be corrupt activity as the normal way of doing business! NT’s rules surrounding conflicts of interest, cooling-off periods for politicians working in industry, and the way political discretion can be exercised, are also weak. And often success need not rely on the involvement of senior politicians at all, usually arising in more mundane parts of government departments and regulatory agencies.
Former Flight Centre Palmerston travel agent pleads guilty to pensioner scheme fraud
By Felicity James
Thu 15 Jun 2017
A former Flight Centre travel agent has admitted defrauding a Northern Territory government pensioner travel scheme of more than $110,000. Vanessa Barrett, 45, pleaded guilty in the Supreme Court to obtaining benefits by deception, while working at Flight Centre’s Palmerston branch between 2011 and 2013. Barrett submitted 169 false invoices with inflated flight costs for reimbursement by the NT Health Department, when the actual cost of flights she purchased for pensioners was much cheaper. Prosecutor David Morters told the court Barrett’s conduct had undermined the revenue systems of the NT Government and the sentencing should deter others.
Barrett’s lawyer Peter Maley said his client had been “absolutely devastated and destroyed” by her conduct and she should be assessed for a sentence of home detention. Mr Maley said the case of former Darwin travel agent Xana Kamitsis, who was jailed in 2015 for defrauding the same pensioner travel scheme, had significant differences. Mr Maley described the false invoicing practice as “widespread”, used by travel agencies across the NT and discussed at Flight Centre staff meetings.
Barrett’s case is one of several prosecutions launched in an ongoing NT Police fraud investigation into travel agencies rorting the pensioner travel concession scheme. In May, former Katherine travel agent Tennille Kim Foley was sentenced to three months’ home detention for defrauding the Government of more than $40,000.
Some politicians will get into politics knowing full well what they are entering, some already have a commercial agenda to pursue. Many will start out with some degree a public spirit, then be seduced, for the attentions of the party elders and commercial backers is flattering and only slowly becomes a game of ‘I scratch your back, you scratch mine’, with ever greater favors being exchanged. These politicians simply surround themselves with excuses and rationalisation. They quickly become impervious to the requests and interests of their electorate. Where once, in opposition, they seemed interested in changing the system, as soon as they assume office they become willing participants in the Game.
NT News
Christopher Walsh
Saturday August 2 2017
ALLEGATIONS of fraud have forced the NT Government to suspend a program aimed at providing works contracts to companies that employ indigenous workers. The NT News understands the alleged fraud could involve millions of taxpayers’ dollars and include well-known NT construction companies Infrastructure Minister Nicole Manison shut down the indigenous jobs scheme Indigenous Employment Provision Sum program yesterday after being informed of “potential widespread fraud” by the Department following an audit. Ms Manison said six companies from across the Territory have now been referred to NT Police for investigation.
Ms Manison said there was no independent oversight of the program to check on the individual companies’ employment claims. The NT News can confirm that $42.5 million has been paid out in projects through the program to different companies between October 2014 and June 30, 2017. One case of suspected fraud was identified in March and referred to NT Police and the Auditor General. It was unclear yesterday why that case was not made public at the time.
Paul Frijters
Consider what politics would do to someone who truly is sincere and yet reflective enough to see all the elbowing, compromising, back-flips, lies, manipulations, and U-turns that are the normal fare of everyday politics. It would offend his or her senses, make them feel dirty and make them lose their faith in humanity. They simply would be grind down by the relentless pressure towards mediocrity and short-term thinking. Hence politics is not the place for the truly sincere and reflective, certainly not in the modern age. For a similar reason will the meek and the sensitive fail in politics: they are not up to the job of backstabbing when they need to.
The majority of politicians are probably naive at the outset and have no idea what politics is truly like. They start out with convictions, plans, and hopes, and the good ones will simply often quit when they realise they are not wanted by their own party elders and backers. An example of the political machine taking control can be seen in the actions of Rob Pyne, elected in 2015 as the member of parliament in Queensland for the Labor Party in Cairns following a career as a local councilor. He started tabling instances of corruption at the local government level from all over Queensland in late 2015. Instead of praising him and investigating the material he tabled, the party hierarchy reacted by forcing him out of the party, dismissing any evidence out of hand, and conducting a media campaign against him, as all the other MPs and the party organisation closed ranks against him (Robertson, 2016). This is indicative of the internal organisation of the Labor Party in Queensland, as well as the willingness of the other politicians in the Game to go along with this blatant attempt to silence a critic.
A DAY AT THE CIRCUS.
The 2017 Economic Summit was the culmination of multiple road trips around the Territory soaking up the local vibe, making sure that the consultative process gave sufficient opportunity to discuss the various summaries. The justification for the ridiculous waste of money was so the the ‘new; Government could say that they were different in that they sought the views and opinions of the electorate. As if! The decisions had already been made and ticked off by the Mates. Then more Mates were formed into a panel of ‘experts’ to further ensure that the whole process followed the script.
