Citizens Electoral Council of Australia
Media Release  19th of May 2009

Website: http://www.cecaust.com.au
 

Great Southern fiasco should be included in Pecora Commission

Managed Investment Schemes (MIS) such as Great Southern and Timbercorp should be included in a Pecora Commission into corruption and possible criminality in the financial system, demanded Citizens Electoral Council leader Craig Isherwood today.

Great Southern has collapsed into administration with $700 million in debt, and owing 43,000 investors as much as $4 billion; Timbercorp, with 18,000 investors, went into administration on 23rd of April with $903 million in debt.

Mr Isherwood compared the two MIS disasters to other financial scandals like ABC Learning Centres, Allco Finance Group, Elderslie Finance, Lift Capital, MFS, Opes Prime and Storm Financial.

“The bodies keep piling up—when is the Government going to start cleaning it up?” he asked.

The real scandal about Great Southern and Timbercorp, the CEC National Secretary identified, was the political decision to back such flimsy, speculative businesses with enormous tax breaks to tie up enormous tracts of prime agricultural land in tree plantations, instead of food production.

“Like free trade, environmentalism, water trading, and, soon, carbon credits, these MIS scams have been a key part of the government assault on family farmers and our national food security.

“They were afforded enormous tax breaks to lock away land from food production, bid up water prices to levels family farmers could never compete with, and, with what food production they did undertake, such as almonds, flood the market.

“Family farmers have been reeling from the MIS onslaught for more than a decade, and have basically been told to cop it sweet: ‘this is the free market, capital is finding its most efficient use—capital says we need bluegums, not food, so stop your complaining.’

“Now it’s out in the open that these managed investment schemes were scams, totally dependent upon government tax breaks, aggressive investment salesmen chasing up to 10 per cent commissions, a Ponzi-style scheme needing to attract more and more gullible investors, and generous banks willing to keep adding to their enormous debts.

“And the Great Southern management, which is closely connected to the grandmasters of making enormous profits from government concessions at Macquarie Bank, have awarded themselves huge pay boosts, even while the writing has been on the wall.”

Mr Isherwood blasted the role of the government and the regulators:

“Once again, we have a scandal, where either the authorities were grossly incompetent, or they were in on it.

“I say they were in on it, because globalisation—British free trade and deregulated free markets—has driven the world into a more and more severe food shortage, yet successive Australians governments have pursued policies that have destroyed family farmers and domestic food production.

“However, I believe all sane Australians would agree we need family farmers, and we need national food security,” he insisted.

“For that reason, we need an Australian Pecora Commission, which like the U.S. Pecora Commission in 1932-34, has the powers to lay bare the corrupt and possibly criminal nexus between politicians and private financiers that created the public policies that allowed these investment disasters to happen.”

 
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