Christopher Back (WA, Liberal Party) Share this | Hansard source

Isn't it amazing how outrage can be confected out of absolutely nothing? I intend to commence my contribution by advising people in this place, and those who might be listening, what the history of this sad saga is. If those who are in the chamber now were listening to this situation, they would think, 'Here is a scenario where a group of Western Australians thought they could grab a few dollars to the exclusion of the wider taxpayer of Australia. How unfair is that! Why the billyo should that be happening?' And then we get the Senator Wongs and the Senator McKims of this world coming in with this confected outrage.

I was in business in Western Australia in the 1980s through to the time I came into this chamber, and the period from about 1987 to about 1993 was characterised by a Labor government led initially by Mr Brian Burke—he got out when the temperature became too hot—and then by Mr Peter Dowding, and then Ms Carmen Lawrence was left holding the baby. Those of you who are not Western Australians might vaguely remember a term that was used: WA Inc. The WA Inc era, led by Mr Brian Burke and his cronies, represented the worst corruption and the worst features of any interaction between government and industry, business and communities. His cronies were the late Mr Laurie Connell and the late Mr Alan Bond—people who, for example, when it came to a diamond mine in the north of WA, were, on the one hand, helping the vendor in selling assets to the Western Australian government through Mr Burke and who were, on the other hand, with the other hand out, supposedly acting for the people of Western Australia. They were getting a commission on the way in and on the way out.

So we come to 1988 and to the time of the late Mr Robert Holmes a Court, a corporate raider, a very successful businessman and a very successful lawyer. He owned the majority of Bell Group, Bell Resources. And who came on the scene wanting to buy Bell Group but Mr Alan Bond. So, for an inflated price, Bond Corp took over the Bell Group. This happened in 1990, and of course, by 1990, Bell Group and Bond Corp were in significant financial difficulty. So to whom did they turn? They turned to their best mates. Mr Laurie Connell had a company which had been a shirt manufacturing business in Queensland. It became supposedly his bank, an investment bank called Rothwells. If anyone in the chamber or listening might remember Rothwells, it was a men's shirt company in the 1960s. Mr Connell turned it into an investment bank, which became his personal bank. Time does not permit me, in the 24 hours I might have, to tell you the events that took place surrounding it, so I now come to 1991, when Bell is insolvent. To whom did Bond and his mates turn? 'Burkie', the architect of WA Inc. You may have heard all the confected outrage in this chamber today from Senator Wong and Senator McKim, but, until you start to understand the history of this whole event, you will not come to a comprehension of the events.

You have heard Michael Mischin, our Attorney-General in Western Australia, being besmirched. You have heard Dr Mike Nahan, the Treasurer of our state, being besmirched. There is even an attempt to draw Christian Porter into this along with the Attorney-General for cheap political gain. But understand the background to this, because what do you think Burkie did? Mr Acting Deputy President Whish-Wilson, you were probably a kid in school in Perth when all this was happening. My good colleague Senator Siewert, like me, was possibly an agricultural scientist in the service of the Department of Agriculture at that time. I was in business in Western Australia. And how ashamed do you think we all were of the rotten Western Australian Labor government and the possibility that Burke was being talked about as a future federal Labor politician and, dare I say it, even the Prime Minister of this country? Burke was rewarded by getting to be the ambassador to the Holy See and Ireland. He got into strife again for the importation of vehicles and also for a stamp collection—he could not remember whether it was Burke personal assets or the property of the Labor Party or of the poor old taxpayer of WA, so he enjoyed some hospitality at Her Majesty's pleasure during that period.

So basically a liquidator was appointed, and probably the only accurate thing Senator McKim said was that some private sector creditors were associated with the liquidation of Bell. There was the Australian Tax Office—in other words, the Australian taxpayer. But let me tell you who carried the can, and that is the point of the contribution I wish to make before I get on to the disgraceful statements from Senator McKim about Western Australia's share of GST. I will tell you who carried the can, Acting Deputy President, because you were too young. What did the Burke WA Inc. rotten WA Labor government do? They funded the litigation through a levy on compulsory third-party vehicle insurance—people like me, my family, pensioners, older people. We were all levied to the tune of $50 per vehicle per year in what became known as the rotten WA Inc. levy. Let us not forget that, in this proud moment of Senator Wong and Senator McKim getting up here and carrying on in some unctuous way.

The people of Western Australian funded the litigation that became a case between 2003 and 2006 before Justice Owen—404 sitting days. Let me remind you: Bell goes to the wall in 1991; the case comes before Justice Owen, sitting as a judge alone, so excellent was that man's commercial knowledge, between 2003 and 2006. This is the point I want everybody in this place to understand. When the WA government approached the federal government with a view to the federal government contributing to the cost of the litigation, how much did the federal government offer to contribute? Not one cent, not a penny, nothing! So it was funded by the Western Australian community. Every time we paid our insurance on our vehicle registration we paid another 50 bucks to the rotten Western Australian Labor government funded WA Insurance Commission.