A Ringmaster was resplendent in his crocodile skin belt and RM Williams boots, the only things missing were the Akubra and one of Mick’s Whips: they were probably in the Tojo parked in the basement. The gathering was welcomed by a Larrakeyah representative who touched on one of the most important subjects of the day; the fact that the vast majority of potential participants in Aboriginal Enterprise couldn’t tell the difference between an ABN and an ACN.
The Ringmaster directed attention to the beautifully presented full color discussion documents, hundreds of pages of data and achievements that bore more than a passing resemblance to the Federal White paper, with “Australia” changed to “Territory”. Unfortunately, the provenance of some of the data, as the CEO of the Cattleman’s Association later pointed out, was suspect, with association figures supported by the ABS, suggesting the pastoral industry was some 2½ times bigger than that displayed in the plans. The Minister for TB&I [he was the one wearing a suit] exhibited his inexperience by informing the audience that Government couldn’t grow the Territory by itself. He may have to learn that it is better to say little and risk being considered ambiguous, rather than “strutting the stage, full of sound and fury, signifying nothing”, and simply confirming the belief that Government can do little more than spend other people’s money.
After being told what we wanted to hear [that is, after all, what a Deloitte consultant does best] and suffering a Departmental CEO moment in the sun, we met the ‘expert’ panel. It consisted of a banker [business; pumping Darwin’s over inflated residential property market], a university technocrat [business; issuing a certificate to foreign students suitable for citizenship application], an Airport executive [business; monopoly regulation of air transport and tourism], a builder [business; managing the boom and bust construction industry], a lady of obscure business [for gender balance] and a bloke from ALPA [business; feeding Aboriginal communities]. Given that 95% of Territory business is defined as small, with the possible exception of the last member, the panel members wouldn’t recognize a typical Territory business if it rose up and bit them on the bum.
The first thing TB&I needs to understand is that Territory business is predominately a conglomerate of cottage industries, riding off the back of defense and a couple of capital intensive extractive industries, the latter notorious for creating boom and bust cycles that regularly weed out all but the most robust small business. The second is that the Land Councils sit like some huge octopus smothering small business, with their tentacles wrapped around any nascent Aboriginal enterprise, actively discouraging independent development of cottage industry, stifling innovation and suggesting all the while that they can’t do anything while the legislation remains unchanged.
The NLC website explains the process.
A detailed business proposal is required, including a business plan, financial projections, proposals for payments, local employment, joint venture proposals and other benefits to the relevant Aboriginal land owners and environmental impacts.
Where preliminary inquiries indicate that traditional Aboriginal owners may be interested in a particular business proposal, the proponent will be invited to contribute to the Land Council’s expenses in carrying out consultations with traditional Aboriginal owners. This usually takes the form of reimbursing the costs of bringing the traditional Aboriginal owners and affected communities and groups together for a meeting or meetings, which are preferably held on the land concerned. A contribution to the legal costs of the Land Council/Land Trust is usually sought on a “user pays” basis.
Another organization that has a relatively large influence on businesses in the NT is Indigenous Business Australia. They,
- Manage 22 direct investments and three trusts,
- Work with 40 Indigenous Communities and 60 Indigenous businesses,
- Have a current investment portfolio valued at 280 million, with ATSI investors owning equity interests of $109 million,
- Make $6.58 million annual distributions to Indigenous Partners,
- Employ 396 ATSI peoples, representing 35.2% of the total workforce in the Investments portfolio. With total salaries, wages and job relevant training for direct investments of $12.5m,
- Source $5 million of services and products from 59 Indigenous suppliers.
The opportunities for collusion and trading in grey gifts is enormous, particularly as the Senator responsible is a member of the CLP and well versed in the Game.
The breakout sessions were supposed to offer participants an opportunity to comment on the draft papers. This where they sent in the clowns. The Agribusiness group consisted largely of logistics companies, CEO of the Cattleman’s Association, a representative of a large, diversified pastoral company, once the jewel in the crown of the Packer pastoral empire, now part of an international conglomerate, and a privately owned mortgage broker.
Any comment outside the facilitator’s scrip was met with “That’s interesting! Now lets get back to the agenda.” Nobody knew how many NT agribusinesses were ‘small’, or how many, if any, profitable; there was nobody from the Farmers Association, the Land Councils or the EPA. Nobody could identify what land had economic development potential, what additional industries could be sustainable, what water policies existed or if any land capability research existed. The consensus was that a logistics coordinator was a good thing and that cooperative legislation should be improved.
Only the same old suspects were considered; the pastoral business [which cannot be diversified without significant change to legislation], the horticulture industry [mostly mango, which has almost reached saturation], fisheries [soon to become overwhelmed by Project Sea Dragon] and transport. In other words the I in Trade, Business and Innovation seemed to be completely forgotten.
