Election wash-up, Dean Paatsch farewell, reform wish list, pokies operator loses, ASIC jail list, Cornwall, $100m loss club, Rich List and political staffers
August 24, 2010
Dear Readers,
The election is over and it will be nice to take off the candidate hat and become an independent commentator again. First off today, let's consider some commentary from our cartoonist Mark Cornwall on the faceless men of the Labor Party and what they'd love to do to Kevin Rudd:
How the numbers stacked up in Senate tilt
Whilst the result in our Senate tilt of just 0.15% was obviously disappointing, the positive spin is that we did beat 10 of the 23 candidates in the field.
Here's how the rather large field in the Victorian Senate race are ranked on primary votes, according to the latest from the AEC website:
1. Coalition: 34.29%
2. Labor: 38.66%
3. Greens: 14.36%
4. Family First: 2.68%
5. Democratic Labor Party: 2.23%
6. Australian Sex Party: 2.23%
7. Liberal Democrats: 1.65%
8. Shooters and Fishers: 1.33%
9. Australian Democrats: 0.48%
10. Christian Democratic Party: 0.38%
11. One Nation: 0.36%
12. Socialist Equality Party: 0.28%
13. Stephen Mayne: 0.15%
14. Building Australia: 0.14%
15. Carers Alliance: 0.14%
16. The Climate Sceptics: 0.14%
17. Independent Joe Toscano: 0.1%
18. Secular Party of Australia: 0.1%
19. Socialist Alliance: 0.09%
20. Senator On-Line: 0.08%
21. Citizens Electoral Council: 0.07%
22. Grant Beale: 0.02%
23. Glenn Shea: 0.01%
Election day was lots of fun as Paula and I toured 30 booths spanning from a dozen in the now Green seat of Melbourne, all the way up to Broadmeadows in Melbourne's north.
It was great to finally meet fellow Ivanhoe Grammar old boy and federal speaker Harry Jenkins at Thomastown Secondary College, which is one of the biggest booths in Australia. This was the only booth where we encountered a DLP volunteer in the form of highly regarded Moreland councillor John Kavanagh. Lo and behold, the DLP appear to have won the sixth Senate seat.
We chatted to Greens MP Adam Bandt at a booth in North Melbourne where he was being supported by former Labor Lord Mayor Kevin Chamberlin. The mood for change in Melbourne was palpable and former ALP state secretary Stephen Newnham is now pushing research showing the Greens will win up to 12 seats in the forthcoming Victorian election.
Newnham has an interest in scaremongering about the Greens because his wife Fiona Richardson stands to lose her seat of Northcote at the coming state election, something the Herald Sun did not disclose in this story pushing the Newnham analysis.
Spinning a bad result
As Australia's most unsuccessful candidate, I'm better equipped than most to recover from a bad election result. That said, you do still go into a funk the day after an election and it wasn't until two interviews on Sunday night that the mood started picking up.
Have a listen to the chat with James O'Loughlin nationally on ABC local radio at 7.50pm, plus the 10 minute chat with John Safran and Father Bob Maguire at 9.50pm on Triple J. Here's the spin to James:
James O'Loughlin: How did you go? Independent senate seat in Victoria.
Stephen Mayne: The best thing I can say is that I beat 10 other candidates, but 0.15% is not something to crow about James, I have to say.
James O'Loughlin: Are you relieved secretly? Did you really want to win?
Stephen Mayne: Oh no. I didn't want to win at all. I am Australia's most unsuccessful candidate, so the Senate was the last thing for me to run for. I've now run for everything possible in politics. Lower House, upper house, state, federal and council.
James O'Loughlin: Have you ever got close?
Stephen Mayne: I am on council in Melbourne, on Manningham City Council. I love to experience elections. I have contested 50 different elections over the years, in corporate elections and political elections, and I love to compare the experience of elections. It's nice to do okay, but I have never gone as worse as yesterday, but it was still good fun.
A number of people commented that it was difficult to find us on the ballot paper courtesy of the rules which don't allow grouped independents to have any branding above the line.
