Hypocrisy of Townsville’s beneficial enterprise elite
The Townsville Bulletin editor-in-chief, Mr Ben English, and a bevy of Townsville’s most influential business leaders have come out in the News Ltd press as a cohort of patriots in support of the embattled Townsville Mayor, Cr Jenny Hill who approved a $18.5 million beneficial enterprise inducement to the Indian-based coal mining conglomerate Adani Enterprises.
As far as perceived political clout is concerned, Mr. English understands such an unprecedented display of powerful people from the property development and general business community is a striking endorsement of the financial inducement given by the Mayor.
It intentionally raises the perception of authority in the City. The sitting Mayor yields yet again the dividends of the mainstream media’s support of developer enterprises. Yet serious questions about proper governance and the strength of community-centric leadership have been exposed by this clarion call and by the multiple unfavourable reviews carried out of the Mayor’s performance.
Public criticism of the Adani inducement decision continues to escalate over the local government’s generosity of gifting $18.5 million to the Indian oligarchical enterprise for its airstrip in the coal fields of the Galilee Basin.
Little do the broader public know, the Adani inducement is just the beginning of leveraging taxpayer’s natural capital. It is an early representation of the sort of cash the Mayor and the business community is wanting the taxpayers to fork out to win the favour of big investors and backing by beneficial enterprise partners.
The cornerstone of the Mayor’s business strategy is to win more jobs at any cost. Of course, more jobs means more growth and therefore higher demand for housing, retail shops and newspaper subscriptions.
Council land at Woodstock 40 kilometres south-west of Townsville has already been pledged to a New York consortium as an equity stake to build an ion battery gigafactory.
But is the taxpayer really at the heart of the Mayor’s agenda, or is it driven by jobs for political gain and therefore personal and selfish gratification?
Well, let’s look at a similar scenario.
Double standards at Yabulu
In 2015 when the directors of Queensland Nickel requested a $35 million inducement to retain 700 high paying direct and indirect local jobs in Townsville, the Premier and Mayor rejected the job opportunities and Queensland Nickel went into administration.
QNI veterans with 30 years continuous service at Yabulu were made redundant, breaking the heart and spirit of the entire community.
The world nickel price dropped substantially and eventually, the mining downturn became widespread. It was not fortuitous for anyone in the entire City except the Labor political elite. The QNI directors wanted to keep the jobs and the nickel refinery open. Even under Administrator control, the Labor Premier rejected Queensland Nickel’s appeal for support.
Managing Director Clive Mensink at the time said: “The Queensland government had made it clear despite the nickel price being the lowest in 15 years, it has no interest in assisting Queensland Nickel in providing continued employment for over 800 families in Townsville”.
Why didn’t the Mayor establish a beneficial enterprise instrument than when it was completely legal under the Local Government Act as it is now?
It was pure political bastadary because the company had donated funds to the Clive Palmer United Party at the time. But the Labor party took political donations from business and union movements also.
Yet the do anything for jobs slogan saw 700 direct jobs and 1000s of indirect jobs lost contributing to Townsville’s shameful reputation as the bankruptcy, suicide and mortgagee in possession capital of Australia. Soon after the population shed 9000 people.
Where was the coalition of business leaders then?
So the editor’s justification for the Adani inducement and the sudden patriotism of the business leaders towards the Labor machine that sacrificed 1000 families is a baffling scenario indeed.
Many residents who are in favour of the mining industry are bemused at the disloyalty and cannibalism of Labor towards its Queensland investors. The Townsville ratepayers are reeling over water insecurity, no rates increase pledge by the Mayor that saw diligent residents slapped with an increase in rates, and of course, the 144 jobs the Townsville City Council sacked just months ago.
Anecdotally, disgruntled residents have asked, if the business opportunity in the coal mine with Adani has minimum commercial risk worthy of a Council inducement, why hasn’t News Ltd or the Townsville business leaders put forward the $18.5 million for the airstrip themselves as a viable commercial going concern?
It’s a pertinent question considering the confidence with which Mr. English put forward the 18.5 million inducement argument.
Beneficial enterprise and Bligh regionalisation policies
Establishing beneficial enterprises with private corporations is central to the Queensland government’s reform of local governments across the sunshine state.
This type of local government and business partnership instrument, enshrined in the Local Government Act, has a very powerful capacity in fuelling population growth and an employment plan that is necessary for economic stimulation, development and sustainable growth.
Unfortunately, this business model has also yielded serious allegations and charges of corruption by Mayors, CEO’s and even the wives of a Council executives.
Over the past 10 years, a quasi-beneficial enterprise model has been played out by special state industrial development and priority development areas under successive Labor party administrations, and for a short 3-year term, the Newman Liberal government.