The session on Renewable Energy took ‘farce’ to new heights. The standard response to most of the early questions was “ that will be referred to the Task Force” while the Chair of the new, revised v2017 Task Force [not to be confused with the GETF 1st Report 2010 or the 2nd Report 2011 or the NT Energy Review 2013] who was in the room, didn’t take the opportunity to contribute anything to the discussion. Talk about reinventing the wheel!
The really extraordinary thing about the whole conversation is that;
(a) the primary purpose of generating 50% of electricity from clean sources should be to reduce GHG pollution, and
(b) currently most GHG emissions in the NT are created by bushfires, and mines are still using bunker oil [Gove] and even the cleanest operators still use diesel, and
(c) Darwin LNG [Conoco Philips] generates more GHG pollution than the whole NT electricity network, to be followed by a second, even larger process train [INPEX], not counting the huge tankers that ship the gas to Japan.
Consequently, reaching a 50% target will be completely meaningless, making the Roadmap to Renewables redundant before it is written. None of this was communicated in the plenary session.
Much is made in all the discussion papers about the need for private capital. Yet there is no mention of the North Australian Infrastructure Fund [NAIF] or the NT Infrastructure Development Fund (NTIDF). In an article entitled “Northern Australia Infrastructure Fund spending more on board than projects” by Amy Remeikis, Brendan Lyon, the chief executive of Infrastructure Partnerships Australia is reported to have said,
“…..the fund was attempting to solve a problem that didn’t exist while the government ignored the problem that did. There isn’t a problem in terms of capital markets – there is a problem in terms of funded infrastructure projects which are able to be built,”. Mr Lyon said if the government saw opportunities to develop the north in ways the commercial sector had missed, it needed to fund those projects itself. “[As it stands] there is nothing for it to lend to – so for these projects to happen, it will have to write a cheque and have them delivered.”
The whole exercise was a typical NATO project: no action, talk only. All the meetings, all the discussion papers, all the summits and expert panels have but one purpose – to delay actually doing something. Jobs and growth are meaningless in the face of declining population and stifling regulation, be it by Government or the Land Councils. The loss of uniforms has had a much more deleterious affect than the Labor dispute at Wickam Point. The FIFO’s were always going to leave, it was just a matter of time and yet there seemed to be little discussion about the affect of the DHA on the residential property market.
A more achievable aim should be slowly increasing sustainable cottage industries. And keeping the population that has made their home here. Government currently has a number of investments, programs and initiatives that try to make the NT more attractive, such as the first home owner grants, stamp duty reductions and senior’s concessions. However FHOG and reduced SD has simply fed into rising prices making it difficult for middle income buyers to compete with investors in the residential property market.
In light of the current situation, government inaction on the Territory’s housing affordability crisis is indefensible. The housing market must respond in a timely manner to home buyer need rather than speculator demand. Fundamental reforms are required to reduce the propensity toward volatile boom and bust land cycles fueled by speculation and unsustainable levels of household debt.
In a report published 2015 entitled Clean Money in a Dirty System: Relationship Networks and Land Rezoning, the authors examined landowner relationship networks and lobbying behavior on successfully gaining value enhancing rezoning, finding that ‘connected’ landowners owned 75% of land inside the rezoned areas, capturing $410 million in land value gains out of the total $710 million from rezoning. Scaling up from the sample of six rezoned areas to the hundreds of rezoning decisions across Queensland and the NT in the last few decades, suggests that many billions of dollars of economic rent are being regularly transferred from the general population to connected land owners through political rezoning decisions.
The NT Labor Government should be admonished for not undertaking root and branch reform because, by adopting the “no pain, no gain” motto, they could have put the Territory on the road to economic recovery. Instead there remains this slavish attachment to the concept that Government and industry can work together to improve the economy. Firstly, Government is bereft of ideas with no incentive for public servants being innovative and/or proposing new initiatives for growing the economy, and, secondly, the vast majority of businesses in the NT are so small their owners are flat out keeping the wolf from the door. Never has the old Territorian epithet been more apposite: “when you’re up to your arse in crocodiles, it’s difficult to remember the original intention was to drain the swamp”.
In the administrative sphere, there are many improvements that maybe worthwhile. One reform is to implement a rotation system that makes systematic use of a pool of independent experts who parachute in to make key decisions on discretionary government decisions. Together with a group of other comparable countries, we could simply set up pools of available experts that can be used to parachute in and make decisions, with other countries borrowing our experts as well when needed. This should work well in areas like Defence contracts [where discretionary purchases seem pretty much inevitable], and large infrastructure and rezoning decisions. A scheme of having independent experts make decisions to ensure impartiality of those decisions is exactly what happens in with the refereeing of international sports. Why can’t it also be used for major technical, yet discretionary, public policy decisions?