Party names are clearly very important. How else do you explain the Australian Sex Party scoring more than 2% of the vote nationally in the senate. It also helps to have either Liberal or Labor in your name as the little known Liberal Democrats scored 1.6% and the Democratic Labor Party exceeded expectations with 2.23%. The name Family First is also a smart piece of political branding. How can you argue with putting families first?
Being on the far right of the enormous ballot paper was also a problem but even where we handed out how to vote cards, the vote was disappointing so we'll give some serious thought over the coming weeks on earlier plans to contest the forthcoming Victorian election.
Major steps forward in the anti-pokies campaign
Whilst the personal result was disappointing, there are plenty of things to like about Saturday's results as far as the anti-pokies campaign is concerned.
Firstly, pokies operator Julian McGauran appears most likely to lose his Victorian Senator seat to either the DLP or Family First. 100% of my 3712 primary votes (excluding postals) went to the DLP and Family First ahead of the Coalition because both of these smaller conservative parties have very strong positions against the pokies.
The Age's Tim Colebatch explained all the numbers in the Victorian Senate race yesterday and Senator McGauran has lost because Labor achieved its best two party preferred result ever in Victoria, as George Megalogenis opined in The Australian.
Similarly, the Greens position is strengthened and they are strong critics of the pokies. In addition, former Greens candidate turned independent Andrew Wilkie has explicitly campaigned to have pokies banned right across Tasmania and his vote may be vital if Labor is to form a minority government.
Throw in Bob Katter's fervent attacks on Coles and Woolies for abusing their power over farmers and the 12,000-strong Woolies-Mathieson pokies joint venture could come under further pressure.
Anyway, it was a remarkable day in Australian political history on Saturday and thanks again for following the anti-pokies push over the past few weeks.
Click the link below to hear the two Sunday night ABC radio interviews through our audio podcast:
The Cornwall collection and Tony Abbott
Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing to The Mayne Report since March 2009. Here is a collection of his best cartoons and there are now also some amusing animations. Below is his post-election take on Tony Abbott:
Political reform wishlist
The hung parliament is throwing up stacks of great suggestions for reform from the independent candidates and various other players. Here are a few personal favourites:
* Whoever forms government shores up their numbers by poaching some top talent from other side (ie Turnbull to be Gillard's Treasurer or Garrett to be Abbott's Climate Change minister)
* Support Malcolm Turnbull's call for union and corporate donations to be banned
* An independent debates commission to handle three televised election debates each campaign
* A proper independent election costings process answerable to the parliament not the government
* Fixed three year terms to end all the useless early election speculation
* A move to optional preferencial voting as occurs in some states to reduce informal voting
* A Federal independent corruption fighting body to support Andrew Wilkie's call for "ethical government"
* Rob Oakshott's call for individual MPs to be allowed to put up legislation
* Lower the threshhold for public funding from 4% of the vote to 1% to reduce barriers to entry
* Implement the Productivity Commission's recommended $1 maximum bet on the pokies
Australia's top corporate governance campaigner exits stage left
After 13 years kicking around the public company AGM space as a shareholder activist, I've got to know most of the players in the corporate governance space.
No one has done more to advance the cause of good corporate governance than proxy adviser Dean Paatsch, so it was a shame to read the following press release yesterday:
ISS acknowledges departure of Australian co-founder
The co-founder of governance advisory firm ISS' Australian operations, Dean Paatsch, is leaving the group after six years with the business.
The head of ISS, Steve Harvey, said that Mr Paatsch had made a substantial contribution to ISS' governance business and the Australian governance landscape.
"Dean has played an integral part in the success of our Australian business and he will be greatly missed," Mr Harvey said.
Mr Paatsch said that after six years with ISS and its predecessor firms, his neighbours will be relieved that he is planning to finally finish rebuilding his front fence while he takes a career sabbatical. He will spend the forthcoming AGM season trying to swim 1000 very slow laps at the Brunswick Pool.
"It has been a privilege working with the talented ISS team in Australia and to have made a small contribution to the protection of investors' interests," he said.
The Australian governance research team will continue to be led by Martin Lawrence and Simon Connal, with Alyssa Thai taking on increased client responsibility.
