Monday, June 22, 2009

And the Ozcar goes to “Waiting for Copenhagen”

It is quite appropriate that a major Australian political scandal revolves around a humble 1996 Mazda Bravo. The Bravo motor is apparently known for suffering cylinder head issues and it is clear that our parliament has blown a gasket or two in the last few days over it. But the Bravo is also a workhorse utility vehicle, not a SUV as the world calls them but a “yeoot”, beloved of Australians and ideal for carrying corflutes and campaign messages for politicians on the move such as Kevin Rudd and Wayne Swan. In giving the pair an election ute each, what John Grant wanted in return was access to the $2 billion mush fund that the government in its stimulatory wisdom decided the already wealthy car dealer industry needed a prop-up to survive the global recession.

You’d think that IPCC data would suggest that putting money in the car dealer industry was not an example of “picking a winner” in the 21st century green economy. But you’d forget that Australia is still ruled by twentieth century institutions who have more pressing matters to discuss than irreversible climate change. To get this long-term problem to the fore of political opinion is difficult enough when the politicians are judged by what they do every three years. But it is made worse by the news cycle which demands a narrative for each day. The only feedback mechanism of interest to Australian politics today is the reaction to that daily story.

Today’s story was summed up in a remarkable 7.30 Report tonight on ABC where Kerry O’Brien interviewed Kevin Rudd and Malcolm Turnbull back to back. All the key issues of the day came out and both politicians stoutly defended their own position while attacking the other. But does it matter who send what to whom in which channel? What did not come out from interviewer or interviewees was why the government is guaranteeing the car dealership industry $2 billion to stay alive. Is this appropriate behaviour for a country that is struggling to meet its commitments to become a low carbon economy?

In their Utegate Explained (simultaneously despising and using the dreaded –gate cliche) Crikey goes through all of today’s players and all of the rival claims. Beyond the politicians shouting at each other to resign, there is a rich dramatis personae of car dealers, political advisers, journalists and lobbyists who are all seeking either money or favours. None, it would seem, are remotely worried that the scheme is in any way improper.

The journalist mentioned by Crikey is News Ltd’s Steve Lewis. Lewis says the story was set in motion when he rang the boss of Ford Credit on Monday. Lewis was chasing up with Greg Cohen whether Ford's finance arm had been asked to give assistance to John Grant at the same time Ford was seeking access to the $2b OzCar scheme. Cohen ducked the questions but Lewis said the conversation set in motion the chain of events. Like the concocted email he would later write about, this is self-serving rubbish from Lewis. The genesis of the problem goes much further back.

On 5 December 2008, Treasurer Wayne Swan announced the establishment of a new car dealer finance scheme. As a result of the global financial crisis, the government stepped in with a transitional $2 billion Special Purpose Vehicle (SPV). Despite the name the SPV wasn’t a car; it was a finance package. The package would be available to provide liquidity for 450 car dealers left without wholesale floor plan financing when financiers GE Money Motor Solutions and GMAC left the Australian market. The SPV became known as ‘OzCar’ and was legally established as a Trust on 2 January. It soon became the Car Dealership Financing Guarantee Appropriation Bill 2009.

When the SPV legislation finally reached the Senate in June, the Opposition referred to the Economics Legislation Committee for inquiry and report by 23 June. This was strange behaviour from the Opposition. Don’t they have car dealer mates too? Was this the set-up for the “smoking gun” they promised against the Prime Minister. Through Andrew Charlton, Turnbull knew that Grant had gotten favourable treatment from the government. Through friend and former Treasury office Paul Lindwall, he faked an email to the civil servant Godwin Grech that outlined the preferential treatment. According to The Punch, Lindwall “has links” to Grech.

Grech was invited to give testimony to the Senate Enquiry on Friday. With his superior at his side, Grech was like a rabbit in the headlights. When Greg Cohen from Ford Credit came to Canberra seeking funds from the yet-to-exist OzCar, it was Grech who dealt with his claim. Liberal senator Eric Abetz established that Grech told Cohen of the plight of at least three car dealers with Rudd and Swan’s mate John Grant one of them.

Abetz set the trap by questioning the reluctant Grech. The problem is that the opposition reached too high and aimed for Rudd when Swan may have been there for the taking. Abetz asked whether the official had personally sighted any correspondence, “email, note, memorandum or any type of documentation” from the Prime Minister’s office to Treasury—concerning Mr John Grant and the OzCar facility? Grech’s eyes-down response was immediately legendary: “My recollection may well be totally false or faulty, but my recollection—and it is a big qualification—but my recollection is that there was a short email from the PMO to me which very simply alerted me to the case of John Grant, but I do not have the email.”

Who wrote the email? Who knows? It could well have been Julia Gillard for all I know. She had both motive and plausible deniability. The email is of no consequence. It was a communication designed to deceive. When we route around this damage, we find that while the Government and Opposition have their sport, they will eventually patch up their modest differences in the Senate. They will then spend $2 billion on fatcat car dealers that do not need our help while deferring spending on more pressing causes on the dubious grounds that “we must wait for Copenhagen”.


Ann oDyne said...

great post
but I have read it twice -

"The SPV would be available
to eligible provide liquidity for
450 car dealers left without wholesale floor plan financing when financiers GE Money Motor Solutions and GMAC left the Australian market."

Derek Barry said...

fixed - made more sense with the word eligible ineligible.