A more ambitious improvement is to strengthen the independence of government departments. One way is to have people at the top of government departments, the secretaries, or CEOs of statutory bodies, be appointed via a jury system, replacing the current situation where politicians and special interest groups are heavily involved in deciding on top positions in the civil service, juries made up of random members of the population, or from members of whole public service, but at lower levels, assembled just for that purpose. Juries could make their own rules about minimum eligibility requirements and could decide on a large set of positions during a vetting period limited in duration to three months. This proposal uses the key strength of the jury system to be able to read the character of a person by their history and to judge on whether they have behaved honorably in the past or not, which Works reasonably well in criminal courts.“
Along the same line of thinking, we can extend cooling off periods for politicians and regulators that restrict them from working in the industry they previously controlled, which is standard professional practice for auditors and accountants. Already there are minimum periods between the political career of a politician and the moment they can lobby professionally.
Grey Gifts
At its core, the underlying power that corporates use in property and infrastructure is the discretion of bureaucrats to make rezoning decisions and determine the content of infrastructure contracts. The wealth in those sectors comes from these discretionary decisions over the allocation of things that have large private value, but are not priced. They are ‘grey gifts’. And they are the currency of ‘grey corruption’. In a world with clearly defined rules and no political and bureaucratic discretion, there are no grey gifts.
Because of it’s proximity to Asia most groups such a sports teams, bridge clubs and political parties reward their members by trips to Thailand, the Philippines and, more lately, Vietnam. According to the timeless dictum, “what goes on tour, stays on Tour”, everybody gets a chance to let their hair down and play up. Junkets organised by the NT Government have the added advantage that everything is found. Usually with a little sweetener to Latitude Travel and a bit of ‘special hostess’ services from local business. Anybody unsure of just what perks could be available simply got in touch with Paul Mossman.
Vietnamese businessman plays the Game.
Christopher Walsh, Exclusive, NT News
February 12, 2016
VIETNAMESE company CT Group arranged plush hotel accommodation, tours, transfers and dinners for Deputy Chief Minister Willem Westra van Holthe during a visit “to discuss opportunities to invest in Vietnam, either directly in the CT Group or other positive investments”. The company’s president Kim Tran Chung outlined those details to Mr Westra van Holthe in an email, obtained by the NT News, sent hours before the minister was due to arrive in Ho Chi Minh City on July 5 last year.
At the time, Mr Westra van Holthe’s partner, Theresa Phan, was employed by CT Group as Mr Chung’s secretary. The itinerary indicated CT Group sent her in a professional capacity to welcome the minister and collect him from the airport. The CT Group’s planned itinerary for Mr Westra van Holthe’s trip included an “executive suite” room was booked at the Parkroyal Saigon.
Documents obtained under the Freedom of Information Act show Mr Westra van Holthe did fly to Ho Chi Minh City, four days before the official Government trip where he represented Chief Minister Adam Giles to discuss supplying the country with live cattle and buffalo. Government records show he used those four days as “personal leave” before the official meetings. The NT News revealed that Mr Westra van Holthe signed a shares offer to purchase a $570,000 stake in a CT Group mega mall project.
The real reason everyone was upset [especially Willy’s wife ] was that he actually bought the ‘hostess’ home, whereupon his missus belted him with a lantern. Willie who publicly split from his wife of 27 years last year after admitting to an affair, said these latest revelations were just the another chapter in his private life that had been played out in the public arena. “These latest attacks on my character are nothing short of disgraceful and completely untrue,” he said. “I should say that I am disappointed that personal documents such as my private bank statements, normally confined to the sanctity of the matrimonial home, have been leaked to the media and to the Labor Party.” Really? What did he expect?
The reality is that bureaucrats regularly make decisions that have private winners and losers; decisions that can make millionaires out of some and paupers out of others. Their power comes from being able to choose who gets the massive economic value of their grey gifts, all the while not having to bear any personal costs. The problem is particularly large if there are frequent decisions that are not well observed by the electorate.
Complex, hard-to-read, regulatory environments require politicians and top bureaucrats to rely on their judgment and discretion to interpret and enforce the rules. Which way they err can make millions of dollars of difference to the people and companies operating under those rules. In a sense, they control an ‘economic honeypot’. And where there is honey, you attract insects who swarm about to get a taste of millions of dollars of on offer from grey gifts. In property, the value given away is the right to change the usage of land.
Who gets the property right is decided with a great deal of discretion in the bureaucratic system, but outside that system that property right has a market value. In infrastructure, the tax receipts of current and future generations are put in the hands of private owners of infrastructure projects through negotiated and flexible contractual arrangements, the value of which is capitalized into the value of the successful bidders.
A great example of how easily grey gifts are given, and how hidden they can be in complex rules systems, played out in Queensland in 2016 during a review of planning laws. The State planning laws and regulations determine the processes by which major projects are approved for development, including the rules councils must comply with in their own planning system. It was proposed that instead of council officers assessing a developer’s application, developers would be able to nominate a private certifier to make the discretionary assessment of the merits of their application. This put the developers totally in charge of development and thus bypassed councils: all the big players would befriend their own private certifiers, leaving only the very small developers facing any real problems in getting their planning applications approved. This tiny hidden rule could be worth tens of millions of dollars to those who can capitalise on it.