Mr Harvey said the strength of the Australian team built by Mr Paatsch and a well-prepared handover plan meant local clients would suffer no disruption as a result of his departure.
Mr Paatsch joined ISS in 2005 when it acquired Proxy Australia, a governance advisory business he co-founded. ISS itself was acquired by RiskMetrics in 2007 and operated under the RiskMetrics name until 2010, when RiskMetrics was acquired by MSCI and changed its name back to ISS. Following his departure, Mr Paatsch will no longer be confused about how to answer the phone.
Below is a picture of Dean's house, which clearly needs some work:
Of all the mainstream business journalists in Australia, no one has covered the governance arguments espoused by the likes of Paatsch more thoughtfully than The Australian's John Durie so it was good to see he gave him this send off in today's paper.
The game changer in Australian corporate governance came in 2005 when global proxy advising power house ISS bought Paatsch's business Proxy Australia and Peter Costello introduced the non-binding vote on a remuneration report.
This delivered Paatsch enormous power because most offshore institutional investors slavishly follow ISS recommendations around the world.
Whilst Proxy Australia and its then locally owned competitor Corporate Governance International would both often recommend against resolutions, too often they were just ignored.
Suddenly, Paatsch's recommendations were being followed and remuneration reports at the likes of Oz Minerals, Telstra, Toll Holdings, Boral, Transurban, Qantas and Wesfarmers were getting smashed.
The key point about Paatsch's performance is that he used the power well. Quality reports combined with savvy media and political work saw many important changes in corporate governance, culminating in the Rudd-Gillard government adopting most of the Productivity Commission's recommendations on executive pay.
The likes of Telstra and Macquarie Group would never have changed their pay practices if Paatsch hadn't taken them on. Similarly, Paatsch did some great work taking on the likes of Allco and Babcock & Brown during the boom when the financial engineers were ascendant.
The departure of former ABC Learning chairman David Ryan as Transurban chairman last week and this ground-breaking report on Australian capital raisings were the final feathers in the cap for Paatsch before he exited the stage.
The Australian produced this positive feature on proxy advisers last Saturday and it is good to see Martin Lawrence is succeeding Paatsch given that he is regarded as one of the finest governance analysts in the world.
Chartwell scalp a rare ASIC jailing highlight
The Mayne Report's ASIC jail list highlights what a slack job the corporate plod has done over the years locking up white collar crooks but it was pleasing to see some accountability for the Geelong-based Chartwell fraud as follows last week:
19 August 2010 - Mr Ian Rau, of Footscray Victoria, the former company secretary of Chartwell Enterprises was sentenced to two years and seven months imprisonment on eight charges. He is to serve 18 months jail before being eligible for parole.
Profit season produces new additions to $100 million loss club
A then record 29 ASX-listed companies reported losses of more than $100 million in 2007-08. In the wash-up of the GFC, this figure ballooned to a staggering 52 companies in 2008-09.
That's a pretty amazing statistic given that we had previously only found 75 companies that had achieved that milestone more than 150 times over the 20 years to 2006-07. Check out where they rank in this league ladder of corporate disasters, plus this chronological version.
The past week has seen the following new additions to the $100 million loss club but in this post-crash environment they are the exception to the rule:
Goodman Group: the industrial property giant came back from the brink with a monster capital raising but still delivered a $562.6 million net loss in 2009-10, largely due to one-off write-downs.
Paperlinx: reported a net loss of $225.3 million in 2009-10, largely thanks to write downs of $170.3 million related to its struggling Tasmanian operations.
The big debt issues continue right up until election ever
The Liberal Party's election day bunting in Victoria featured red messages about Labor borrowing $100 million today.
They could have been cheeky and said the government borrowed $700 million the day before because that's precisely what they did according to this list which tracks all bond and treasury note issues by the Labor Government since it was elected in November 2007.
Reserve Bank governor Glenn Stevens recently claimed: "There is virtually no net public debt in the country at all in contrast to much of the developed world."
This is just bizarre considering the Federal Government's own debt management website now puts the gross debt figure at $151.5 billion and then have almost $200 billion of state debt to consider.
