The Salvo's, Fabian Society, frontline altercations, Rupert in OZ, McCrann garbage
July 28, 2008
Here are Stephen Mayne's five stories from the Crikey edition on Monday, 14 November, 2005.
6. The privileged position of The Salvation Army
By Stephen Mayne
Further to Friday's item about the need for Australia to follow New Zealand's lead and establish a Charities Commission, some fascinating correspondence about The Salvation Army has arrived at the Crikey bunker.
It seems today's Salvation Army is not “The Salvos,” esteemed by soldiers in two World Wars. Instead, The Salvation Army is now a commercially-driven organisation motivated by money, which can be quite ruthless with its staff and enjoys a privileged relationship with the Federal Government.
The Salvation Army's Employment Plus division is the largest player in Job Network, a multi-billion dollar Federal Government initiative. It receives about $250 million a year for its efforts, some of which disaffected former staff believe is squandered on large salaries, entertainment and other benefits for senior management. However, being a church, Employment Plus is not accountable to anyone in relation to its fiscal affairs and competes with private operators in the Job Network who must pay full tax.
Furthermore, because of its non-taxable status, its employees are able to benefit from a ‘salary packaging' scheme whereby up to 30% of their income is tax free. This costs the Australian taxpayer millions of dollars every year. It also gives Employment Plus a huge advantage over its competitors.
Then you have the windfall gains from sale of the Salvation Army's retirement villages. These were largely set up in the 1950s and 1960s when the Federal Government paid one third of the cost, the relevant State Government paid one third and one third was paid by The Salvation Army who then owned and operated the institutions. Many of these villages are on prime real estate which The Salvation Army has held free of rates and taxes for the best part of fifty years.
The Salvation Army sold 14 of these properties to a Macquarie Bank vehicle for an estimated $120 million earlier this year and is examining further sales, all of which will be completely tax free. Shouldn't The Salvation Army repay one third of the proceeds of these sales to the Federal Government and another third to the State Governments, which could use these funds to provide alternative retirement accommodation? If not, why not? After all, it was taxpayers' money.
Gough Whitlam's former private secretary Race Matthews claimed on Saturday at the Fabian Society's national policy conference that the Howard Government has systematically used contracts such as the Employment Plus deal to effectively silence churches and not-for profit groups.
However, outspoken commentary by church leaders on the industrial relations legislation suggests they are not completely compromised, especially in areas where they have no commercial dealings. That said, it would be interesting to look back at the public positions taken by The Salvos over the past few years.
The Salvos raised a record $53 million in last year's Red Shield appeal, but few donors would appreciate that they are Australia's fourth biggest church with 2004 revenues of $625 million.
10. The Fabians get professional
By Stephen Mayne
The Fabian Society put on a ritzy two day policy conference in Melbourne last week which marked a substantial change in direction for the left-leaning think tank. Crikey spoke on one of four concurrent panels that ran on Saturday afternoon. Our topic was "Accountability and transparency: who do we trust and what can we know?" and it included former NSW Auditor General Tony Harris gloomily declaring that he had not seen a single step forward in federal accountability and transparency over the past 35 years.
The gathering at William Angliss TAFE was certainly very different to the last Fabian Society talk I gave a few years back slamming Jeff Kennett in a cramped little room at the Victorian Trades Hall building in Carlton.
Former Looksmart founder, Fabian Society national secretary and aspiring Labor MP Evan Thornley has been one of the driving forces behind the change and gave an interesting closing address to the conference on Saturday afternoon.
He identified "culture" as the biggest challenge facing the ALP but then said rather than whinge and moan about the lack of new ideas coming through, it was much better to try and do something about it by organising a major conference featuring the largest collection of "progressive thinkers" assembled in many years.
Professional conference organisers were employed, every session was captured on video and there are plans to produce a DVD with conference highlights plus a CD-Rom with the text of many of the presentations. The Fabians have traditionally been Melbourne-centric but next year's conference will be held interstate as part of an ambitious national agenda.
Attendees seemed particularly upbeat after the conference, although one Labor MP said there were "too many Marxists" and everyone agreed the "gender balance" of the speakers needed to be addressed. It was great to get Bill Shorten, Robert Manne, John Faulkner, Terry Cutler, Kim Carr, Julian Disney, Wayne Swan, Barry Jones, Greg Combet, Michael Keating and many others speaking, but where were the Labor women? Penny Wong, Heather Ridout and Tricia Caswell snuck onto a couple of panels, but that was about it.
The media didn't show a lot of interest which perhaps reflected the frenetic news agenda last week and the fact that political hacks don't usually work on Friday afternoons and Saturdays. However, there was certainly plenty of newsworthy declarations as various Labor heavies weighed in to what was at times something resembling genuine debate. Heaven forbid!
