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Indue and the small matter of political corruption

August 28, 2019 - 14:02 -- Admin

Would it ever be acceptable to
appoint James Packer or Gerry Harvey to review social programs on behalf of
government? Or Meriton property tycoon Harry Triguboff? The owner of the Seven
Group, Kerry Stokes? Should we appoint Gina Rinehart to sit on the board of the
Fair Work Commission?

These are Australia’s wealthiest
individuals and they certainly know a great deal about creating empires, making
fortunes, and using their resources and privilege to ensure they remain in
these privileged positions, complete with financial and political influence.

But would we ever trust them to
generate ideas for how governments should manage social welfare and payments systems?

In 2008, Harvey Norman chairman
Gerry Harvey said welfare was for “no hopers”, and giving money to homeless
people was just a “waste”, suggesting the money for this sector of society was
“helping a whole heap of no-hopers to survive for no good reason… they are just
a drag on the whole community”.

In 2012, Gina Rinehart bemoaned
the level of high salaries in the mining industry and compared Australian
workers with west African labourers, who were “willing to work for less than $2
per day”, as well as demanding government should lower the minimum wage, and
force welfare recipients to “spend less time drinking or smoking and
socialising, and more time working”.

In 1984, her father, mining magnate Lang Hancock, suggested one solution to the ‘Aboriginal problem’ would be to “dope the water up so that they were sterile and would breed themselves out in the future, and that would solve the problem”.

As we can see, there are good
reasons why the wealthy class has traditionally been kept away from the management
of government employment and welfare programs – they have no experience in
government or welfare work, little commitment to public service and community
wellbeing, no experience in sociology or behavioural science, their ideas are typically
self-serving to their own financial interests and present an extreme conservative
right-wing ideology.

Missed the recent New Politics podcast with Eddy Jokovich and David Lewis? Here it is!

Putting aside the fact the amount
provided in corporate welfare in the form of government grants, loans, tax
breaks, subsidies, graft and payola far exceeds social welfare payments, the
best these entrepreneurs can do for the community is continue in their quest to
create wealth and employment opportunities, even if they do reduce their tax
liabilities to immoral extremes and the amounts of personal wealth they accumulate
are obscene.

They’re entitled to their opinions
but shouldn’t be proffering ideas directly to government for how to apportion taxpayer
funds in the interest of the public, because they rarely consider the public
interest. That’s why we have elected representatives and a skilled public
service to implement these critical community services, as well as take
responsibility for the decisions they make.

Andrew Forrest enters the field

Taking this into account, it was perplexing in 2013 when the newly-elected Abbott government appointed the head of Fortescue Metals Group, Andrew Forrest, to review Indigenous employment and training programs. Forrest was briefly Australia’s richest person – in 2008, with a net worth of $12.7 billion – but has no experience or expertise at all in welfare programs.

Andrew Forrest.

Like many others in his cohort – and anybody else in the community – he brings ideas and opinions to the table, but these are ineffective, harsh and demeaning to the people they are meant to support. And in many cases, these ideas are only provided to create more opportunities for the wealthy class.

Forrest’s report, presented to
Government in 2014, holds the view that government payments to unemployed
people, carers, people with disabilities and single parents should be
quarantined, and introduced the idea of the ‘Healthy Welfare Card’, later to be
known as the BasicsCard. The report, Creating
, is essentially a long opinion piece, epitomising the thoughts of
Andrew Forrest, and typical of the ‘robber–baron’ corporate cowboy mentality
that suggests his way is the only way to address welfare issues.

It’s a report replete with all the
positive attributes of a BasicsCard, but ignored the negative impact of many
other income management schemes from around the world.

Even more curious is while Creating Parity consistently refers to
National Australia Bank, Commonwealth Bank of Australia, Westpac and ANZ –
surely the best providers to implement and manage such income management
schemes – there is no mention of Indue, the company Forrest and other
benefactors were involved with at the time, and the company that ultimately
ended up managing the trial programs, which were rolled out from March 2016
onwards in Kununurra, Wyndham, Kalgoorlie, Ceduna, Tennant Creek and Bundaberg.

Of course, governments should be
open to new ideas to address identified social problems but, essentially,
Forrest has cynically sought money-making opportunities that will benefit
friends of the Liberal and National parties, and syphon public monies into
private hands.

Indue and conservative politics

The Indue company has existed in some
form for 50 years but more recently, has developed a range of tentacles that
reach out to a range of political players, primarily within the conservative
domain. The most prominent of these is the former National Party MP and current
Federal President, Larry Anthony.