A simple test to help see whether a grey gift is being given is to ask:
- Whether the recipient would be willing to pay for the decision if they were made to.
- Would a developer pay a higher fee to choose their own assessor?
- Would they pay for rezoning?
- Would a toll road owner pay to close alternative roadways that compete with it?
When the answer is to any of the above is yes, a grey gift has been identified , and in doing so, identified a social cost.
Because of the degree of public interest in political decisions, political relationships and politicians themselves, the political class responds to this scrutiny by devolving much of its power further down the regulatory pipes to agencies and organisations that get to make decisions about where the money flows, and therefore who gets the grey gifts on offer.
Sometimes these are bureaucrats, sometimes there are ‘independent’ agencies that make discretionary decisions about which companies will be investigated for fraud (ASIC), or what regulations will apply to which monopolists (the ACCC). In the NT the most powerful ‘independent’ body is the Development Consent Authority [DCA]. Where making the wrong decision provides inferior economic outcomes and incurs the extra cost of extending road, water, sewer and power infrastructure that needn’t have been done if public interest was considered instead. In the NT there are in excess of 85 statutory bodies that pay meeting fees as much as $959 per day but the really good rewards are found in chairing the half a dozen boards paid at Chairperson: $82 363, Deputy Chairperson: $63 356 and other member: $44 349 per annum.
[Details see: Remuneration of Government Boards]
And, when the new Chief Minister goes overseas to suss out ‘investment opportunities’, otherwise known as grey gifts, who does he take along to do the introductions?
Willem now a real diplomat
HAYLEY SORENSEN, NT News
October 28, 2016
FORMER Giles government minister Willem Westra van Holthe, who was sacked from his Cabinet positions over his role in a Vietnamese shares scandal, is spruiking his services as an “accomplished diplomat” who is “pursuing trade opportunities into South East Asia”. On his professional profile, Mr Westra van Holthe says he has “developed a practical understanding and application of legislation and policy” and talks up his “negotiation and critical conflict resolution skills”. His consultancy firm, Primary Consulting International, is one of 68 NT businesses making the trip to Rizhao, led by Chief Minister Michael Gunner. According to Mr Westra van Holthe’s Linkedin profile, he is an “accomplished diplomat with many contacts, both nationally and internationally”.
In 2010, Mr Westra van Holthe received a black eye during a dust up at a Katherine nightclub. Earlier this month, he made headlines when assault charges against his estranged wife Jennie were dropped. Ms Westra van Holthe was alleged to have struck her husband in the head with a lamp in October last year. The blurb provided to delegates at the Rizhao summit describes Primary Consulting International as a company which “provides linkages between Asia and Australia’s vast north, where Australian and Chinese interests collide”.
Other examples of Mates puting their snouts deeply into the corporate trough include:
Anna Bligh, former Queensland premier
The Labor politician led Queensland from 2007 to 2012, and was appointed CEO of Australian Bankers’ Association.
Sophie Mirabella, former Liberal frontbencher
After a failed bid to regain her seat of Indi in 2016, the conservative Liberal has been working as manager of government and media relations at Gina Rinehart’s Hancock
Prospecting.
Andrew Robb, former Liberal minister
The former trade minister raised eyebrows when he took up a role as an economic consultant for the Landbridge Group, the Chinese company that controls Darwin Port.
Nova Peris, former Labor senator
Following her controversial departure, she was named an advocate for indigenous participation in sport at the Victorian Department of Health and Human Services.
Martin Ferguson, former Labor minister
The former resources minister has enraged Labor by his former party. He’s now chairman of Tourism Accommodation Australia and has reportedly worked as a
lobbyist for the resources and energy sector.
Stephen Conroy, former Labor minister
The former senator raised eyebrows last September by resigning without telling acting Labor leader Tanya Plibersek. He did so again by to serve as executive director at Responsible Wagering Australia, a new industry body set up by the Australian online wagering industry.
Former Chief Minister Adam Giles secures new job with Gina Rinehart
GARY SHIPWAY, NT News
January 25, 2017
Australia’s richest business woman Gina Rinehart is to have a presence in Darwin and former Chief Minister Adam Giles will be it. Mr Giles has been appointed the General Manager of External Affairs Pastoral for Australia and he will be basing himself in Darwin.
The business presence of Ms Rinehart in Darwin has been welcomed by the NT Chamber of Commerce which says it will put a much needed national and international focus on Darwin and the Territory. “An office presence by Gina Rinehart in the Northern Territory’s capital, headed up by a former NT Chief Minister who has belief and commitment to the Territory is a good thing,” Acting Chamber of Commerce chief executive Brian O’Gallagher said.
It is no secret Mrs Rinehart had strong regard for Mr Giles when he was Northern Territory Chief Minister. He convinced Mrs Rinehart to consider building and $175 million state of the art cancer hospital and several potential sites have been earmarked. Since the Territory election talks on the hospital have stalled.