19. Hack attacks: five more altercations from the frontline
By Stephen Mayne, a yet to be physically attacked hack
This list of media attacks is proving to be both entertaining and worrying – but the Nick Grimm story below is particularly amusing. Keep them coming to smayne@crikey.com.au and check out this full compilation of the list on the site here, plus the latest five:
Dean Felton (again): Our crew was waiting to get pictures of a teenage girl who'd been charged with very effectively torching a state school. She was leaving the Holland Park Magistrates Court in Brisbane via the underground car park following her bail application, when her brother drove in to pick her up. It was bad enough when he drove the car at the assembled media scrum to scatter us. But then he got out of the car and bravely started shoving around my five-foot-two female camera operator (ignoring male crews from the other networks, who chivalrously continued to film the unfolding drama). Uncharacteristically, I stepped in, in an attempt to protect her, but got my head bashed against a concrete pillar for my trouble. At that delicate stage of negotiations, uniformed cops swarmed out of the building, subdued the bloke (I recall him as HUGE – naturally) and offered to charge him, an offer I declined.
Campbell Fuller and Sylvia Tuz: In November 1992, after Jeff Kennett swept aside the Kirner government, Joan's former treasurer Tony Sheehan told The AFR that Victoria's economic mess was partly because Cabinet had refused to heed his Budget strategy. He then went to ground on Wilsons Promontory, sparking a large media hunt. After 24 hours, an ABC crew finally found him jogging down the main street of Sandy Point in his Speedos, and lost him when he left the road. But Fuller and his pint-sized Herald Sun photographer, Sylvia Tuz, managed to get in front of Sheehan as he headed for the beach, hoping he would stop for a short interview. But Sheehan deliberately barged into them and then pushed over Tuz, leaving her shocked and shaken. He then ran along the beach in the pouring rain for several kilometres to escape the pack of 20 reporters, photographers and camerapersons who had swept into the sleepy hamlet.
Nick Grimm: Back in early nineties when the ABC 7.30 Report's Grimm was (briefly) an eager young reporter on the Hinch program at Network Ten, he received a fast lesson about the dangers of the television "walk-in." It was for a story about the illegal dumping of toxic chemical waste into landfill beneath a new residential development. Unfortunately, he had been given the wrong address for the alleged wrong-doer. He and his crew walked in, camera rolling, only to be set upon by the very angry inhabitants (one wielding an iron bar). Fortunately for the camera crew concerned, Nick bore the brunt of the attack, which left him slightly bloodied, and his new suit torn. Overcoming his injuries, the embarrassed and highly-apologetic Nick Grimm managed to persuade his assailant not to prosecute him for home invasion. Needless to say, the footage of the incident was never shown.
Kevin May: The ABC cameraman was poked and pushed by Kerry Packer at a polo match in the 1980s.
Jeremy Thompson: Who could forget when Max Ortmann, then Member for Brennan in the NT, choked ABC reporter Jeremy Thompson with a microphone cord during an interview? In fact, Thompson's memorable account of the incident appeared in the second first edition of Crikey on February 20, 2000.
24. Who would Rupert meet over ten days?
By Stephen Mayne
It has been many years since Rupert Murdoch spent ten days in Australia, which raises the question: why is spending so long away from News Corp's head office and the family in New York?
Some of his activity in Australia is known, such as the 75 minute earnings conference call from Sydney last Friday, yesterday's sculpture award with his mother in Melbourne and this Wednesday's shareholder information meeting in Adelaide, but what else is he doing here? Having watched the Sun King for years, here is a punt on the people he's been meeting and the things he has been doing:
The Packers: Relations seem to be pretty good at the moment but with changes to media ownership laws and the C7 case, there would have been plenty to discuss with both Kerry and James in Sydney last week.
Helen Coonan and John Howard: Whilst Rupert caught up with John Howard in Washington two months ago, the ongoing media ownership law debate would be a high priority during this trip as the government fine tunes its policy.
C7 Case: This would possibly have taken up more time than anything else during his visit. Noel Hutley SC and key executives like Ian Philip, will have briefed Rupert extensively on tactics and the outlook after Justice Ronald Sackville ordered the parties to go away for a week and consider settling the most expensive corporate dispute in Australian history.
Lachlan: While Rupert saw Lachlan at the AGM in New York last month, it was a good chance to also catch up with Sarah and baby Kalan, who turned one on November 9. Kalan would have a special place in Rupert's heart as he is the only grandson carrying the Murdoch name into the future.
Mum: plenty of quality time was spent with Dame Elisabeth during the only weekend of the ten day visit.
The Macleods: Rupert's daughter from his first marriage, Prudence, relocated from London to Sydney a couple of years ago and her husband, Alasdair Macleod, is running the Sydney suburbans and represents News Ltd on the realestate.com.au board. Therefore, it would have been a good chance to catch up with business and family, including their three children, James, Angus and Clementine who range between 9 and 14 and are included in the inheritance.
