Alert and Alarmed

The End

2006-11-06T11:55:00.000-08:00

[The estimable Michael Leunig captures the human condition]

Unfortunately, A&A is closing down. Other priorities beckon.

Goodbye.

Cargo cult Australia

2006-11-06T10:44:00.000-08:00

[Patrick Cook, reflecting on a previous resources boom in the late 1970s, the National Times. The gang of three are Malcolm Fraser, PM, John Howard, Treasurer & Doug Anthony, Minister of Trade & Resources]
Evan Jones

Letter to The Australian, 5 March 2006
With billions of dollars worth of yellowcake to be shipped to China and almost certainly to India in the coming years, the question that raises its ugly head every now and then is this: what does the future hold after we have dug the last hole and shipped the contents off-shore? Maybe we could start importing the world's garbage to fill the holes where our wealth used to be. Clever country? You would have to be joking.
G. Unwin Gold Coast, Qld

On 8 April 2002, visiting American business/finance writer Mark Gottlieb published an article in the Canberra Times headed ‘Our miracle economy may be a mirage’. Gottlieb was confronted with ‘an unbroken stream of optimistic comments about the state of Australia's economy’, but applied some lateral thinking to the test. Gottlieb had a quick look at how Australia stacked up against the Netherlands. Even by conventional macroeconomic criteria, the Netherlands beat Australia hands down – no mineral or natural resources; 83% of the population but 93% of Australia’s GDP (2000), giving GDP per capita at US$25,000 compared to US$20,500; an inwards foreign direct investment of US$52bn compared to US$7bn. But Gottlieb would not know that it is verboten in Australia to look to Continental Europe for ideas.

* * *

Well might the Melbourne Institute of Applied Economic and Social Research hold a conference on the theme ‘Making the boom pay: securing the next generation of prosperity’. It is not a subject that the Howard Government has contemplated to date.

There is a tension between the Government’s optimism and the danger signals regarding the economy. The environment has crashed the party uninvited. But the Government remains mired in self-denial. It lost time with the appointment of Rio Tinto employee Robin Batterham as Chief Scientist. It thinks that the market will equilibrate water flows, and now that nuclear power will solve Australia’s emissions problems.

The incapacity to see clearly beneath the surface is not the fault of any one Party, but is bipartisan. It is deeply structured. It is helped significantly by the dependence on macroeconomic indicators of the nation’s economic health that chart aggregates. The estimated increase in Gross Domestic Product (at current prices) for the last financial year 2005-06 is about 7 ½ percent. Brilliant. How could one quibble with that?

the NAB and publicity

2006-11-02T17:49:00.000-08:00

['A Banker'. Grandville, from Les Animaux, 1840-42]

Evan Jones

The National Australia Bank has an ambivalent approach to publicity. On the one hand, the NAB devotes considerable resources and energy to playing the generous sponsor and socially aware corporate citizen. On the other hand, the NAB devotes considerable resources and energy to eradicating any adverse reporting and commentary in the media regarding its practices. The NAB story provides a case study in media bias in reporting how our economic system actually works. Senator Fierravanti-Wells take note.

The NAB had been subject to intermittent bad press because of its serial incompetence and, most recently, devious practices on its currency trading desk. The NAB revved up its public relations machine to fever pitch when Melbourne was given the Commonwealth Games. Thus the NAB announced sponsorship in September 2004, getting blanket advertising coverage leading up to and through the event. Soon after the sponsorship announcement, NAB opened its docklands complex, buying free publicity with Premier Steve Bracks.

With the NAB and Bracks in each other’s pockets, it’s not surprising that the Premier’s Office found no cause to deal with an NAB victim who the Victorian Government had induced to migrate to Australia.

In April 2005, the NAB became the principal sponsor of the National Press Club. Here is the NAB’s version of the event:
National Australia Bank Chief Executive, John Stewart, said the role of Principal Sponsor enabled the National to demonstrate in a concrete way its support for the development of active, informed community discussion as the basis for policy-making. Mr Stewart said the Bank would work with the National Press Club to expand such activity wherever suitable opportunities arose. "Good journalism is an essential element of good governance in both the political and corporate arenas," he said.
Here is the National Press Club’s view of its own importance:
For people who shape Australian society, the National Press Club is Australia’s most recognised vehicle, an icon chosen for major statements and for initiating change. Whether the issue of the day is political, economic, corporate, diplomatic, military or societal, the National Press Club plays a significant role in Australian Society. Companies that share this stage and image have distinct advantages over their competitors.

