This is a beat up

This morning there were breathless reports in the Australian that Victorian Treasurer  Tim Pallas  has shares in Transurban. For non-Victorians Transurban is the company that owns the CityLink road network and earns lots of toll revenue. It has just got a sweetheart deal from the state government whereby additional tolls earned on the CityLink project will be used to finance another road project.

The Andrews Government granted operator Transurban a 10-year extension of tolls on CityLinkto 2044-45, to help fund the $6.7-billion West Gate Tunnel, which is under construction.

Under the deal, Transurban is spending $4 billion to build the West Gate Tunnel, along with a contribution from taxpayers.

So I read the article.

Victorian Treasurer Tim Pallas holds shares in the transport infrastructu­re company that stands to make $37.3 billion in extra tolls from motorists in exchang­e for investing just $4bn in the Andrews government’s West Gate Tunnel.

Sounds bad. But then:

Mr Pallas’s register of members­’ interests shows he has a “Blue Chip 20 Long Term Equity­ — Series 3” account with Westpac, made up of shares in the top 20 ASX companies. Transurban is currently No 15 in the ASX top 20.

Effectively he holds shares in a unit trust.

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18 Responses to This is a beat up

  1. The BigBlueCat

    If Tim Pallas holds the shares personally, then he’s got some explaining to do. That they are in a trust not under his control makes it a bit grey – if he knows the shares are in the trust, and he (as state treasurer) issues contracts to a company that the trust invests in, he may still have a problem of pecuniary interest.

    Not sure I’d call it a beat up, but there does need to be some investigation into what he knew and how much involvement he has in the investment decisions of the trust, and whether he should reasonably know that issuing a government contract might give him a personal financial advantage.

    I don’t think it’s as cut-and-dried as “effectively he holds shares in a unit trust”, especially given the intent of the trust to invest in the ASX top 20. It’s up to Pallas to stay informed. The optics on this are really bad for him.

  2. Empire 5:5

    Effectively he holds shares in a unit trust.

    If he knows he will personally benefit, he’s conflicted.
    If the trust is truly blind to him, he isn’t conflicted.
    If he is conflicted and didn’t recuse, there is a public interest issue.

    The MSM is an institutionalised beat up.
    That’s showbiz.

  3. John64

    Anything that Tim “Cane Toad” Pallas is involved in is, almost by definition, bound to be ethically and morally dubious.

    You don’t get to be one of Dodgy Dan’s two chief parliamentary henchmen by being a cleanskin.

  4. Dr Fred Lenin

    Dreadfull beat up ,everyone knows that career politicians never derive financial advantage from their office . During and after their creers ,never been known to happen . Such calumny is posted by extreme right wing racist homophobic islamophobic denialists to try to dicredit these devoted altruistic saints .
    Shame on youse all for thinking like this .

  5. Empire 5:5

    From what I’ve about his ground game, Pallas is old school Labor.

  6. stackja

    If LNP MP, the ALP would be calling for his resignation. And MSM would join in the pile on. Since ALP move on nothing to see here. Ain’t politics fun.

  7. 2dogs

    The problem with these beat-ups is they basically mean that politicians can’t really invest in shares at all.

    Since they then have to invest in something else, they end up investing in real estate.

    As a result, we have an actual, not beat up, problem with the pecuniary interests of politicians when they set the laws governing real estate holdings.

    We get laws that advantage existing real estate owners relative to the economy in general.

    Too much restriction on subdivision, for example. They don’t want their investment diluted.

  8. rickw

    Effectively he holds shares in a unit trust.

    In corporate land, if you were placing orders with this company, and held their stock in this manner, you would get fired.

  9. Genghis

    Sinclair,
    You are perfectly correct. Tim would not have known that Transurban came into the Trust BUT 10 years of additional tolls is something to debate. Ten years is an incredibly long time and the cost to trucks enormous. I have had a conversation with a RTA guy who said in effect the deal is dodgy (because the extra length of the tolls) and perhaps we should look at what transpires between Transurban and Labor in donations?

  10. Mark A

    The more important question for me, is this the best deal for Victorians?

    In my opinion it’s a lousy deal.

  11. Dr Fred Lenin

    If there were no career politicians these problems would not arise .
    Also with one term politicians the transurban contract would span two and a half different governments ?

  12. 2dogs

    If there were no career politicians these problems would not arise .

    How do you figure that? True Believers would also have their own money which they would want to invest somewhere.

  13. Fred

    I think you’ll find most Australians own shares in Transurban, either directly or indirectly.

  14. The BigBlueCat

    2dogs
    #2966168, posted on March 21, 2019 at 7:40 pm
    The problem with these beat-ups is they basically mean that politicians can’t really invest in shares at all.

    They can … they just can’t put themselves into conflicts of interest. Simples. But Tim Pallas and self-interest at the expense of public benefit go together like a hand in a rubber glove …..

  15. hzhousewife

    I think you’ll find most Australians own shares in Transurban, either directly or indirectly.

    Exactly.
    That rabbit-hole is infinite.
    The vast majority of people with a Superannuation Fund have NO IDEA what shares they hold, hence they are all compromised.

  16. Percy Popinjay

    In my opinion it’s a lousy deal.

    What, almost as lousy as forking out $1.2 billion of taxpayers’ money not to build a road?

    #theyshouldallbeingaol

  17. FelixKruell

    I think you’ll find most Australians own shares in Transurban, either directly or indirectly.

    But most Australians don’t decide whether to grant Transurban rights that may significantly impact their share price/dividends.

    It’s a clear conflict – he knew (or should have known) he had an indirect interest in Transurban, and that should have precluded him from being involved in the deal (or should have forced him to divest).

  18. John A

    The BigBlueCat #2966046, posted on March 21, 2019 at 6:26 pm

    If Tim Pallas holds the shares personally, then he’s got some explaining to do. That they are in a trust not under his control makes it a bit grey – if he knows the shares are in the trust, and he (as state treasurer) issues contracts to a company that the trust invests in, he may still have a problem of pecuniary interest.

    The “problem” of pecuniary interest and conflict of interest is built into our political systems.

    The primary qualification for an MP is to be a citizen of the electorate (say the State in this case).

    All decisions made by a government are meant to be for the good of the State and its citizens (I know, “yeah, right”).

    It is therefore conceivable that every decision will benefit the Cabinet members making them.

    The real question is about transparency – was there a need to disclose anything closer than a pecuniary interest equivalent to all other citizens of the State?

    So the best questions are:
    a) how much does the public benefit? (hence 10 years? Is the tunnel a good project to be funded? Why was East-West canned, but this tunnel gets the go-ahead? etc)
    b) what else is happening? (hence donations, MP benefit at the expense of the public? Unions? etc)

    If it is a bad deal for the State, then sack the Cabinet/government. If there is other stuff going on, then sack Dodgy Dan and his government.

    But heads must roll instead of merely nodding…

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