And today (Saturday, May 12, 2004) the Venerable Crawford added his perspective in his Saturday Mercury column ... here's excerpts:
THE real issue in this fuss over the great poker machine rip-off is not how much Federal Hotels rakes in from the electronic bandits _ but the fact that the Tasmanian taxpayers did not get a razoo for the 15-year extension on the “licence to print money.”
Federal Hotels, as a business, was entitled to make as good a deal as it could to get the licence for a monopoly on providing and owning all Tasmania’s poker machines.
But the Government hardly exercised due diligence in secretly negotiating to give away a licence it should have sold for hundreds of millions of dollars.
The best estimate of what the Government could and should have got for the licence is between $130 - 300million _ that’s up to $300 million that could have gone towards under-staffed and over-crowded hospitals, depleted mental health services, run down schools, much-needed public housing and the like.
And nobody can dispute the figure, because the Government, on its own admission, didn’t even do the calculations and economic modeling necessary to come up with its own figure _ because it negotiated on the assumption that Federal Hotels would get the licence without having to compete with anyone. Federals _ the Tasmanian Labor Party’s second biggest donor and the Liberals' biggest _ is such a good corporate citizen and such a generous friend that it was given the licence as a gift.
In Victoria, meanwhile _ where the Bracks Government is taking a more hard-nosed approach _ it is expected a fee of around $3 billion will be paid in an auction of the licence for a similar monopoly on that State’s poker machines. Conceded, the Victorian operation is about ten times bigger than Tasmania’s, but all the same a licence to provide our poker machines should surely have been worth something.
Indeed, Liberal Opposition Leader Rene Hidding has described it as “a licence to print money … the most valuable licence ever issued in Tasmania” and has guestimated Federal Hotels’ take from gaming (including the pokies operation and casinos) over the 20-year life of its present licences would be of the order of $1 billion. He may or may not be near the mark, but nobody has disputed him.
And that’s the point. Because the Government did not properly do its homework in the lead-up to negotiations on the licence for poker machines, nobody _ apart presumably from Federal Hotels (and they’re not saying) _ has any idea what the licence is worth commercially, and therefore what would have been a fair price for the licence fee.
It’s really strange that Premier and Treasurer Paul Lennon made a point this week of drawing attention to the extraordinarily generous deal Federal Hotels got when it was given its poker machine monopoly (that is, a monopoly to own, supply and lease up to 3680 poker machines in Tasmanian pubs, clubs and casinos). He did so by making a fuss about the suggestion by the Greens gaming spokesman Kim Booth that a “possible outcome” could be a profit for the company over the 20-year life of the agreements, of $3.14 billion. The figure was way off the mark and resulted from a miscalculation by Booth, but it had been a one-day-wonder of a story and had been forgotten by this week _ until Lennon raised it again in high dudgeon, accusing Booth of deliberately making a false claim and deceptively misusing research by the Citigroup.
Federals had found it embarrassing that, while they were crying poor during sensitive negotiations with unions over pay claims, it was being suggested they were sitting on a pot of gold from the pokies. But the Lennon tactic has backfired. While he and Federal Hotels have stressed the point that $3.14 billion is a gross exaggeration, nobody has said what the real figure is. And it has drawn attention to a very well researched paper written by Hobart social policy consultant James Boyce which highlighted the Citigroup research in the first place.
Boyce’s paper _ which was published months ago on the www.tasmaniantimes.com political and social e-zine web site but received little other attention _ is a forensic examination of the Government’s failure to extract a single dollar from Federals for a licence which he estimates “could easily have fetched over $300 million” had there been an auction among such operators as Tattersalls, TabCorp and even Tasmania’s own publicly-owned ToteTasmania. Citigroup _ one of the world’s biggest financial services organisations _ did a “deliberately conservative estimate” of the value of the licence and concluded the Government could have demanded $130 million.
etc, etc
Crawford's conclusion: Tasmananian taxpayers seem to have lost out badly from the poker machine deal. But with neither the Labor nor Liberal Party likely to endorse any “sovereign risk” threat to Federals by supporting a change to the arrangement now that it is signed and sealed, we seem to be stuck with it for at least two decades.
Crikey again took up the refrain in its Sealed Section, late Saturday, quoting Crawford:
9. Tassie pokies - the scandal continues
Veteran Tassie commentator and award winning journo Wayne Crawford
hopped into the Labor/Federal Hotels pokie monopoly deal in his column
in today's Mercury. Crawford has reached just the same conclusion as our own Hillary Bray on the 20 year exclusive contract: it stinks.
How much should the monopoly deal have been worth? The Greens,
probably a bit excitedly, claimed Federal would reap $3.1 billion over 20 years.
The fact is that no-one, including Treasury or Federal Hotels seems to know. Citigroup, the world's biggest financial services organisations,
have calculated that the government, on a conservative estimate, could have demanded $130
million for the deal. Other estimates place the figure up to $300 million.
So how much money did the government extract from Federals? Zip.
Last week Hillary gave out
this web link
to an excellent article on the matter by social lobbyist James Boyce.
etc, etc
Crawford has an unimpeachable reputation in the Apple Isle for quality journalism.
If he says something's a dog, then that’s exactly what it is – and here’s how he wrapped his item:
"We taxpayers seem to have lost out badly on the poker machine deal
but with neither Labor nor the Liberals likely to endorse any sovereign
risk' threat to Federal by supporting a change to the arrangement now
it is signed and sealed, we seem to be stuck with it for at least 20 years."