Labor's Queensland electoral wipe-out was driven in part by the Bligh Government's proposed $15 billion privatisation program. Nothing was flagged before last year's state election but then the burden of a $30-billion plus borrowing program in the current term became overwhelming as Queensland Labor decided it did not want to follow the lead of NSW and lose its AAA credit rating.
If anyone needs assistance on federal debt questions, the latest bond issues are as follows and you'll note that interest rates are still north of the 4% assumed in last year's budget papers:
Friday, August 20, 2010: $700m tender of 6 year bonds expiring in June 2016 were sold for an average yield of 4.68% and was over-subscribed 3.1 times.
Wednesday, August 18, 2010: $500m tender of 12 year bonds expiring in July 2022 were sold for an average yield of 5.06% and was over-subscribed 4.5 times.
Donate to help keep us going
The Mayne Report costs almost $100,000 a year to run and we moved to a free model in June last year. It has been nice to receive more than $10,000 worth of donations from generous supporters over the past year and if you fancy helping fund our activism to keep us going on the political and AGM circuit, just click on the image below:
Tracking former federal government staffers
We're still tracking former political staffers in Canberra since Bob Hawke's election in 1983. Updates rely on emails to Stephen@maynereport.com or use of the anonymous tips box.
There have been a few updates so check out the three lists below and send through any corrections or feedback:
Tracking the former Hawke Keating staffers
Where Howard staffers finished up
Where Rudd government staffers went
The Mayne Report Rich List
BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised. Below are our latest new or updated entries:
Mitch Corn: leader of the development company Beville Corp which last week re-opened the huge Top Ryde shopping centre complex in John Howard's old seat of Bennelong.
David Same: his father Saul Same founded the Gloweave empire in Melbourne and also pioneered fundraising breakfasts for Melbourne's Jewish business community with the Labor Party in the 1950s, as The Age reported shortly before the 2010 election.
Cornwall on the leaks
Tales from the talk circuit
The Australian Investors Association national conference on the Gold Coast in late July was an interesting three day affair. I was given the final hour to rave away about governance and the feedback was the sort of thing you need to read when attempting to pick yourself off the mat after a terrible result in the Federal election. Here's what has been added to our speeches feedback section:
Stephen
The evaluations from our recent AIA National Investors Conference indicated that this recent conference was one of our best ever, in no small part attributable to your contribution as a presenter.
As you may be aware all delegates were asked to rate all speakers out of 5 for both content and presentation. I thought you might be interested to know that you scored 4.75 for content, 4.8 for presentation and overall rated 9.54 which ranked you as the top speaker overall.
Our delegates are quite critical so this is an excellent result. Congratulations.
Once again, on behalf of the AIA, my sincere thanks to you for your time and effort in preparing a very informative presentation for our AIA National Investors Conference.
Many thanks
Silvana Eccles
Executive Officer
Sign up for campaign and governance Tweets
Click on the image above to join more than 2000 followers on Twitter. Here are some of the more recent tweets:
6.44pm August 20: Transurban today appointed Bob Officer to replace David Ryan on board. All blokes board appoints another old white finance guy. Hopeless.
6.37pm August 20: Record pre-poll just closed on eastern seaboard. Were big queues at 565 Bourke St over last 90 minutes. Felt like a Green win in Melbourne.
12.48pm August 20: Here is council's press release condemning Labor's call in of donor Dadon's project: http://portphillip.vic.gov.au/releases_may09_2865.htm
12.45pm August 20: Tim Matheson's boss Albert Dadon claims his deals follow process. Hmmm, 568 St Kilda Rd was called in by Madden 1 week before VCAT hearing.
12.13pm August 19: Slipped a how to vote card into McGauran family's East Melb pad this arvo. Enjoyed a nice dinner there in 1990 - won't be invited back soon!
11.07am August 19: Just sent campaign missive on donations, pokies, media bias, Tim Matheson and likely defeat of Senator McGauran: http://www.maynereport.com/
8.30am August 19: What is it about $US38bn Canadian takeovers? Alcan almost ruined Rio Tinto and now BHP has gone equally mad with $US38bn hostile potash bid.