The worst crime there is in our society is to challenge the power of government. The public cannot choose not to be part of the elected governments rules, and cannot choose to obey the rules of an alternative government. And even after the infrequent political competition from elections, opposition political parties who do find electoral success will realise that to stay in power they must appease the piper, rather than the voters. Over time this leads to an implicit agreement between both sides of politics that electoral competition will avoid issues that seize back economic resources and use them for the public good. The evidence for this in political donations data, where most major donors donate to both sides of politics equally.
This lack of genuine competition in politics, and existence of discretion, is sometimes desirable because we want politicians to be able to react to new circumstances and take account of local issues, make long-term decisions, and represent our broader social values. Unfortunately this also identifies which areas of the economy are open to grey gifts. In resource sectors, where the product is freely provided by nature, who benefits from these resources is always the result of regulatory systems created by government which will necessarily be imperfect, and which will always involve the creation of some form of monopoly control over the resources.
Sunday Territorian
30 July 2017
Christopher Walsh
A LEGAL ruling could finally reveal how much Glencore has paid in a security bond for its McArthur River Mine site, after a long court process. Traditional owners have questioned for some time if Glencore paid the NT Government enough in the security bond to cover remedial costs on contaminated land near the mine site. The original bond was valued at $111 million in 2015, when the company was pushed to increase the value by the previous CLP government.
The government would not reveal then what the value they determined to be “significant” was. Some estimate the clean up could cost $1 billion. The new amount could be revealed in September if no objections over the NT civil and administrative tribunal’s decision are raised. Glencore previously fought to keep the amount secret. They said yesterday they are considering the decision. A Government spokesman said they would be happy to reveal the total and will do so if Glencore doesn’t appeal the ruling. “The NT Government will abide by the decision of the NTCAT and will release the information following the 60 day stay period,” he said.
The mine has come under controversy in the past 12 months amid allegations by workers they were exposed to toxic smoke for up to two years before safety measures were implemented to protect them. In April, it was revealed Glencore paid no royalties to the NT Government for its 2015 operations at the site.
Smoke on water as CLP candidate taps aquifer
Staff reporters
22 Mar 2013
A Country Liberal candidate for the Federal election has denied she has been given any favors in a Northern Territory Government decision to approve a water extraction license for her property. The Government has overturned a decision by the previous Labor government, which refused to allow Tina McFarlane to extract large amounts of water a year from the Tindall aquifer for use on her family’s Stylo Station property.
Territory Water Controller Dianne Leeder successfully argued Mrs McFarlane wanted access to five times the water being used by all others in the district. She said that would pose a risk to the Tindall Aquifer and the Roper River. In confirming that it has now granted Mrs McFarlane an extraction licence for up to 5.8 gigalitres of water a year, the Government said it did not agree with the previous assessment.
Treasurer Dave Tollner said former government representatives had been “puppets for some of the extreme greenies out there”. The North Australian Indigenous Land and Sea Management Alliance says it is concerned that a single Top End property has been granted such a large portion of water from an aquifer. The Tindall Aquifer near Mataranka is the main source of water for the Roper River during the dry season. Alliance chief executive officer Joe Morrison says the decision sets a risky precedent. “I think what’s being proposed here … represents about 30 per cent of the total consumptive pool available for commercial development; 30 per cent on one property is a lot,” he said.
The Opposition has accused the Government of doing favors for a mate. Independent MLA Gerry Wood has called on the Government to explain why it approved the water license. He says it has not been transparent about the issue. “The concern I’ve got is that, on the face if it, it looks like the Government has avoided due process,” he said. “(It) also gives you the impression that there might be some, what I call, party political nepotism here.”
The Amateur Fishermen’s Association of the Northern Territory (AFANT) says the granting of a large water extraction license could have a negative impact on the Roper River. AFANT executive officer Craig Ingram says he is concerned about the approval process. “We are really concerned about the Government allocating water when there are formal processes being put in place that aren’t being followed,” he said. “What we know, from the experience in southern states, is that once you over-allocate systems it’s very difficult to claw back water.”
Land Resource Management Minister Willem Westra Van Holthe says annual reviews of the Stylo Station license will ensure there is no impact on the Roper River. He says Mrs McFarlane’s association with the Country Liberals played no part in the license decision.
ABC Rural
Carl Curtain
25 March 2013
Northern Territory farmers, horticulturalists and pastoralists are angry over the Government’s decision to grant a large water license to Stylo Station.
Retired farmer Ian Baker has attacked the policy behind the decision, saying the license approval is a breach of proper process.”It reflects really poorly on the Minister’s competence to manage water resources in the Top End and it reflects really poorly on the Department’s competence. “To give that amount of water to one, single individual with no proven worth is really bad policy,” he says. “5,800 megalitres is more than double than what all of our big, successful horticultural farmers have got.”