The National Press Club is an icon institution that reaches the influencers and decision makers of Australia; be they Federal or State Parliamentarians, political advisors, Government Heads of Departments, diplomatic community, academia, legal and other professions, journalists including the Federal Parliamentary Press Gallery or just thinking Australians many of whom are leaders in their own communities.
Which dovetails very nicely with the NAB’s transparent need to move amongst the movers and shakers. Which had an immediate payoff when the federal Treasurer delivered his budget speech in May:

Ladies and gentlemen welcome to the Great Hall of Parliament House in Canberra, and today as many of you have already heard, we welcome you to the first National Australia Bank address. The National Australia Bank has become the Club’s principal sponsor taking over that role from Telstra who have had a long and productive period as our principal supporter for 12 years, and they will remain a major supporter in a different role which you will hear more about later in the year. But there could hardly be a better way to start a new relationship like this than welcoming back the Treasurer the day after the Budget, his tenth, please welcome Peter Costello.
One is surprised that the NAB is not made Principal Sponsor of the Victorian and federal governments per se. Why mess around with halfway steps?

Then there’s the multiple feel-good community sponsorships. The NAB supports fundraising for the Ovarian Cancer Research Foundation; it supports the Puma Lap challenge (a treadmill competition) that raises funds for Elizabeth Murdoch’s Children’s Research Institute. It funds an indigenous scholarship at Melbourne Business School. It has an elaborate staff volunteering program. Etc. The NAB’s monthly staff magazine, the star, is chock a block with claims of NAB’s community sensitivity.

That the community sponsorships are worthy is undoubted. But there is a smell about the PR activities with governments. To remind ourselves of what the NAB claims to be doing at the National Press Club:
… support for the development of active, informed community discussion as the basis for policy-making. ... "Good journalism is an essential element of good governance in both the political and corporate arenas," [CEO Stewart] said.
Active, informed community discussion, and good journalism as the essential elements of good governance.

Yet in June, two months after the NAB had moved into the Press Club, Israeli academic Uri Davis, author of Apartheid Israel, had his Press Club appearance cancelled. Where was the NAB (‘active, informed community discussion’)? At home in its counting house. Fell over at the first hurdle.

NAB sponsorships everywhere in the news. Not so NAB’s treatment of the business clients that it chooses to dispose of.

In April 2002, News Weekly published an article by me on the case of a Queensland grazier, Lyn Freeman, who had been nastily foreclosed (and his property sold under value) by the NAB. Freeman’s case also highlighted how the NAB had been rorting a State primary industry reconstruction subsidy scheme.

In early 2003 I wrote a comparable piece on a shabby foreclosure by the NAB (assisted duplicitously by Deloitte) of a New South Wales hardware business couple. The News Weekly editor said no, not possible; legal advice, etc., etc. The NAB had muzzled News Weekly, champion of the small business underdog.

In April 2004 I wrote an extended dossier on eight cases of victimisation by the NAB, all but one small business clients, extending over the last twenty years. I sent a copy to the recently appointed new CEO, Mr. John Stewart. No reply. New man at the helm not responsible for past sins? Clean Slate? Nope.

On 4 June, an Australian Financial Review journalist, Stewart Oldfield, unexpectedly took up the story of one of the people on my list. The subs headed it ‘A step too far crucifies small business’. After that article he went to ground on this material and its implications.

On 18 September, even more unexpectedly, A Brisbane Courier-Mail journalist, John McCarthy, wrote an extended Saturday spread on NAB bank victims, drawing from sources including my dossier. The subs headed it 'Crying all the way from the bank'. Nine days later, McCarthy followed up with a second shorter article. It was a strange juxtaposition of acknowledgement that about 50 people had contacted him to complain about bank malpractice (no account of their stories) with the last half devoted to reporting of NAB denial. Reported McCarthy:
The bank at the centre of the initial report, National Australia Bank, denied any wrongdoing or arrogance, and said it had acted appropriately in all cases.
Well that’s all right then. But the evidence says otherwise. Since then McCarthy has gone to ground. Oldfield and McCarthy returned to their staple fare of reporting share prices, market shares, acquisitions and disposals, industry gossip, etc., etc. All white noise.