The inspiration for the beneficial enterprise model started with the regional revitalisation plan under the Bligh Labor government and her government’s regional cabinet meeting initiative.
Townsville as the “Capital of North Queensland” was coined during the regionalisation taskforces set up under this policy agenda.
Brisbane City Council was not included, and to this day, operates under its own Brisbane City government legislation and associated enterprise models.
Back in Townsville, the Waterfront Priority Development Area (WPDA) laid the planning and legal framework for the North Queensland stadium development. The associated private developments were favourable with planning cost waivers to investors that enabled faster capitalisation of projects and minimisation of risks.
These special development zones are state government controlled with the council offering land and headworks concessions by and large. But development approvals are the concern of the state.
These state government and private partnership models have focused on holistic relationships with capital suitors that ensure financial and political risk minimisation, aiming for a win-win benefit for all the political and enterprise players.
Based on tenants in common legal framework, the state development areas and the beneficial enterprise model operate like a body corporate, where multiple entities exist separately on gazetted parcels of land and all lot owners have an interest in the common property.
As the Adani fly-in fly-out hub deal has been inadvertently exposed thanks to the Townsville Bulletin’s anguish over the Mayor’s political value to the bevy of beneficial enterprise stakeholders, the common property is no longer just council’s obligation to community service. The depth to which unencumbered associations seek to flourish between private corporations and political parties have really been untested.
The best example of cleaning out the swamp is a term the United States President, Mr. Donald Trump coined for the media and political elite in Washington and New York during the 2016 presidential election. Australian polls are predicting the same backlash against mainstream political parties and the progressive left in Queensland at the next state election just around the corner.
For example, the Townsville City deal between the Federal, State and Local Government is framed like a beneficial enterprise model where the property is owned by the federal and local Council but the charter of management and administration is delegated through a Board of non-executive Directors, government Ministers and Advisory Boards.
The common property of the Townsville City Deal contract is the private and personal data of citizens and businesses, and the sensors in the machinery that yield the digital payload, creating information to improve the intelligence of the beneficial enterprise model and cultivate more capital and profit returns.
Beneficial enterprises do not require the passing of state legislation or Treasurer approval as is required if a council seeks to set up an arbitrary company. Instead, the Council has the authority to approve the creation of a beneficial enterprise entity independently, ensuring Councils maintain their financial viability as the Beattie Labor government expected in 2003.
Impact of poor leadership in governance
Townsville’s business leaders, the Mayor and multiple Labor Premiers of Queensland have sacrificed their personal reputations, budgets, financial powers and professional credibility on the success of the Peter Beattie/Anna Bligh quasi-beneficial enterprise model over the past 10 years. It has been controversial in the midst of local government amalgamations.
The dogma of the Beattie government, acting on the floored advice and denying empirical evidence insisting that the amalgamation of Thuringowa Council and Townsville City Council was good policy. It turned out it wasn’t a good policy at all according to Brian Dollery, Professor of Economics and Director of the Local Government at the University of New England.
Leadership efforts, especially in the business community, have received the widespread acknowledgment they warrant. And for the most part, they are worthy of praise and all due respect.
However, it is the inadequacy and non-responsive, highly inefficient boards and advisory boards that are tenants in common on governance that has dragged the resources of leadership and astute statesmanship away from the interests of the broader Townsville community. Paralysis by analysis is the colloquial term.
The focus of the City’s planning decisions has been on the quagmire of that in the city centre’s revitalization and the expansion of Townsville’s urban sprawl. It continues today with the current development of a planned 30,000 satellite community at Elliot Springs to the south on the outer fringe of the Townsville population centre.
The impact on infrastructure and scale of utility costs required to maintain such an urban footprint is expected to put upward pressure on rates and service fees. With the remodelled corporate structure at Council, the executive remuneration is set to skyrocket while frontline services decline. Residents are directly impacted and rightly concerned.
The previous City Plan pushed up the costs of local utilities and saturated the residential housing market with unsuitable housing and city unit developments while suspending the city’s livability credentials and ambitious goal of attracting 200,000 population growth by 2016.
Under the new Council’s director for planning, the inputs provided by city leaders via various surveys were discredited and needed correction which has been acknowledged in the revised City Plan. But again, population projections for the city are significantly overcooked.
In 2015, Townsville residents identified the top three priority strategies for economic growth; transport, culture and entertainment and vision. All three were disregarded by the Townsville leadership in favour of housing, CBD revitalisation and the development of a sports stadium.
Furthermore, the Queensland government reported in 2015 in its Public Notification Submission Review Report into the WPDA that infrastructure and sustainability ranked as the two lowest priorities, while innovation ranked nowhere at all in the report.