Tina McFarlane, owner of Stylo Station, says there were no special favors done for her to receive the water license. Speaking with ABC Radio on Friday, McFarlane says her family has spent many years preparing the property for agricultural development. “We spent almost 14 years developing the property for irrigation.
NT Land Resources Minister Willem Westra van Holthe assured listeners there were no dodgy deals done with Stylo Station just because Tina McFarlane is a candidate for the CLP. “There’s absolutely nothing suss about this at all,” he says. “There’s been absolutely no political influence in this decision at all and I can put my hand on my heart when I say that.
The former owner of Stylo Station in the Northern Territory says her family sold the property because they did not have the money to develop it. Tropical Forestry Services (TFS) bought the 9,500 hectare Mataranka property last month from Lindsay and Tina MacFarlane, for a reported $5.5 million. The sale comes two years after the NT Government granted a controversial 5.8 gigalitre water extraction licence for agricultural development.
Tina MacFarlane, who is also the Country Liberals’ candidate for the federal seat of Lingiari, has hit back at claims she should refund any additional money received for the license. In her first interview since selling the property, Ms MacFarlane told ABC Rural it was a difficult decision for the family to let go of the land, which they had owned for 23 years. Since receiving the water license, she said they did not have the financial capacity to spend on farming infrastructure. “You need several million dollars to do a development, we are just not in the financial position,” she said.
The compulsory CTP system is a government sanctioned industry providing a public service considered necessary to underpin road safety, with special uncontested roles for the insurance company granted monopoly. If an industry is by its nature not competitive, some-one will find opportunities to extract grey gifts!
Submission to the Inquiry into the Privatisation of State and Territory Assets and New Infrastructure
The Senate inquiry into the development of Northern Australia, Pivot North heard evidence from a range of stakeholders about the importance of maintaining public ownership of key assets to future development. The approach of the CLP Government to sell off public assets is a short-term strategy and politically motivated to fund the government’s re-election campaign, in the absence of any demonstrated capacity to drive economic growth for the future of the Territory.
The sale of these assets foregoes the future financial returns at a time when the Territory economy has been positioned to leverage off the growth underpinned by the nation’s second largest private investment, the Ichthys LNG project. The current agenda of the CLP Government indicates privatisation of the port, essential services, our prisons and new hospital will occur in the absence of a mandate.
There is also no evidence the CLP Government has considered the broader community and business impacts, including the development of Northern Australia. In no instance has the CLP Government provided detailed business case analysis or an engagement process with the community.
The report, ‘Pivot North’, recommended expanding TIO across Northern Australia because “it is affordable and consistently available” and would address their insurance crisis. Warren Entsch MP publicly stated he warned the CLP Chief Minister against the sale of TIO:
“I was concerned that by selling it we would end up in the same situation we are in the rest of Northern Australia where Government institutions, or institutionalised entities, like the state government insurance office for example in QLD, basically lost any concept of community obligation or community service and we’ve seen an absolute disaster in relation to market failure and what is clearly market gouging”
Hon Warren Entsch MP. ABC Radio 12 November 2014.
Helen Davidson
The Guardian
Last week the CLP-majority parliament endorsed the selloff. Giles has said the government is just responding to TIO’s calls for help with liquidity, but remarks from Harding [TIO chief executive] on Thursday suggest the government may be driving the sale. “My job is to ensure the best outcome for our shareholder, and if the shareholder has made that decision [to sell], we support it and drive it forward for them,” he said. The board of TIO opposed a sale in 2006 when the then-Labor government put it forward, but supports it now after several years of growth.
“The government of the day has a responsibility to the people to protect public assets, particularly where monopolies exist in small jurisdictions,” the opposition leader, Delia Lawrie, said in a statement. “Public assets like TIO belong to Territorians, not the government. If a government has a case to sell a public asset in the best interests of the community, where there has been a cost-benefit analysis, they should make that case to the voting public and win their mandate to sell. “The CLP have failed to consult with the public and they are arrogantly pursuing a behind-closed-doors sell-out of assets that belong to Territorians.”
Lawrie also called for the government to reveal if the selloff plans included any clause which would prevent the federal government setting up a TIO style insurer in the territory in the future. The NT chamber of commerce found 51% of its members opposed the selloff, and just 24% supported it. Their main concerns were around the potential for increased premiums, particularly for small businesses, the chamber of commerce’s chief executive, Greg Bicknell, told Guardian Australia, members “accepted that the government has very few assets available to take advantage of the asset recycling scheme offered by the federal government” and Harding’s revelations that the equalisation policy was going to “disappear anyway” might alter opinions. “People are very concerned about the rises that are being experienced in north Queensland and that we would have the same thing happen here,” he said.