During the time of the Howard government, Anthony was the Minister for Children and Youth Affairs, and after losing his seat at the 2004 federal election, became a director of ABC Learning, the corporatised childcare provider that attracted a wide range of Liberal Party operatives and MPs, including Peter Dutton, Paul Neville, Sally Ann Atkinson and Mal Brough.

Through the 50 per cent childcare subsidy
provided by the federal government, ABC Learning reached a market
capitalisation of $2.5 billion, before it collapsed in 2010, leaving many
children without access to early childhood services and childcare. This was an
absolute disaster of policy, and a failure of government to adequately oversee
funding of an essential social service. The 570 services managed by ABC
Learning when it collapsed were subsequently taken over by the not-for-profit
provider, GoodStart.

Countless millions of public funds that should have been invested into early childhood education, were wasted and diverted through to the share market, speculators and private hands, including former MPs.

The experience of ABC Learning exists
as a reminder to government that essential social services and welfare, when
coupled with the private sector, are a poisonous well, and opening up these
services attracts a wide range of opportunists, grifters, shysters and
corporate criminals.

But it seems the mistakes from the
past are on track to be repeated with Indue and the cashless welfare card
system, and some of the players behind the ABC Learning disaster are set to
re-appear. If there is largesse to be found and delivered from the government
to the private sector, just like National MP Barnaby Joyce, Larry Anthony is
never too far away. Anthony was the deputy chairman of Indue up until 2013 but
his trust company, Illalangi, still owns substantial shares in Indue.

Public money transferred to private hands

During the welfare card trials,
Indue has received between $4,000 to $10,000 for each participant in the trial,
even though the Newstart allowance is less than $14,000 per year. Certainly,
there are start-up costs involved in servicing this type of program, but up to $10,000
for a private company to manage an account only worth up to $14,000 annually
raises questions of whether the Indue company is the most cost-effective option
for this scheme. It also raises the question of why Indue was chosen in the
first instance, especially when the expertise and experience provided by the
National Australia Bank, Commonwealth Bank, Westpac or ANZ would have been far

Up to June 2018, the amount
received by Indue was at least $8.8 million and, reportedly, up to $21.9
million as at August 2019. If the roll-out of the cashless welfare card is
extended on a widespread basis – as many Liberal and National MPs are now
calling for – the value of the Indue company, and the shares held by Anthony
and other Liberal and National party operatives will increase exponentially.

Who else will benefit from the
expansion of Indue? Just like the expansion of ABC Learning in the early 2000s,
Indue has become a magnet for insiders wanting to cash in on government

How much money is Indue donating to Liberal and National party branches around Australia?

Why was Barnaby Joyce so
vociferous in his support for raising the Newstart allowance by $75 per week? Joyce
has been in Parliament since 2005 and has never once made a call to increase
any form of welfare payment. Why the sudden interest?

Was the trade-off for increasing
the Newstart allowance – if it were to ever happen – a large roll-out of the
Indue card to all welfare recipients, which would have resulted in ongoing
benefit to the Liberal and National parties?

Where does Andrew Forrest fit in
with all of this? Like all the other moneyed interests in the world, Forrest
goes to wherever the money rolls. What are the links – more than likely to be
well-hidden behind a trail of trust accounts and subsidiaries – with the
Liberal Party and the National Party?

The many problems of the Indue card

There are many problems with the cashless
welfare card. Senate inquiries from 2015, 2017 and 2018, have all shown that in
the trial regions, there has been no change in crime rates (in some areas such
as Kununnura and Wyndham, there was actually an increase in crime statistics,
as well as an increase in self-harm and suicide).

Dan Tehan, holding the Indue welfare card in 2018.

The Minister for Social Services
at the time, Dan Tehan, claimed the “cashless debit card is making a real
difference in the communities where it operates”, even through the Australian
National Audit Office found the trials and outcomes were not adequately
monitored and, because of this, ANAO could not evaluate whether the trials were
either effective in their desired social outcomes, or whether the relationship
with Indue provided the taxpayer with value for money.

Despite this lack of effective data, and lack of transparency in the relationships between Indue and the Liberal and National parties, the cashless welfare card trials have been extended until the end of June 2020.

There are many fundamental flaws with
the cashless welfare card trials, as recent Senate inquiries have shown. And
the people promoting the trials – such as Andrew Forrest – should be nowhere the
decision-making processes for how governments should spend and management
welfare monies.

Australia is on the verge of instigating a wholesale transfer of its welfare system towards a private company that has no interest in the wellbeing of welfare recipients, and sets up a wide range of opportunities for corruption and a very thin line between government, private corporations and political parties. And, just like the experience of ABC Learning just over a decade ago, it’s another social and political disaster in the making which the public will be forced to bail out.