A Pure Projects Strategic Review in 2017 recommended both the CBD revitalisation and WPDA was too narrow in scope and that the Strand, Radical Bay, Rowes Bay and Castle Hill should be included in the city’s master plan, promoting the vision, water transport and connectivity to green spaces and culture and entertainment. All reports have been a slap in the face of the Mayor and vindication for the 273 residents surveyed in 2015.
Meanwhile, where the regional property developers on the Gold Coast, Ipswich, Logan and Moreton Bay and other population growth cities across the State could turn a sizable profit, the Beattie/Bligh private enterprise and corporation model at the disposal of local government yielded property development election donations that matched the gold rush that had been promised.
Where is the accountability
So this begs the question, who is really behind the Mayor and what do they want?
And is the Mayor leading with a visionary contribution or following like a puppet of state, federal and private enterprise?
The Pure Projects Report gives an unambiguous insight as does many other reviews and reports including the Nous Report conducted since the Council amalgamations in 2008.
To the editor of the Townsville Bulletin, financial inducements are normal. The seedlings of conflict of interests are even worthy of a good boasting with editorial swagger.
But should Mr. English’s representation of the potential misconduct in a professional context be condoned on behalf of the business community? Of course not! So the people of Townsville are righteous in demanding proper transparency and accountability.
It is required by law of all professionals whether they be lawyers, accountants, financial planners and real estate agents that are engaged in negotiating on behalf of their client’s interest to disclose the benefit. In real estate circles, it is called “disclosure of beneficial interests”. A statutory form must be completed in fact and signed by the client.
So in this context, financial inducements without proper disclosure are grounds for dismissal or censure by a court on the grounds of serious misconduct. The client may seek remedial damages including any liability that requires the professional to return any levy or commission.
The Pure Projects experts and the people of the city are singing the same tune of vision, connectivity, culture and entertainment. So why is the Mayor’s focus still about providing a beneficial enterprise and the interests for facility or housing developments rather focusing on the visionary contributions from the community?
Funding an airstrip in the Galilee Basin couldn’t be any further from the stated vision of credible experts.
Again, Pure Projects highlighted only yesterday that the focus of the community endorsed strategies should be focused on the highest and fastest growing demographic of the City, the millennials. Not on Adani’s airstrip for the reluctant workers forced to reside in a city that has returned to the good old days of a “Brownsville” livability reputation.
Catastrophe of the political class
Well from the editor of the Townsville Bulletin to the property developers and aspiring enterprise beneficiaries of the promised land of private capital in North Queensland, enter the largest private cash cow Townsville has ever had, Adani Enterprises.
A majority of the North Queensland people are in favour of industry, as is this ugly duckling. High paying jobs in the mining and manufacturing sectors generate jobs. These jobs are cherished.
However, the taxpayers’ thoughts of gifting taxpayers money to an international private company aggregated in offshore profits have gone down like a hot Indian korma even with the pro-Adani supporters.
Its a problem not only for the government but also Adani who has a barrage of Green adversaries already. But they are mostly from out of town. The new adversaries are local ratepayers.
And the question on everyone’s lips is; why didn’t the owners and heads of the tenants in common model facilitate a shared fly-in fly-out hub proposal in the first place? It could have avoided the dutch auction carried out by Adani for maximum financial gain.
Queensland Labor threatened to take it’s bat and ball from handling the Northern Australian Infrastructure Fund (NAIF) from which Adani is seeking a $900 million loan. The deputy premier, Jackie Trad and Premier Annastasia Palaszczuk exposed their ideological grudges.
The Labor leadership grudge and the Adani exclusive fly hub decoy has also exposed the effectiveness of the Minister for State Development, Dr. Anthony Lynham who has failed to engage in the Adani fly-in fly-out negotiations in the interest of Townsville, Rockhampton and feeder regions such as Livingstone Council.
This is a critical failure of the cohesion in the Labor-sponsored local government legislation and the beneficial enterprise framework in that it requires no State government coordination.
It highlights the extent to which the political elite have become disingenuous to the interests of good governance and even prepared to flaunt the international conventions on bribery and corruption which Australia has signed
Reality of Fly-in Fly-out Hub
Adani could have never operated an exclusive air transport hub in the context of its Carmichael mine construction and operations because of the operational risk of climate events such as cyclones and the perpetual threat of extreme left disruptions and protests.
Also, the political payoff of Central and North Queensland state capture is paramount to the Adani Australia strategic plan. All of these potentially catastrophic threats are captured by the Adani Australia risk and actuarial reviews. It’s a certainty!
Any astute team of political analyst, actuarial and business advisors would have advised the Heads of Government – the Premier, Ministers and Mayors of these opportunities, but only if the two regional hubs could work together as a team in the best interest of the Queensland and local taxpayer.