Australian Associated Press
Monday 24 November 2014
Australia’s last government-owned insurance company has been sold by the Northern Territory for $424m. The Territory Insurance Office (TIO) will be split in two, with Allianz taking over the insurance business and People’s Choice running the banking component. The government would not say how much each business was worth, citing commercial-in-confidence reasons. It has retained the Motor Accidents Compensation (MAC) arm. If this business had been included TIO’s total value would have been $609m, the government said.
Of the $424m sale figure, $215m will be invested into an infrastructure development fund, $9m will go to the sale costs and the remaining $200m will be used for community development. The government denies the latter will be used as a pork-barrelling fund for the 2016 NT election. “This is Territorians’ money. We are fixing TIO for the future of the Territory. The money that is realised is for Territorians,” chief minister Adam Giles told reporters. He didn’t think the sale, which was opposed by nine out of 10 people in an NT News poll, would lead to the Country Liberals ending up a one-term government.
Of course the proceeds of Government owned assets were made available to Mates in various guises: The North Australian Infrastructure Facility [NAIF] composed primarily of mates in the mining industry and former members of the party, including:
Ms. Sharon Warburton, has held Senior Finance roles at a variety of construction, mining, resources, real estate and infrastructure sectors, proving that not all the Mates are male.
Mr Barry Coulter is a former member of the Northern Territory Legislative Assembly, serving for 16 years. During this time he served as Deputy Chief Minister and in a range of portfolios in the Northern Territory Government, including as Treasurer
Northern Australia fund board risks legal action over Adani loan
Directors of the Northern Australia Infrastructure Facility are likely to be in breach of their duties if they approve a controversial $900 million government loan for a railway to serve the Adani coal mine, and face possible legal action, according to legal advice received by the Australian Conservation Foundation.
Lawyers at Environmental Justice Australia wrote to the directors of the NAIF on Tuesday sharing legal advice that the loan would put the directors personally in breach of duties to consider the financial risks associated with climate change if they make an investment decision in support of the Galilee Basin rail project. EJA’s advice concludes that under the Public Governance Performance and Accountability Act 2013 NAIF directors must consider financial risks from climate change and that the requisite standard of care and diligence prohibits investment in the proposed Adani and Aurizon rail projects. The legal advice from the conservation group reflects the issue of directors’ fiduciary risks associated with climate change – and the subsequent risk of stranded assets – that is now affecting directors in the private sector, particularly the financial sector.
These risks have become more obvious in the wake of comments by Australian Prudential Regulatory Authority executive director Geoff Summerhayes in February in which he referred to a sub-2 degree climate change scenario analysis as the new normal for all APRA regulated entities. ACF president Geoff Cousins said on Tuesday that the ACF “will consider all avenues, including possible legal options, to halt the most destructive coal mine in Australian history and protect the Reef”. “NAIF must consider climate risks”, he said. “These are assets that will be useless within a decade. Investment in coal infrastructure risks public money and in the meantime helps to drive dangerous global warming. NAIF directors who support it should be held liable.”
The advice notes that the NAIF “can only support projects that would not otherwise proceed or be significantly delayed”. “So, in applying for NAIF support, both proposals at the outset must not be economically viable. The board must tread a thin line that, on the one hand, supports the expectation of full repayment and, on the other, assesses each project as non-viable without NAIF support and offers concessions favouring Commercial Financiers. A heightened, and precise, standard of diligence and care is therefore required.”
North Australia Fund linked to corruption.
NT News 12 August 2017
Daniel McCulloch
A $5 BILLION body set up to finance major projects in Northern Australia has been likened to something only seen in third-world countries where corruption is rife. Corporate governance expert Thomas Clarke says he has searched Australia and overseas for similar examples of bad practice to the Northern Australia Infrastructure Facility and cannot find any in advanced industrial countries. “Both the corporate manoeuvres behind the major proposal were apparently not being able to consider [Adani railway loan) and the public governance of the NAIF resemble a third-world country struggling to develop where corruption is apparent in both its corporate sector and its public sector,” Professor Clarke told a Senate inquiry. The inquiry is investigating the governance and transparency of NAIF and processes used to appoint its board members, including whether there’s been assessment of potential conflicts of interest.
Professor Clarke said it was unheard of for a publicly-funded body to operate in such conditions of “absolute secrecy”. NAIF has been plagued by allegations of conflicts of interest among its board members, with Labor calling for one director, Karla Way-McPhail, to be sacked. The most controversial project being considered by the facility is an application by Indian resources giant Adani for a billion dollar loan to build a rail line linking the proposed Carmichael mine to port.
“Undoubtedly, if the NAIF funds this Carmichael rail project, it will become renowned as the government-funded billion-dollar ghost train,” Professor Clarke said. “A useless waste of taxpayers’ money to enrich a company based in the Cayman Islands which the Australian public will not forget or forgive.” His concerns stretch beyond fears the project may prove a financial and energy disaster. “It will also announce to the world the poor standards of public governance that allowed this disaster to occur, and used taxpayers’ money to fund it,” Professor Clarke said.
getupsolomon 