Admittedly there’s a problem for journalists on the business/finance desks – if you want to get in the door, you have to do it on their terms. This dependence doesn’t stop some journalists (John Durie, Alan Kohler) from taking a more detached perspective. But dealing with corporate corruption – ah, that’s another dimension. Even when the skullduggery is disclosed in the courts and there for public reporting, media executives would apparently prefer to not expose their delicate readers to such harsh material (as longtime finance journalist and court reporter Anne Lampe found at the decaying Sydney Morning Herald).

What goes on behind closed doors between banks and the media generally stays behind closed doors. But a lesson in bank muscle was displayed on Media Watch on 16 October in its ‘bad line for Bangalore’ story. A Daily Telegraph reporter had claimed that ANZ was offshoring Australian call centre jobs in low wage India. But when the Tele reporter failed to get ANZ’s version readily into print, the bank replied with this:
I can confirm ANZ pulled all of its advertising from News Limited, including Foxtel and News websites such as MySpace…Our advertising with New[s] Limited is worth $4 to 5 million and accounts for about 10 per cent of ANZ's advertising budget. Email from ANZ's Paul Edwards (head of corporate communications) to Media Watch.
As odious as is the News Limited outfit, the action by the ANZ highlights the power of the banks as large advertisers and their willingness to use it nakedly.

One arena that corporates find harder to crack is the floor of parliament. But the reportage of corporate malfeasance in parliament depends on hard work and courage, two qualities rarely found in members of parliament. One such individual was Democrat Senator Paul McLean whose reporting of bank malpractice into Hansard became an obsession. Harassment followed (the Labor Government sooled the Tax Office onto him and his staffer to divert McLean from preparation for his appearance before the Banking Inquiry in 1991 – a contemptible abuse of authority), until McLean quit soon after in exhaustion and disgust at parliamentary and regulatory corruption.

Queensland State member for Maryborough Chris Foley has exhibited atypical courage in tabling NAB material in the Queensland House. Foley’s actions were in support of Bundaberg resident Sante Troiani and the loss of his business Wide Bay Bricks through NAB foreclosure. The local Fraser Coast Chronicle duly reported the story, but not before the account was self-censored by the paper after harassment by the NAB.

One element of this story remains peculiar, however. Troiani accuses the NAB of destroying his business on behalf of Boral (with whom NAB had directors in common), a competitor of WBB. This accusation is very serious indeed. Certainly nobody reads the Fraser Coast Chronicle but Fraser Coast residents, but presumably principles are principles, and claims of this seriousness, if left unrefuted, may fester in the minds of untutored readers. So why hasn't the NAB pursued the Chronicle over the reported claim, given its comprehensive aggression towards adverse coverage in the media? Is there the awful prospect that there is substance in the claim?

Mid 2006 saw another example of the NAB attempting to manipulate its image. A complaint from a savvy customer to the Bank Ombudsman relating to the charges on his NAB accounts led to a confrontation that there was systematic overcharging on a number of bank products (ironically, no systematic undercharging).

The problem was symptomatic of the age. Greater diversity and complexity of bank products combined with more software-driven automatic processing and a deterioration in attention to staff training. The problem was not the NAB’s alone.

What is relevant here is that the NAB tried to shut down appropriate media reporting of the issues. Fairfax journalists were harassed; Nick Coates at the Australian Consumers’ Association was harassed. The story, and the extent of the problems, eventually trickled out (c/f Sydney Morning Herald, 14 June), which has helped to quicken the pace at which the NAB has dealt with the backlog over overcharging. Whether the NAB confronts systematically the dysfunctionality of its accounting and processing infrastructure is another matter.

The piece de resistance regarding the NAB and publicity is the case of Today Tonight. The Today Tonight team in South Australia started with a local case of a local builder whose business was foreclosed after a fight with the NAB over negligence and misrepresentation of an insurance policy. The Team then added two Queensland cases and the story went to air on Tuesday 4th April. Today Tonight splits Australia down the middle, and so this story went to air in South Australia and Western Australia.

