Bob Katter (Kennedy, Katter's Australian Party) Share this | Hansard source

That was an excellent contribution by the previous member. I very seldom say that in this place! We pay him a tribute. Having said that, I was going to go in a different direction but I'm going to just carry on from what he said. In spite of it being an excellent contribution, he missed the most important factor here. In another life, I sold savings contracts. They called us AMP agents. Back when I sold them, in superannuation there was a 60-40 rule: 60 per cent of all superannuation went into government securities. When that magical government in Queensland, the much-maligned Bjelke-Peterson government, built 6,000 kilometre of railway line to create the coal industry in Australia—we were a coal-importing country before they undertook that program, and then we became the biggest coal-exporting state on earth—it was done out of the superannuation moneys, that 60-40 arrangement. A retiree had a guarantee by a state government that his savings would be secure. A superannuation investor now is watching 51 per cent of his moneys go into the stock market.

The stock market is just a Ponzi scheme. I don't think there are too many people under any illusions about that. I don't make assertions in this place without backing them up. Some 20-odd years ago, $70 billion a year was going from superannuation into the stock market. Now, $1,670 billion a year is going into the stock market. If you're only bumping $70 billion a year, it'll go along fairly steady, but, if you start pumping $1,670 billion, you're going to push the prices up through the roof. Is there anything backing that up? Is there any creation of a coal industry? Is there any substance behind it? No—there's no substance behind it at all. All you've got is a bunch of kids with a shiny Master of Business Administration coming out of RMIT in Melbourne flashing their credentials around and buying and selling shares to each other. They know absolutely nothing about the shares. I'd like to ask them what 'Cenozoic' means, what 'epigenetic' means or what an 'enriched zone' in mining means. If you're going to invest in mining and you don't understand those terms, you shouldn't be investing in mining. Superannuation has been placed in the greatest of jeopardy. Fifty-one per cent is going into the stock market, and, lamentably, half of that is going into the American stock market, not the Australian stock market. I don't know what a young kid out of university is going to know about shares in an American company.

I read an article by one of the more famous people in Australian history, Bob Santamaria. I stopped reading his articles, because I thought it was a really stupid article. He said that control of world investment is now under people who are in their 30s—this was about 40 years ago—who are being paid hundreds of thousands of dollars a year and are moving around hundreds of millions of dollars of investment. I thought: 'The old fella's lost his marbles. I'm not going to read his articles anymore.' Some eight months later, Barings Bank, the oldest and one of the biggest banks in the world, was brought down because of a fellow called Nick Leeson, who was not in his 30s; he was in his 20s. He was not on hundreds of thousands a year; he was on millions of dollars a year. He wasn't pushing around hundreds of millions of dollars; he was pushing around thousands of millions of dollars. So Bob Santamaria had been wrong, alright, but he'd been wrong in the wrong way.

I became a very great acolyte of that famous man following his prescient observation that we were going into this free market system which was absolutely disastrous for the country. Instead of the money going into rail lines to open up coalfields and instead of the money going into dams to build and create irrigation for farms and security of production for our farmers, it was all going into speculation and predation. The greatest economist of all time, Hjalmar Schacht, got control of the German economy, and he confined all moneys. You couldn't raise any money over there unless it went to industry, industrial production, farming production, the renovation of houses and the building of superhighways. You didn't have any money for floating companies or playing your usual stock market games—speculation and predation were out. You're not going to get any money to build a big shopping centre that's bigger and brighter than the one that's already there so they'll leave their shopping centre and go to your shopping centre. That's where we talk about predation: I'll take over your company and sack all your administration and do it from my administration, and it'll be more efficient. Like hell it will be! You'll be more powerful, but they won't be any more efficient. That's predation: I'll build a bigger skyscraper than you; it will be newer, and everyone will leave your skyscraper and go into mine.

And speculation is typically Goldman Sachs during the Great Depression. They said, 'You float your company called Blue Horizon'—don't quote me on the names. So you floated it for, let's say, one dollar, and the representative of Goldman Sachs said yes. Then you floated a company to buy the shares in Blue Horizon. 'That's correct, yes.' And then you floated another company to buy the shares in the company that owned the shares in Blue Horizon. Then you floated another company to buy the shares in the company that owned the shares in the company that owned Blue Horizon. This is what's called a Ponzi scheme. At the end of it, there were tens of thousands of millions of dollars in that company that owned Blue Horizon, and Blue Horizon owned some worthless land in Florida swamps. That was all it owned. That's speculation. All of your superannuation is going into speculation and predation.

