Picture this ….
A group of people (individually, not collectively) buy shares in a company. These people did not just buy the shares, they bought them on margin (with loans).
Before buying the shares, these people did not do a lot of research into the company they were buying shares in. They though investing was a good idea and the shares in this particular company were in the right sector or the right geography. The did not look closely at the business model, the management or the risks.
One day, the company these people invested in announced that one of the risks in the business, unfortunately eventuated and that shareholders would need to stump up additional money to fix the problem. Numbers in the order of 2-5% of the value of the investment.
The investors were furious. The managers who made the bad decisions that led to this additional capital requirement, were long gone and sitting pretty having already cashed out.
What to do, what to do?
Do the investors suck it up and put up the extra capital? Do they sell their shares, albeit at a loss? Do they go after the managers who created the problem? Do they go after the people did the due diligence on the sale (their lawyers)? Do they go after the people into the investment (their brokers or the promoters)? Do they do all of the above and more?
What to do, what to do? Such a hard question.
Well. If if these investors are in Victoria, they don’t have to do anything because it seems that the Victorian government is again in the business of bailing out investors and making them whole for problems caused by other people.
Buy a unit in a block in Victoria. Do no research into a problem that has apparently been around for 20 years but only recently highlighted by Grenfell and Spencer Street towers.
Get the numbers for remediating the problem and then go to the Victorian government, with the aid of course of a prior Liberal Premier (liberal in name not in political value). And Bob’s your uncle —- bail out. Let the Victorian tax payers make whole a handful of Victorian investors, many of whom are sitting on large capital gains anyway.
And then, with extreme chutzpah, the Premier of Victoria, having committed to bail out a handful of Victorian investors, demands that the Commonwealth government bail the Victorian government and then cry poor when he gets a no.
Follow the train. A (relatively small) handful of Victorian investors ask for money from every Victorian citizen to protect and enhance the value of their private investments. And then the citizens of Victoria ask every Australian citizen to make the Victorian citizens good for making good the investments of a handful of Victorian investors.
Social justice – Victorian style. Get the poor unemployed in remote Australia to compensate property investors in Melbourne. Political economics Victoria style. Sorry. Venezuela style.