7.57pm August 18: As usual, when talking debt Julia ignores the $200bn amassed by state governments and the $1 trillion of household debt #qanda
That's all for now.
Do ya best, Stephen Mayne
The election is over and it will be nice to take off the candidate hat and become an independent commentator again. First off today, let's consider some commentary from our cartoonist Mark Cornwall on the faceless men of the Labor Party and what they'd love to do to Kevin Rudd:
How the numbers stacked up in Senate tilt
Whilst the result in our Senate tilt of just 0.15% was obviously disappointing, the positive spin is that we did beat 10 of the 23 candidates in the field.
Here's how the rather large field in the Victorian Senate race are ranked on primary votes, according to the latest from the AEC website:
1. Coalition: 34.29%
2. Labor: 38.66%
3. Greens: 14.36%
4. Family First: 2.68%
5. Democratic Labor Party: 2.23%
6. Australian Sex Party: 2.23%
7. Liberal Democrats: 1.65%
8. Shooters and Fishers: 1.33%
9. Australian Democrats: 0.48%
10. Christian Democratic Party: 0.38%
11. One Nation: 0.36%
12. Socialist Equality Party: 0.28%
13. Stephen Mayne: 0.15%
14. Building Australia: 0.14%
15. Carers Alliance: 0.14%
16. The Climate Sceptics: 0.14%
17. Independent Joe Toscano: 0.1%
18. Secular Party of Australia: 0.1%
19. Socialist Alliance: 0.09%
20. Senator On-Line: 0.08%
21. Citizens Electoral Council: 0.07%
22. Grant Beale: 0.02%
23. Glenn Shea: 0.01%
Election day was lots of fun as Paula and I toured 30 booths spanning from a dozen in the now Green seat of Melbourne, all the way up to Broadmeadows in Melbourne's north.
It was great to finally meet fellow Ivanhoe Grammar old boy and federal speaker Harry Jenkins at Thomastown Secondary College, which is one of the biggest booths in Australia. This was the only booth where we encountered a DLP volunteer in the form of highly regarded Moreland councillor John Kavanagh. Lo and behold, the DLP appear to have won the sixth Senate seat.
We chatted to Greens MP Adam Bandt at a booth in North Melbourne where he was being supported by former Labor Lord Mayor Kevin Chamberlin. The mood for change in Melbourne was palpable and former ALP state secretary Stephen Newnham is now pushing research showing the Greens will win up to 12 seats in the forthcoming Victorian election.
Newnham has an interest in scaremongering about the Greens because his wife Fiona Richardson stands to lose her seat of Northcote at the coming state election, something the Herald Sun did not disclose in this story pushing the Newnham analysis.
Spinning a bad result
As Australia's most unsuccessful candidate, I'm better equipped than most to recover from a bad election result. That said, you do still go into a funk the day after an election and it wasn't until two interviews on Sunday night that the mood started picking up.
Have a listen to the chat with James O'Loughlin nationally on ABC local radio at 7.50pm, plus the 10 minute chat with John Safran and Father Bob Maguire at 9.50pm on Triple J. Here's the spin to James:
James O'Loughlin: How did you go? Independent senate seat in Victoria.
Stephen Mayne: The best thing I can say is that I beat 10 other candidates, but 0.15% is not something to crow about James, I have to say.
James O'Loughlin: Are you relieved secretly? Did you really want to win?
Stephen Mayne: Oh no. I didn't want to win at all. I am Australia's most unsuccessful candidate, so the Senate was the last thing for me to run for. I've now run for everything possible in politics. Lower House, upper house, state, federal and council.
James O'Loughlin: Have you ever got close?
Stephen Mayne: I am on council in Melbourne, on Manningham City Council. I love to experience elections. I have contested 50 different elections over the years, in corporate elections and political elections, and I love to compare the experience of elections. It's nice to do okay, but I have never gone as worse as yesterday, but it was still good fun.
A number of people commented that it was difficult to find us on the ballot paper courtesy of the rules which don't allow grouped independents to have any branding above the line.
Party names are clearly very important. How else do you explain the Australian Sex Party scoring more than 2% of the vote nationally in the senate. It also helps to have either Liberal or Labor in your name as the little known Liberal Democrats scored 1.6% and the Democratic Labor Party exceeded expectations with 2.23%. The name Family First is also a smart piece of political branding. How can you argue with putting families first?
