The following article by the Sydney Morning Herald Online describes how quite a number of politicians end up directors of failed companies, and involved in dodgy deals. Is anyone surprised. Certainly not me. In politics, perceptions are everything. So it does not surprise me that a politician in the corporate world would reappraise property assets to boost earnings, to the extent that the whole earnings earnings was an asset re-write. I am reminded of the various state governments that used this accounting trick to take assets and liabilities off balance sheet by running JVs with private enterprise. Nor am I reminded of the unfavourable terms that politicians negotiated to build the various expressways around Sydney. The government also had to pay out a significant amount of money when a few of these road contracts were privatised. Oh, then their is the privatisation of power assets. Firstly we had Victoria selling off its power assets. The problem was that it included in those contracts a hidden tax by creating vested contracts for power supply, so that the government could collect higher tax revenues in future. No doubt their corporate advisers helped them originate that trick. But does anyone remember the problems the NSW utilities got into when they entered into derivative contracts for long term power sales. They lost a lot of money. Nope?
Well we have governments controlling 33% of the Australian economy (at least in terms of tax receipts). I just don't think they deserve our trust to spend this money. The historical record shows me that they are unethical, incompetent, unaccountable and deluded. Critics might argue that these are the exceptions, but they are not. Its too common, and we should not forget that these politicians are organised under and protected by their political parties.
The structure of politics is terribly wrong.
Andrew Sheldon www.sheldonthinks.com