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Issue No. 175 24 April 2003  

Domestic Relations
As the fog of war lifts and attention returns to the domestic phase we find a Federal Opposition imploding as the Prime Minister prepares for the final putsch toward what he sees as his historical mission.


Interview: Picking Up The Peaces
Walk Against the War Coalition convenor Bruce Childs outlines the challenge for the peace movement in the lead up to Palm Sunday.

Unions: The Royal Con
Jim Marr argues the Cole Commission can only be taken seriously by people kept ignorant of the way it actually operated.

National Focus: Around the Grounds
Unions maintain the pressure for peace as the upcoming organising conference takes on added significance, reports Noel Hester.

Economics: The Secret War on Trade
Overseas-based multi-nationals are coming after our film industry, electricity, water, pharmaceutical benefits and even childcare. Or are they? Nobody knows, as Jim Marr reports.

International: United Front
Workers and their unions around the world have possibly never been as united in their commitment to campaign together against the War in Iraq, writes Andrew Casey

History: Confessions of a Badge Collector
Bill Pirie has one of the largest collections of trade union badges in the world. After 20 years the collection now numbers some 6,000 badges.

Politics: Stalin’s Legacy
Fifty years ago last month Josef Stalin died. How could it be that a democratic and socialist revolution produced one of the monsters of the twentieth century, asks Leonie Bronstein.

Review: Such Was Not Ned’s Life
The life of Ned Kelly is what we in the world of journalism term a “ball tearing yarn” so why have writers of the movie adaptation felt so impelled to dress it up with fiction, asks Tara de Boehmler.

Poetry: Osama's Top Recruiter
Through our extensive intelligence networks, we have managed to track down the top recruiter for the global terror network of Osama bin Laden.

Satire: Woolworths CEO Denied Bonus After Company Posts Profit
Woolworths chief executive Roger Corbett was devastated today to report an 18.3% rise in profit under his management over the last year.


 Medicare Bombshell – Bosses To Pay

 Another Cole Man Bites The Dust

 Cheap Indian on Telstra Menu

 Legal Tussle Looms Over Email Laws

 Recycled Training Stitch-Up Exposed

 Contractors Code Fires a Blank

 Sweet Talk – Big Business Style

 Bosses, Workers Unite on Grey Threat

 ANZ Workers Want Cut of Billion Dollar Profit

 Time for Death Penalties

 Union Exhibition for Wollongong

 Nurses in Staffing Stand-off

 North Coast Jobs Saved

 Super Success in Pilbara

 Howard Attacks Education - Again

 May Day Festivities


The Soapbox
Factional Free-For-All
Chris Christodoulou looks at the fallout from the selection of the new Carr Ministry and what it means to the factional warlords.

The Locker Room
The Best Season Since Last Year
Phil Doyle goes trudging through the mud in search of the heart of the matter beneath the corporate biffo

Books on Bombs
In times like these, reading inevitably turns to America and war. Chris White wades through Pilger, Chomsky, Eco, Moore and Vidal.

Postcard from Harvard
Labor Council's Michael Gadiel was elected to give the valedictory speech to this year's Harvard Trade Union Program.

 Tom's Cunning Plan
 Robert's Conquest?
 Success Breeds Contempt
 Join the Dots
 Still Walking
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Tool Shed

Galoot in a Suit

Peter Costello smirks his way into the tool shed this week after his softly-softly approach to regulating corporate cowboys has exposed the Australian taxpayers to a bill of nearly $6 billion dollars - and it all stems from a cosy relationship between a shonky insurance company and the Liberal Party.


The smirkin' merkin, Peter Costello tried to avoid being crucified over Easter by burying the HIH Royal Commission report on the eve of the holidays, but the largest corporate collapse in Australia's history has the Liberal treasurer's fingerprints all over it.

It comes as no surprise that Costello would wish Neville Owen's findings would go away as this wasn't the Federal Government's favourite Royal Commission over the last summer. That honour went to the Cole fiasco, but the names headed for the high-jump out of this one are all mates of the Liberal party establishment.

It was Costello who approved the takeover of FAI by HIH. FAI had a dubious history. As far back as the seventies FAI struggled to get approval to operate as an insurance company, until John Wisnton Howard became Federal Treasurer and FAI magically gained approval in 1978 - against the advice of the insurance industry regulator of the time. This, of course, had nothing to do with the fact that the then FAI boss Larry Adler was a major donor to the Liberal Party's 500 club.

Fast forward to 1996 and Costello, as the Federal Treasurer institutes a major "reform" of regulation of the financial sector. This is how the Australian prudential regulatory Authority (APRA) was born.

APRA is Costello's baby. In 1998 Mr Costello gave a speech to the 10th International Conference of Bank Supervisors where he said in relation to APRA: "They have boards of directors or commissioners responsible for operation and administrative policies, and are accountable through me as Treasurer to the Parliament of Australia." It replaced separate regulators for the banking, insurance, finance and credit union sectors - allowing Costello to slash 150 jobs in the process. It's brief was "soft surveillance of these institutions, with the emphasis on working with the industries on monitoring their financial condition". APRA has admitted in the year-long HIH royal commission to being under-staffed, under-qualified and under-funded. As early as 1999 staff were internally complaining that APRA was not acting as an effective regulator. It's "soft surveillance" approach was a green light for the corporate cowboys.

It was around this time that Costello approved the HIH takeover of FAI insurance. In doing so the Federal Government has been implicated in the HIH collapse, as the Howard-backed FAI has been seen as the "Trojan horse" that contributed so much to HIH's downfall. It is also the basis on which the HIH Liquidators are suing the Federal Government to the tune of $5.6 billion in a place that will be familiar to the sensitive Costello, the very generous ACT Supreme Court.

Costello, of course, used the same jurisdiction to sue Bob Ellis and his publisher Random House over allegations in Ellis's book "Goodbye Jerusalem". How ironic that he finds himself back there again, although this time I doubt he'll be smirking in the public gallery.

According to the Sydney Morning Herald, Costello's own hand-picked advisory panel, the Financial Sector Advisory Council - told Treasury in 1999 that "HIH had been sharply undercutting insurance premiums in a bid to win business and that the whole sector needed monitoring".

Even so, Costello persisted with his "softly-softly" mates at APRA:

"If I sought advice on solvency issues I would seek it from APRA which is the body which is responsible for solvency issues," said clown-prince Costello in parliament. "I acted in accordance with APRA's advice at all times." The authority was so incompetent that APRA's Craig Thorburn presented a slide on a key HIH report even though he had not even read it.

Now the galoot in the suit has cooled somewhat in his enthusiasm to be responsible for corporate governance in the financial sector; on the 7:30 Report Costello found somewhere else for the buck to stop: "Let me tell you where the buck stops. It stops with the enforcement of the criminal law against 20 people who have been referred to the Australian Securities and Investments Commission. That's where it stops. The buck stops with the company directors who, if they breach the law, are liable." APRA is obviously no longer "accountable through me as Treasurer to the Parliament of Australia".

A series of inevitable re-arranging of the deckchairs is now taking place, with the inferred blame being sheeted home to HIH executives and key regulatory mandarins, many of whom are now conveniently left the scene, such as Thorburn (who now is a honcho at the World Bank in Washington).

The Minister for See No Evil takes his place in the Tool Shed this week, where he can join his mates from the big end of town - some of whom will hopefully have somewhere else stay in the not too distant future.


The most inspiring interpretation of this week's tool get's a souvenir edition of Ship of Tools. Deface the Tool of the Week, click the button above to post your artwork, fill out the form and send your entry in and we'll post the winners next week in the Tool of the Week Gallery.


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