When I sit in here now and listen to the nonsense I have heard here this morning about the poor old Australian tax office—I will tell you how much the tax office put into it: nothing. Why? Well, I will lay a shade of odds, not being a gambling man: they reckoned they could not win. So it left itself to us—not Brian Burke, not Peter Dowding. It was the Western Australian community of motor vehicle owners who paid the lot. And I will tell you how much it was between those years. It was in excess of $200 million, in year 2000 dollars, that the Western Australian community paid. The total cost of litigation would appear to have exceeded about $500 million, because the banks—Commonwealth, Westpac, NAB—of course were the defendants. And after 404 days, Justice Owen found in favour of the Western Australian government, found in favour of the creditors. The only one who had paid anything towards that were the WA community.

Let me tell you a little bit about how this legal case was run. It was not just a few solicitors down the road in St Georges Terrace. All the legal advice came over from the eastern states of Australia. Every Monday morning they were flown in; every Friday afternoon they were flown out—not one or two or 10 but hundreds, funded by us. Rooms were secured in the high-rise building in Perth, and nobody was allowed into them. Even the cleaning contractor was excluded from going in to that section. That is how important they regarded this as being. Why did that happen? It was because most of the legal firms in Perth were conflicted or potentially conflicted as a result of all the actions that had gone on—prosecutions and litigation associated with WA Inc. Can anybody who has ever been to a lawyer imagine the hourly costs of flying in lawyers—solicitors, barristers—from the east every week for that number of years? It was massive. Yep, we got a judgement in our favour. Fantastic, wasn't it? It was absolutely fantastic. There was money there. Do you know what the amount was going to be, Acting Deputy President Whish-Wilson? It was in the order of $2 billion. I do not reckon that was a bad return. You put in $200 million, and you might get up to $2 billion—10 to one. Go to the track on Saturday, and 10 to one is not a bad gamble. But what do you think the banks did? They appealed. It went on and on. It went to appeal.

How much do you think at this stage the Commonwealth government was going to contribute to legal costs associated with attacking and then defending the appeal? My right hand is too tired now. It is too sore, so I will not have another go with it. I will leave it to those in the gallery to tell me how much the Commonwealth was willing to contribute. It was nothing. It was not a bad deal for the Commonwealth, was it? They were due for $300 million, those mugs in the West have paid the costs, it looks like there is a judgement, but the banks are appealing it. Do you think the ATO might throw a few bickies in this time? No. Where do we get to? We get to 2015, and Treasurer Nahan is watching the money going down the gurgler in legal fees. What would you have done, Acting Deputy President Whish-Wilson—you are a person with a high degree of commercial knowledge—if you were up against the three big banks and the bickies were dwindling away? I will tell you what you would have done. You would have used every mechanism at your disposal to try to bring this event to a conclusion on behalf of your community of people who are paying for it.

That was why Treasurer Nahan brought in the legislation in 2015 to try to bring this whole sad, sordid mess—which had its genesis in the Burke Labor WA Inc era—to a close. It was so that there might be a few shekels left to be shared. I am not a party to any conversations or communication between Michael Mischin, Mike Nahan, Joe Hockey, the Queen of England, Freddie the racehorse or anybody else. I am saying to you that it appears to me that this was a very sensible course of action to try to bring this to a conclusion before there was nothing left in the bickie barrel, in which case there would not be anything for any of the creditors. These people on the other side of the chamber can carry on as much as they like about the action of the Attorney-General. He made it very clear in his statement today in terms of actions taken, by whom, when and who knew what.

I am going to finish my contribution by addressing myself to the slur that was visited upon Western Australians by Senator McKim. It is true that Western Australia today is getting back 30c of every GST dollar that we generate. Those in the Northern Territory are getting 530c per dollar; that is $13,000 for every person. Tasmanians, represented by Senator McKim—I do not know why he complains so much; he does not have a bad deal—get $4,444 per person out of the GST share. Tasmanians get almost $1.80 for every dollar they contribute. It goes down from there. South Australians get just under $4,000 per person; Queenslanders get just under $3,000 per person; the ACT gets almost $3,000 per person—Senator Seselja will be pleased to learn they get 115c per dollar—and Victoria and New South Wales get just under $1 for each dollar; they get $2,278 per person. Remember that figure of $4,444 per head that Tasmanians get? I hope Senator McKim is listening—he will not be. Western Australians get 760 bucks per person for generating 48 per cent of the nation's export wealth. We are getting $760 a head—contrasted with those in the Territory getting $13,200.

The deepest insult that Senator McKim has visited upon us is that Western Australia was a recipient state for many years. Yes, we were. I will tell Senator McKim why: in those years when manufacturing in the rustbelt states of Victoria and New South Wales was active, there was a very high level of tariff protection on manufacturing. Why was Western Australia—and to some extent South Australia—a recipient? It was because we were agricultural economies, not manufacturing. Senator McKim is right when he says that Western Australia was a recipient state—but not for the purposes of a handout, a subsidy. We were a recipient state to try to balance the high levels of tariff protection that those other states enjoyed.

I will conclude with this comment: it is hardly a Federation when one member of the family gets 30c in the dollar for the contribution it makes and other members of the family get $4 to $5. How does it play out? I will tell you how it plays out. There is only one state in Australia this year that will declare a deficit. Every other state will declare a surplus. WA's deficit is $3.9 billion. Do you know why that is important? If we were getting dollar for dollar, we would be getting $4.2 billion. We also would be in surplus, but the others would not. I will tell you about what happened in WA Inc. It is a long story, and today is only its final chapter.