Let’s face it, it’s just as cost effective to fly from Brisbane or Cairns to the Galilee Basin just as it is from Townsville or Rockhampton.
The political and commercial fallout between Rockhampton and Gladstone councils is occurring now because Gladstone did not enter the race as a financial player, the Rockhampton Mayor Margaret Strelow said. Cr Strelow “made it clear the bidding process quickly evolved into a shrewd commercial negotiation”, she commented to the Morning Bulletin.
But while climate change and the social policy of women’s rights are central to the Labor state government agenda, the Adani brand for its coal business is a poison chalice in the Premier Palaszczuk party room. Yet we have three of Queensland’s most powerful woman unable to work together in the best interest of the community.
And in the wake of the Queensland Crime and Corruption Commission (QCCC) investigation of local governments that recommended the banning of financial donations from property developers, which the Premier has adopted, it stands to reason why the biggest beneficiary of the political and private capital alliance is defending a mayoral puppet that empowers the strings of the beneficial enterprises as they see fit.
Adani Australia and the editor of the Townsville Bulletin just proved it.
The Mayor’s reason for gifting the $18.5 million, with a right to levy Adani if the full scope of promised workers does not live in the City, was to shore up thousands of promised jobs. And the business certainty and economic prosperity that the fly-in fly-out hub could guarantee. However, Adani didn’t publically disclosure this guarantee.
The editor at the Townsville Bulletin and its sister paper the Morning Bulletin, on the other hand, leveraged the two horse race drama to maximise its readership.
Rather, Mr. English advocated with naked naivety on behalf of the political elite, collectively vying for commercial mileage while the News Ltd bulletins protected it’s number one source of beneficial enterprise propaganda, the local establishment and “Townsville’s captains of industry”.
Keep in mind from a legal and ethical standpoint, the Labor government’s Local Government Act permits such practices to occur unabated despite the fact the Beattie and Bligh government would not release the modelling to the local councils.
So this political policy decision on local government amalgamations was simply an idea by the “smart state” Premier who was a self-confessed media tart, Premier Peter Beattie.
Take a look at the elite membership of Townsville Enterprise, property developers, media and local governments are dominant players. And who is at the centre of the Townsville businessman coalition supporting the embattled Mayor? No one other than Ben English and the Townsville Bulletin of course.
Mr. English said, “The strong endorsement of the Townsville City Council’s inducement deal with Adani will come as a shock to some in the community this morning.”
Mr. English continued and said “As business leaders pointed out in the open letter published on this page today, Townsville needs to come together and work together and work towards reaping the benefits this mine and the associated economic boost will bring to our region.” he said.
Where were the Townsville Bulletin and Townsville’s captains of industry when Queensland Nickel and 700 direct and thousands of indirect jobs were needed?
Of course, Mr. English has been promoted and will be redeployed to head up News Ltd’s Gold Coast Bulletin. So much for local commitment.
And who did the business modelling for the $18.5 million inducement deal?
KPMG, one of the big four accounting and auditing firms that have become the most powerful political players teaming with skilled actuaries and enterprise risk assessment capabilities.
Townsville City Councils’ Chief Finance Officer, Mr. Matt Thompson was reportedly at the centre of the Adani negotiations. You guessed it, Mr Thompson is an ex-Deloitte and Price Waterhouse Coopers delegate.
So why didn’t KPMG model the probability that Adani was not intending to have an exclusive fly-in fly-out hub in the first place?
Such an observation during the Adani negotiations would have negated the need to pay the collective $37 million inducements offered by Mayor Jenny Hill and Mayor Margaret Strelow. All that was needed was a phone call to the Rockhampton Mayor Cr Strelow and the State Minister Mr. Lynam.
Sentiments of the Local Community
As the Mayor of Livingstone Council, Mr. Bill Ludwig and his acting mayor Chris Trevor said, this is “un-Australian” and are “filthy and dirty” because of the “postcode discrimination”. Mr. Ludwig said it was a “sad day for political integrity and Central Queensland”.
Livingstone Shire won the right to de-amalgamate from Rockhampton in 2013, so the bitter rivalry between the state and Livingstone council runs deep.
For the residents and ratepayers, the very least that could be expected is the faceless media in control of the beneficial enterprise institution and the political puppets could learn from the embarrassing foolishness of the Adani fly-in fly-out decoy.
Who knows, a miracle might fly-in on the Adani airstrip and listen to the majority who are screaming out for a better vision, connectivity, culture and entertainment solutions for the North Queensland community, and create the desirable livability features that will retain the Adani workforce beyond the construction phase of the backroom deals.
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