Sol Trujillo: The new Telstra CEO would also be a high priority given the Foxtel shareholding and Telstra's plan to embrace broadband television directly down the track, thereby possibly undermining Foxtel.
Morris Iemma: The new NSW Premier and Treasurer would be high on the list, especially after his Government turned a blind eye to Rupert's Bermuda tax dodging which cost NSW taxpayers up to $50 million.
David Pemberthy: the new editor of The Daily Telegraph was very much backed by Lachlan, so Rupert would have been keen to go through his paper and get a feel for his talents.
Piers Akerman: one of Rupert's oldest friends in Australia usually gets a good airing, and occasionally a sail on the harbour, with his ever loyal boss.
Peter Costello: this is a smokey but the Sun King might not be back before a challenge from the Treasurer and backing from Australia's most powerful mogul would be important. Costello is notoriously close to James Packer and the Sun King would also be annoyed that he never got the tip from Costello about John Malone's attempts to buy more News Corp shares more than two years ago.
Simon Pristel: Whilst all editors and publishers in Melbourne, Sydney, Brisbane and Adelaide would be likely to get an airing during such a long visit, new appointments are usually higher on the priority list so the new Sunday Herald Sun editor is probably having a meeting with the Sun King today.
Realestate.com.au takeover: Securing final board agreement for the News Ltd takeover is another obvious for the Sun King to resolve whilst here. The original $2 a share offer was lifted to $2.50 but still the independents are holding out.
Internet update: Plenty of time would have been devoted to briefings on the progress of various News Ltd arms on their embrace of the internet.
25. Terry McCrann's governance garbage
By Stephen Mayne
Back in my days at News Ltd, section editors and above would often put in a big effort to produce something special when they knew that Rupert Murdoch was in town and would probably actually look at their work.
I can remember former HWT editor in chief Steve Harris telling current Herald Sun chief of staff Damon Johnston that Rupert would read every word of a page three story he did attacking gambling. Rupert hated the growth of gambling in Australia because it meant less spare change to pick up a newspaper or take out a Foxtel subscription.
With Rupert Murdoch about half way through a 10-day visit to Australia, it is worth reading his newspapers with this in mind, especially tracking where he will wake up each day. He spent yesterday in Melbourne catching up with his mother and awarding a sculpture prize which was written up in most papers this morning. Tomorrow he will head to Adelaide for the first ever News Ltd awards for editorial excellence before Wednesday's "shareholder information meeting" at The Advertiser which Crikey will be attending.
Terry McCrann's column in The Weekend Australian was a classic in the "what would Rupert like to read" category. The headline was "Playing by the rules is for fiscal losers: the figures don't lie" and the sub-head "Good corporate governance is harming many companies"
The column opens as follows:
Investors can take their pick. They can have "good corporate governance." Or they can have good performance – faster rising share prices and higher dividends. Indeed, not just good, but dramatically better performance."McCrann and Gold claim that because a group of stocks with nominal bad corporate governance have out-performed the broader index over the past five years, it pays to have bad corporate governance overall.
That's the persuasive conclusion of a comprehensive research exercise into investor returns and financial performance of Australian stocks by Martin Gold of the Sydney Business School.
The Weekend Australian reported on this research two weeks ago. Tellingly, it has been met with deafening silence, as it fundamentally challenges the absolutely core tenets of corporate governance in Australia.
This is a complete joke because it is so easy to pick your stocks over a certain period. The last five years have seen an extraordinary boom, so what about going back a little bit further and looking at the corporate governance practices over the years?
Alan Bond, Christopher Skase, John Elliott, One.Tel, Adsteam, HIH and many other fallen or challenged companies had appalling corporate governance that magnified the eventual pain for investors and creditors.
Good corporate governance is essentially about protecting investors when things get hairy. Remember Conrad Black, who got away with thieving for years due to the sycophants on his board? It is designed to stop things like what Rupert Murdoch did when he and News Corp almost went broke in the late 1980s.
Three days after the 1987 stockmarket crash, the Murdoch family company sold 42 million News Corp shares to Queensland Press, which was 56% owned by News Corp and 44% owned by the Murdoch family. Queensland Press shelled out a whopping $671.5 million paying $16 a share when the stock had plunged to as low as $8.50. Others have gone to jail for similar uncommercial related party transactions which would never happen at a company with good corporate governance.
McCrann's Saturday column is not online but his Sunday effort was better than usual and Rupert would have been impressed before what is probably a meeting at the Herald Sun offices today. No one else in Australia produces a column six days a week so McCrann should be allowed one slapped together effort and that's usually for the Sundays.
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