Given that Queensland figured significantly in the story, and given that the subject is of national significance, the expectation was that the South Australian production would appear soon after on Today Tonight’s more populated East Coast coverage. It didn’t. Why not? Sources in Channel Seven Melbourne and legal circles in Brisbane point to the NAB heavying Channel Seven. So no show. (Incidentally, quess which company has an advertisement on Today Tonight's contact website? The NAB doesn't miss a trick.)

This might explain why Naomi Robson and her Today Tonight team went off to darkest Papua in search of cannibals. Because they had run out of suburban Dodgy Brothers stories. And because corporate Dodgy Brothers stories are not allowed to be on the menu.

Which leads one to ask why one bothers to read the press or watch the television? Especially as ABC and SBS are now being brought to heel.

On Wednesday morning this week, Margaret Throsby interviewed Richard Flanagan, author of The Unknown Terrorist. (As did Kerrie O’Brien on the 7.30 Report. Sorry Kerrie. You’ll soon be following Media Watch and the Glass House out the door. And possibly Margaret Throsby to follow, unless she chooses her guests more circumspectly.)

Tasmanian resident Flanagan recounted how he was unexpectedly thrown into the limelight, when he questioned the close relationship between the private logging company Gunns and the Tasmanian Labor Government. He was accused of being a traitor, and was told by Premier Lennon that he and his writings were not welcome in Tasmania. The Tasmanian media (Murdoch’s Mercury?) carried the official message of Flanagan’s perfidy. (It doesn’t help that Richard’s brother Martin is a Melbourne Age journalist, that pinko paper, equally and publically unhappy with the Gunns/Government marriage. No worries, after Fairfax is taken over, Martin’s treachery will be duly noted and he will be looking for another job.)

Richard Flanagan talks about a ‘cowed and intimidated’ media, of an Australia that is ‘on the verge of a terrible darkness’, in which ‘anyone who challenges power and money is attacked’.

The NAB’s relationship with the Australian media would tend to support Flanagan’s pessimistic assessment. To repeat: 'Active, informed community discussion, and good journalism as the essential elements of good governance.'

Innovation at the NAB

2006-11-01T16:00:00.000-08:00

[Rod Clement, Australian Financial Review]

Evan Jones

The National Australia Bank, always on the cutting edge of innovation, appears to have broken new ground in dealing with unwanted clients.

A&A has covered the NAB before (12 November 2005 deals with the seminal case of a Queensland farming couple, the Somersets against whom local staff committed fraud and against whom the NAB head office destroyed through the court system. That piece also refers to pieces on other NAB victims; 1 December 2005 deals with the more recent case of Sante Troiani, whose successful Bundaberg company Wide Bay Bricks was destroyed by the NAB over an extended period in the 1990s; the Troiani case is also dealt with on 14 July 2005).

Below fragments relating to a current case involving the NAB. A strange setup indeed. Reproduced here in the interests of furthering education on that hall of mirrors that is the banking sector.

The NAB has a client in Tasmania, and claims a debt of approximately $190,000.

Australia and the world: the economic nexus

2006-11-01T14:01:00.000-08:00

Evan Jones

The ‘current account’ table summarises the Australian population’s economic exchanges with the rest of the world for a year. (The ‘capital account’, the other half of the balance of payments statistical structure, summarises the change in the form of indebtedness over the period.) The current account table has its problems, conceptual and measurement, but it remains a useful first approximation of the character of the Australian national economy.

Previous pieces on the current account have appeared on A&A (13 January 2005 – the inconsistency between political/media handwringing and ongoing inaction); 15 January 2005 – breakdown of the current account by its components and their long-term evolution; 19 January 2005 – a comparison of current account figures across selected countries and the lessons regarding national economy differences; 26 January 2005 - a look at the structure of merchandise trade and the escalating net deficit; 7 May 2005 - on the parlous state of expert opinion on the current account deficit; 9 October 2005 – charting of the current account during the Howard Government era, highlighting that Howard’s claim to good governance lacks substance; 14 October 2005 – details on the size and breakdown of Australian overseas indebtedness; 29 December 2005 – another look behind the escalating deficit in merchandise trade).

Attached an updated table of the current account for selected years – the overall deficit and the four components. The merchandise deficit has taken off in the last six years; the income payable deficit just keeps growing. Another year, an increase in indebtedness of $54bn, an ongoing phenomenon replicated by few other countries.