If HIH gets a Royal Commission what about this $4 billion loss

May 20, 2001 12:00AM

Mortgage broker campaigner Denise Brailey is a true Crikey hero and in her latest excellent column she is calling for a probe into the losses of up to $4 billion in a variety of dodgy mortgage schemes.  Scathing criticism as to why no prosecutions took place abound on each page - we have a full set of docs on this one! Considering ASIC was bestowed with more powers than Mario in 1998, why has the regulatory one, failed to revoke exemptions for solicitors, who were running amok with elderly investors hard earned pennies?

The Real Estate Consumer Association (“RECA”) - runs on a considerably less budget than ASIC - yet has managed to uncover $1.7 Billion of defaulting loans across Australia and at least $800 Million missing in action. In reality, the figure of defaulting loans is estimated to be approximately $4 billion at risk with over $2 billion of investors’ life-savings lost in the “system.”   The Treasury receive $360 million per year from an over-generous Corporate sector and in true Fagan-like attitude the Smirk retains $200 million per year for the Federal coffers - could be needed for travel rorts to hunt down the missing billions? Meanwhile ASIC is given the crumbs ($137 Million) to indulge in a touch of “monitoring.” The two wise Honourables: Peter Costello and Joe Hockey, have themselves indulged in quite a bit of monitoring during the past three years. ..........

The biggest question will be foremost on people’s thoughts: when were ASIC made aware, and did they report to IOSCO - the international regulatory body for security in banking, superannuation and insurance? Did they take immediate steps to prosecute and, if so, when? IOSCO is made up of 70 countries attempting to establish an effective “globalised” watchdog. Six countries, including Australia, pay for members to sit on the IOSCO Committee. Alan Cameron was the chosen one since 1993. I wonder if Cameron managed to explain our “special way of moving millions,” out of the pockets of the "poor" into those few elites who prefer to be known as “the haves” and who are decidedly lacking in community spirit? At least “two-up” had a set of ground rules.

Tax effective schemes are a national shame, probably far worse than the HIH debacle, which of course is also a national disgrace. What are these regulators supposed to be doing, if these scenarios keep happening? “And the statistics are frightening.

David Marshal has researched around 600 agriculture-based investments over the past five years and says: ‘Around $800 million was invested in these schemes last year alone and about 80% of that money is lost. About half of the schemes people invested in had no possibility of ever being viable.  There has to be investigations, from independent community-minded experts who demonstrate a willingness to ask the tough questions, such as: where have all the LOST hundreds of millions of dollars disappeared? Do we just relax and watch Australia lose millions and then billions of dollars, without asking the hard questions: where is the black hole? Who are the corporate bandits? .............

Is it the same affair exposed by the intrepid Chris Masters on Four Corners last week where thousands of Russian mums and dads have discovered their life savings have been raped pillaged and plundered from their own bank accounts, by the banks themselves? Where the money laundering of hundreds of billions of dollars flows out of Russia by stealth, via an offshore post office box outside a fibro shack in Nauru and ends up in a well-known Sydney bank?  Commonwealth of course.

According to Masters, the bank didn’t quite see the “irregularities,” until Aunty ABC asked a few pertinent questions whilst the regulatory authorities have allowed banks to become bloated without question. Similar to the Swiss minding the trillions of dollars and other booty for their friends and acquaintances - in times of turmoil? Perhaps the CBA bank in question might like to support matching Russian and Australian soup kitchens.


As Aussies, we are already immersed in rampant, out of control white collar crime, and we have the ATO and regulators on “P” plates, such as ASIC and APRA, who wait until fire chiefs Pete and Joe give the order to start a bucket brigade...........