Being on the far right of the enormous ballot paper was also a problem but even where we handed out how to vote cards, the vote was disappointing so we'll give some serious thought over the coming weeks on earlier plans to contest the forthcoming Victorian election.
Major steps forward in the anti-pokies campaign
Whilst the personal result was disappointing, there are plenty of things to like about Saturday's results as far as the anti-pokies campaign is concerned.
Firstly, pokies operator Julian McGauran appears most likely to lose his Victorian Senator seat to either the DLP or Family First. 100% of my 3712 primary votes (excluding postals) went to the DLP and Family First ahead of the Coalition because both of these smaller conservative parties have very strong positions against the pokies.
The Age's Tim Colebatch explained all the numbers in the Victorian Senate race yesterday and Senator McGauran has lost because Labor achieved its best two party preferred result ever in Victoria, as George Megalogenis opined in The Australian.
Similarly, the Greens position is strengthened and they are strong critics of the pokies. In addition, former Greens candidate turned independent Andrew Wilkie has explicitly campaigned to have pokies banned right across Tasmania and his vote may be vital if Labor is to form a minority government.
Throw in Bob Katter's fervent attacks on Coles and Woolies for abusing their power over farmers and the 12,000-strong Woolies-Mathieson pokies joint venture could come under further pressure.
Anyway, it was a remarkable day in Australian political history on Saturday and thanks again for following the anti-pokies push over the past few weeks.
Click the link below to hear the two Sunday night ABC radio interviews through our audio podcast:
The Cornwall collection and Tony Abbott
Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing to The Mayne Report since March 2009. Here is a collection of his best cartoons and there are now also some amusing animations. Below is his post-election take on Tony Abbott:
Political reform wishlist
The hung parliament is throwing up stacks of great suggestions for reform from the independent candidates and various other players. Here are a few personal favourites:
* Whoever forms government shores up their numbers by poaching some top talent from other side (ie Turnbull to be Gillard's Treasurer or Garrett to be Abbott's Climate Change minister)
* Support Malcolm Turnbull's call for union and corporate donations to be banned
* An independent debates commission to handle three televised election debates each campaign
* A proper independent election costings process answerable to the parliament not the government
* Fixed three year terms to end all the useless early election speculation
* A move to optional preferencial voting as occurs in some states to reduce informal voting
* A Federal independent corruption fighting body to support Andrew Wilkie's call for "ethical government"
* Rob Oakshott's call for individual MPs to be allowed to put up legislation
* Lower the threshhold for public funding from 4% of the vote to 1% to reduce barriers to entry
* Implement the Productivity Commission's recommended $1 maximum bet on the pokies
Australia's top corporate governance campaigner exits stage left
After 13 years kicking around the public company AGM space as a shareholder activist, I've got to know most of the players in the corporate governance space.
No one has done more to advance the cause of good corporate governance than proxy adviser Dean Paatsch, so it was a shame to read the following press release yesterday:
ISS acknowledges departure of Australian co-founder
The co-founder of governance advisory firm ISS' Australian operations, Dean Paatsch, is leaving the group after six years with the business.
The head of ISS, Steve Harvey, said that Mr Paatsch had made a substantial contribution to ISS' governance business and the Australian governance landscape.
"Dean has played an integral part in the success of our Australian business and he will be greatly missed," Mr Harvey said.
Mr Paatsch said that after six years with ISS and its predecessor firms, his neighbours will be relieved that he is planning to finally finish rebuilding his front fence while he takes a career sabbatical. He will spend the forthcoming AGM season trying to swim 1000 very slow laps at the Brunswick Pool.
"It has been a privilege working with the talented ISS team in Australia and to have made a small contribution to the protection of investors' interests," he said.
The Australian governance research team will continue to be led by Martin Lawrence and Simon Connal, with Alyssa Thai taking on increased client responsibility.
Mr Harvey said the strength of the Australian team built by Mr Paatsch and a well-prepared handover plan meant local clients would suffer no disruption as a result of his departure.