Ah, sovereign risk. This is the excuse that the Liberals are hiding behind.
But is that the real reason? Hillary pointed out that there is only so
far leader Hidding can go in whacking the government before he starts
treading on Federal Hotel's toes and the toes of their media frontman Brendan Blomeley.
The same Brendan Blomeley who nearly became a Liberal candidate at the last state election.
But maybe Hidding is wasting his time trying to stay close to Blomeley.
Maybe Blomeley is lost to the Liberals already.
Mercury political columnist, Ellen Whinnett, spotted Blomeley out to dinner
during the week with Premier Paul Lennon, senior cabinet members and various
Labor spin doctors.
etc, etc
Of course Premier Lennon and the Labor Government can click its collective finger (hope that's not the middle one) to summon up its immense army of spinners to coat the dice in sugar ...
... As Crawford wrote last week ...
THE extent of the State Government’s spin-doctoring operations was illustrated clearly this week by the string of failures to meet expectations.
With the Government now employing something like 60 people in propaganda units the amount of unsolicited publicity churned out has reached record proportions.
And this week a series of unfulfilled expectations backfired and brought the Government to grief. With the Government being virtually run by publicists and minders since the size of the elected Parliament was slashed six years ago, the tendency is for announcements to be so managed that everything is proclaimed in a state of breathless anticipation.
And the danger for the Government _ as was demonstrated time and again over the past week or two _ is that these expectations become unrealistic.
The most dramatic example has been the Spirit of Tasmania III and its failure to meet anything like the forecast passenger levels. It’s not that the new Sydney-Devonport ferry has been a failure, but that entirely unsupportable and exaggerated expectations were generated by the Government in its eagerness to generate excitement about its plans.
Obviously, the $105 million ferry is a very valuable addition to Tasmania’s tourist transport services and over the years will no doubt build up to a well-patronised and very popular service. The disappointment is that it has not met anywhere near the over-blown forecasts the Government had made when it said at the outset the ferry would enable Tasmania to “pierce the heart of Australia’s most lucrative and fastest growing tourist market” (Sydney) and that “thousands of Sydney-siders and people from wider NSW” were eagerly awaiting the start of the service.
The forecast was that 115,000 passengers would travel on the Spirit in the first year _ but in fact, with the ship having been on the service for the best part of five months, only about 25,000 have traveled, at times with as few as 57 cars and less than 175 people aboard the 850 car/1400 passenger ship. Even the 48,000 passenger reservations made since the booking office opened - many of them for well in advance - are well down on expectations.
etc, etc
Then there is 10 Days on the Island. Certainly, the Government was able to boast of it being an outstanding success. As the Premier “warmly welcomed 500 artists from 17 islands to share their culture in a packed programme of 250 events (attracting) more than 100,000 people,” he said the festival would inject $1.5 million into the Tasmanian economy.
But none of the announcements mentioned that the arts event would need a $2 million Government subsidy to survive. Even for those who consider it money well spent it came as a shock _ again, a case of unreal expectations being generated by the Government, which told only part of the story at the outset.
Then, on the reticulated gas roll-out the Government has missed its target. Despite a four-month extension, less than a third of the potential flow has been achieved _ which is well below and well behind the expectations the Government had for the project. Again, it will be a boon to industry and a great boost and addition to the State economy, but the rhetoric has been more impressive than the reality.
Same goes for Tasmania Business Online, launched with fanfare by former premier Jim Bacon four years ago as the “backbone of our vision to make Tasmania the intelligent island.” Now it transpires the project has failed. And the Intelligent Island programme _ which was sold to the electorate as the doorway to Tasmania’s exciting new future in information technology _ has also been in trouble. Again, unrealised hopes.
My theory is that all these exaggerated forecasts have come with the era of government being run by minders and press secretaries. Not only are they more worried about day-to-day pressures to get their ministers’ names on front pages and the television screens, than they are with whether the breathless prose of their press statements might generate oversanguine anticipation.
The very culture of government has been changed by the fact that journalists have been infiltrated into government, ranging from the most senior roles of head of the Premier’s Department and the Premier’s Chief of Staff (both are former senior journalists), to the minders who churn out press statements and speeches for their ministers.
Despite the cut in the size of the House of Assembly from 35 to 25 members, and the Legislative Council from 19 to 15, there has been no cost saving. Indeed the Liberals _ who initiated the moves to reduce the size of Parliament (although the running was taken over by Labor) seem to be having second thoughts, with Opposition Leader Rene Hidding claiming recently a $5 million blow-out in the cost of Parliament in the past six years demonstrated the electorate did not get what they expected from the reduction in parliamentary numbers.
While the number of elected representatives was slashed by 25%, there has been an exponential growth in minders and spin doctors _ as was made clear this week when Health Minister David Llewellyn turned up to a Budget scrutiny committee hearing with 34 bureaucrats in tow.
etc, etc ...
The Opposition _ which has long complained of “Labor spin” _ did a “Google” computer search of ministerial staffing lists and the Government directory and calculated the Government’s propaganda units now total over 60 people. The Government directory reveals that departments alone _ not counting the semi-independent authorities _ have no less than 10 media, communications, public relations, marketing and PR units employing more than 50 “hidden spin doctors,” as the Opposition calls them.
This is on top of the Communications Unit of about a dozen journalists and support staff who look after ministers’ publicity needs. All up the Opposition calculated the hidden cost of spin at around $1 million on top of the $700,000 for the Communications Unit.
Wayne Crawford's email is: waynecrawford@msn.com.au
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Saturday, May 12, 2004