And the Ozcar goes to “Waiting for Copenhagen”

It is appropriate a major Australian political scandal revolves around a humble 1996 Mazda Bravo. The Bravo motor is known for suffering cylinder head issues and our parliament has blown a gasket or two in the last few days over it. 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 the government in its stimulatory wisdom decided the already wealthy car dealer industry needed to survive the global recession.

IPCC data suggestsputting money in the car dealer industry was not an example of “picking a winner” in the 21st century green economy. But Australia is still ruled by twentieth century institutions with 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 is the reaction to that daily story.Today’s story was summed up in a remarkable 7.30 Report where Kerry O’Brien interviewed Kevin Rudd and Malcolm Turnbull back to back. Both politicians stoutly defended their position while attacking the other. What did not come out was why the government is guaranteeing a twentieth century industry $2 billion to stay alive.

In their Utegate Explained Crikey goes through 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 are remotely worried the scheme is in any way improper.

The journalist mentioned by Crikey is News Ltd’s Steve Lewis. Lewis says he rang the boss of Ford Credit on Monday. Lewis was chasing up 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 got the ball rolling. 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 SPV would 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 became the Car Dealership Financing Guarantee Appropriation Bill 2009.

When the SPV legislation reached the Senate in June, the Opposition referred to the Economics Legislation Committee for inquiry and report by 23 June. 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 that gave that preferential treatment Godwin Grech. According to The Punch, Lindwall “has links” to Grech.

Grech gave testimony to the Senate Enquiry on Friday. With his superior at his side, Grech was a rabbit in the headlights. When Greg Cohen from Ford Credit came to Canberra seeking funds from the yet-to-exist OzCar, Grech dealt with his claim. Liberal senator Eric Abetz established 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 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 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.”

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 dollars on fatcat car dealers that do not need our help while deferring spending on more deserving causes on the dubious grounds that “we must wait for Copenhagen”.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s