Mr Paatsch joined ISS in 2005 when it acquired Proxy Australia, a governance advisory business he co-founded. ISS itself was acquired by RiskMetrics in 2007 and operated under the RiskMetrics name until 2010, when RiskMetrics was acquired by MSCI and changed its name back to ISS. Following his departure, Mr Paatsch will no longer be confused about how to answer the phone.
Below is a picture of Dean's house, which clearly needs some work:
Of all the mainstream business journalists in Australia, no one has covered the governance arguments espoused by the likes of Paatsch more thoughtfully than The Australian's John Durie so it was good to see he gave him this send off in today's paper.
The game changer in Australian corporate governance came in 2005 when global proxy advising power house ISS bought Paatsch's business Proxy Australia and Peter Costello introduced the non-binding vote on a remuneration report.
This delivered Paatsch enormous power because most offshore institutional investors slavishly follow ISS recommendations around the world.
Whilst Proxy Australia and its then locally owned competitor Corporate Governance International would both often recommend against resolutions, too often they were just ignored.
Suddenly, Paatsch's recommendations were being followed and remuneration reports at the likes of Oz Minerals, Telstra, Toll Holdings, Boral, Transurban, Qantas and Wesfarmers were getting smashed.
The key point about Paatsch's performance is that he used the power well. Quality reports combined with savvy media and political work saw many important changes in corporate governance, culminating in the Rudd-Gillard government adopting most of the Productivity Commission's recommendations on executive pay.
The likes of Telstra and Macquarie Group would never have changed their pay practices if Paatsch hadn't taken them on. Similarly, Paatsch did some great work taking on the likes of Allco and Babcock & Brown during the boom when the financial engineers were ascendant.
The departure of former ABC Learning chairman David Ryan as Transurban chairman last week and this ground-breaking report on Australian capital raisings were the final feathers in the cap for Paatsch before he exited the stage.
The Australian produced this positive feature on proxy advisers last Saturday and it is good to see Martin Lawrence is succeeding Paatsch given that he is regarded as one of the finest governance analysts in the world.
Chartwell scalp a rare ASIC jailing highlight
The Mayne Report's ASIC jail list highlights what a slack job the corporate plod has done over the years locking up white collar crooks but it was pleasing to see some accountability for the Geelong-based Chartwell fraud as follows last week:
19 August 2010 - Mr Ian Rau, of Footscray Victoria, the former company secretary of Chartwell Enterprises was sentenced to two years and seven months imprisonment on eight charges. He is to serve 18 months jail before being eligible for parole.
Profit season produces new additions to $100 million loss club
A then record 29 ASX-listed companies reported losses of more than $100 million in 2007-08. In the wash-up of the GFC, this figure ballooned to a staggering 52 companies in 2008-09.
That's a pretty amazing statistic given that we had previously only found 75 companies that had achieved that milestone more than 150 times over the 20 years to 2006-07. Check out where they rank in this league ladder of corporate disasters, plus this chronological version.
The past week has seen the following new additions to the $100 million loss club but in this post-crash environment they are the exception to the rule:
Goodman Group: the industrial property giant came back from the brink with a monster capital raising but still delivered a $562.6 million net loss in 2009-10, largely due to one-off write-downs.
Paperlinx: reported a net loss of $225.3 million in 2009-10, largely thanks to write downs of $170.3 million related to its struggling Tasmanian operations.
The big debt issues continue right up until election ever
The Liberal Party's election day bunting in Victoria featured red messages about Labor borrowing $100 million today.
They could have been cheeky and said the government borrowed $700 million the day before because that's precisely what they did according to this list which tracks all bond and treasury note issues by the Labor Government since it was elected in November 2007.
Reserve Bank governor Glenn Stevens recently claimed: "There is virtually no net public debt in the country at all in contrast to much of the developed world."
This is just bizarre considering the Federal Government's own debt management website now puts the gross debt figure at $151.5 billion and then have almost $200 billion of state debt to consider.
