Indue and the small matter of political corruption

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.

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.

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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 Parity, 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 superior.

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 largesse.

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 manage 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.

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About Eddy Jokovich 50 Articles
Eddy Jokovich is a Sydney-based journalist and producer of many books, magazines and handbooks and has worked as a war correspondent, journalist, lecturer in media studies and production.