To return to Hjalmar Schacht: Hitler came to power, and Schacht ended up in the Dachau death camp because he was the only person in Germany on record that spoke up against the persecution of the Jews. So he was a very, very great man indeed.

Let me move to banking in Australia. I am on record as saying on many occasions that APRA is not a watchdog; APRA is a lapdog. I have had case after case after case, and they have occupied so much of my lifetime, fighting the banks. Let me just give you one case. A sugar mill got into trouble in North Queensland, as sugar mills do from time to time, and fell into the hands of an administrator. The banks put it in the hands of an administrator. The sugar mill, worth $200 million, was sold out from under the farmers for $2 million. I'm not going to go into all the details of it, but those were the basic facts of what happened. APRA was ordered twice by Wayne Swan to investigate, because he was enraged by the case. They completely ignored him. Well, they did an investigation but came back and said there were no problems, nothing to investigate.

Joe Hockey became Treasurer. He looked at the case and again twice ordered APRA to do something, and twice they ignored him—treating the elected government of Australia with absolute contempt. I think you probably know the end of the story with the Innisfail sugar mill. The bank ended up with the account of the people that it was sold to for $2 million, and the accounting firm that had done the dirty deed ended up with the auditing accounts for that company as well. So there was the payola, and APRA whitewashed it.

In Kagara Zinc we had a minority shareholders group on the board that pleaded and forced and cajoled the company into liquidation, so, when the assets were sold, the minority shareholders took up the assets, without any debt. The debt belonged to the company, Kagara. Kagara owed all this money, but, when Kagara's mining assets were sold, they were purchased by the people who were the minority shareholders—a classical round robin, where red flags should have been going up everywhere. Within two days they reported back that there was no problem. How would you investigate a complex structure like this?

I'll put it in a personal way. I was with a journalist with The Sydney Morning Herald who had run 12 major articles condemning APRA and showing that they are absolutely worthless. We were at a cafe in Sydney, and there was an older middle-aged lady serving on the tables. She wore glasses and seemed a very nice lady. She said, 'Did I hear you say the word "Kagara"?' I said: 'Yes. We're discussing Kagara and a number of other outrageous cases of nonperformance by APRA.' She said, 'I'm a schoolteacher and I lost all of my earthly savings in that mining company.' I said: 'It was a good mining company, a good investment to make, but, through chicanery, you've been taken for a ride.' She said, 'Will I get any of my $100,000 back—my entire life savings?' and I said, 'I don't think so. We're here—we're just going to write another attack upon APRA.'

If there has been a single case in my 46 years in parliament in which APRA has done anything to help anyone, I am not aware of it. Yet successive governments will leave that bunch of puppets in place, with the banks pulling the strings, again and again and again. I don't condemn Wayne Swan, because he probably would have done something, and I don't condemn Joe Hockey either. Both of them have moved on. But I think both of them had reached the point where they knew something had to happen. I wouldn't have been the only case going before them.

In Australia, the government went around congratulating itself: 'We were brought successfully through the GFC. Aren't we wunderkind!' And the banks were all parading themselves around saying, 'We have been very prudential.' What absolute rubbish. In America, they have non-recourse lending, so, if the bank lends the money to you to buy a house and you go broke, the bank forecloses on you and takes the house and your debt vanishes. So you've lost your house—you've been well and truly punished. You might have had $50,000 or $100,000 in that house. You've lost that money. But the bank also has lost, because they own the house now and they've got to sell it. So the bank shared the risk with the borrower, as it should be, and they're the businessman. A young bloke that's just started as an apprentice fitter on $40,000 a year wants to go and buy a house. The bank says, 'Yes, you can buy a house—$350,000; we'll give you the money,' knowing that he'll go broke. I sold what they call insurance, but it was investment funds. If we sold an investment fund of that type, we would lose our agency, and every other insurance company would not touch us with a 40-foot barge pole. We would be put on a list. The banks congratulate you; they promote you. The more business you do, the more people who have sold up and are broken and destroyed, the more they'll congratulate you and honour you and promote you. This is not working. APRA has to go and there has to be a standard form contract. (Time expired)

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