Labor's Queensland electoral wipe-out was driven in part by the Bligh Government's proposed $15 billion privatisation program. Nothing was flagged before last year's state election but then the burden of a $30-billion plus borrowing program in the current term became overwhelming as Queensland Labor decided it did not want to follow the lead of NSW and lose its AAA credit rating.
If anyone needs assistance on federal debt questions, the latest bond issues are as follows and you'll note that interest rates are still north of the 4% assumed in last year's budget papers:
Friday, August 20, 2010: $700m tender of 6 year bonds expiring in June 2016 were sold for an average yield of 4.68% and was over-subscribed 3.1 times.
Wednesday, August 18, 2010: $500m tender of 12 year bonds expiring in July 2022 were sold for an average yield of 5.06% and was over-subscribed 4.5 times.
Donate to help keep us going
The Mayne Report costs almost $100,000 a year to run and we moved to a free model in June last year. It has been nice to receive more than $10,000 worth of donations from generous supporters over the past year and if you fancy helping fund our activism to keep us going on the political and AGM circuit, just click on the image below:
Tracking former federal government staffers
We're still tracking former political staffers in Canberra since Bob Hawke's election in 1983. Updates rely on emails to Stephen@maynereport.com or use of the anonymous tips box.
There have been a few updates so check out the three lists below and send through any corrections or feedback:
Tracking the former Hawke Keating staffers
Where Howard staffers finished up
Where Rudd government staffers went
The Mayne Report Rich List
BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised. Below are our latest new or updated entries:
Mitch Corn: leader of the development company Beville Corp which last week re-opened the huge Top Ryde shopping centre complex in John Howard's old seat of Bennelong.
David Same: his father Saul Same founded the Gloweave empire in Melbourne and also pioneered fundraising breakfasts for Melbourne's Jewish business community with the Labor Party in the 1950s, as The Age reported shortly before the 2010 election.
Cornwall on the leaks
Tales from the talk circuit
The Australian Investors Association national conference on the Gold Coast in late July was an interesting three day affair. I was given the final hour to rave away about governance and the feedback was the sort of thing you need to read when attempting to pick yourself off the mat after a terrible result in the Federal election. Here's what has been added to our speeches feedback section:
Stephen
The evaluations from our recent AIA National Investors Conference indicated that this recent conference was one of our best ever, in no small part attributable to your contribution as a presenter.
As you may be aware all delegates were asked to rate all speakers out of 5 for both content and presentation. I thought you might be interested to know that you scored 4.75 for content, 4.8 for presentation and overall rated 9.54 which ranked you as the top speaker overall.
Our delegates are quite critical so this is an excellent result. Congratulations.
Once again, on behalf of the AIA, my sincere thanks to you for your time and effort in preparing a very informative presentation for our AIA National Investors Conference.
Many thanks
Silvana Eccles
Executive Officer
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Click on the image above to join more than 2000 followers on Twitter. Here are some of the more recent tweets:
6.44pm August 20: Transurban today appointed Bob Officer to replace David Ryan on board. All blokes board appoints another old white finance guy. Hopeless.
6.37pm August 20: Record pre-poll just closed on eastern seaboard. Were big queues at 565 Bourke St over last 90 minutes. Felt like a Green win in Melbourne.
12.48pm August 20: Here is council's press release condemning Labor's call in of donor Dadon's project: http://portphillip.vic.gov.au/releases_may09_2865.htm
12.45pm August 20: Tim Matheson's boss Albert Dadon claims his deals follow process. Hmmm, 568 St Kilda Rd was called in by Madden 1 week before VCAT hearing.
12.13pm August 19: Slipped a how to vote card into McGauran family's East Melb pad this arvo. Enjoyed a nice dinner there in 1990 - won't be invited back soon!
11.07am August 19: Just sent campaign missive on donations, pokies, media bias, Tim Matheson and likely defeat of Senator McGauran: http://www.maynereport.com/
8.30am August 19: What is it about $US38bn Canadian takeovers? Alcan almost ruined Rio Tinto and now BHP has gone equally mad with $US38bn hostile potash bid.
7.57pm August 18: As usual, when talking debt Julia ignores the $200bn amassed by state governments and the $1 trillion of household debt #qanda
That's all for now.
Do ya best, Stephen Mayne