The Welfare Card exposes corruption disguised as philanthropy

This article by Michael Giffin and published by the Aim Network (27 February 2017), exposes the connection between the new Welfare Card and companies, associated with members of the Liberal and National Parties. In anyone’s language, this is improper and amounts to corrupt behavior. By failing to act on the matter, the Turnbull government, makes itself look like an accomplice. A question that begs to be answered is, how many more cases like this are there?

The Liberal National Party (‘LNP’) Welfare Card programme is really a LNP rort for the benefit of the Liberal and National Parties and their members, donors and supporters.

Indue Pty Ltd, the corporation awarded the contract to manage the Welfare Card programme and to operate its underlying systems, is a corporation owned by Liberal and National Party members and that donates to various Liberal and National Party branches around Australia. The former chairman of Indue is none other than former LNP MP Larry Anthony who is the son of former Liberal Country Party Deputy Prime Minister Doug Anthony. Anthony now holds his shares in Indue in his corporate family trust managed by Illalangi Pty Ltd. Other companies now owned by Larry Anthony, or by the corporate trustee of his family trust, Illalangi Pty Ltd, work under ‘sub’ contracts for Indue itself and make their profits from dealings with Indue in the course of Indue performing its contracts with the LNP Government. These corporations are SAS Consulting Group Pty Ltd – a political lobbying group that counts Indue as a client – and Unidap Solutions Pty Ltd – a digital IT services corporation that provides Indue, as well as the current LNP Government directly, with various IT services. Larry Anthony is also current president of the National Party of Australia, that is, the ‘N’ in ‘LNP’.

Setting up networks of corporations and trusts is standard practice for those wishing to conceal their involvement in an enterprise or operation and is often engaged to shield the identity of those involvement in that enterprise.

This is the real purpose of the LNP determination to adopt and expand the Welfare Card programme, that is, to obtain donations for the financially stressed LNP and to aid its supporters, donors and members. Donations to the Nationals have been waning over the last few years and the Liberals had significant amounts withheld from them by various Australian electoral commissions in 2016 due to their failure to properly report the political donations they received. The Liberals have shown a propensity to manipulate electoral donation laws as their recent dealings with the various electoral commissions in ‘the Arthur Sinodinos Affair’ and Joe Hockey’s ‘North Sydney Forum Affair’ indicate. Likewise, previous Liberal scandals involving the use of tax payers money to attract donations to the party and its candidates include Turnbull’s $10 million tax payer funded grant in the Rainmaker deal to a supporter who donated to Turnbull’s personal Wentworth Forum and John Howard’s and Julie Bishop’s involvement with the Austrade grant for donations deal in the Firepower affair. More recently we have seen the Liberals embroiled in electoral allowance scams which evinces a flagrant disregard for proper management of, and accountability for, public financial resources under their stewardship. Moreover, it is common knowledge that the Liberals also need to repay their current parliamentary leader, Prime Minister Malcolm Turnbull, the $1.8 million he loaned to them for the 2016 election campaign – not to mention other loan amounts he has advanced to them in the past. The Liberal Party is reported to be in debt to the tune of approximately $39 million.

Consider these facts.

1. The Welfare Card programme does not produce savings for the government but adds another level of administrative bureaucracy and cost on top of the current welfare payments system. In fact, the new look Welfare Card, which is a revamp of the former Basics Card, costs upwards of $4,000 person to implement and manage and the previous Basics Card cost $6000 per person. That is, for every person compelled to use the card the Government will also pay Indue, upward of $4,000 each. That’s $4,000 that could have been spent on that person directly or as a contribution toward the provision of services to communities with health, educational and employment needs or on reducing the alleged government debt. If every person receiving unemployment benefits were placed on the Welfare Card the cost to the tax payer of the administration of the card alone, not including the actual welfare payments made, would be approximately $3.2 billion more than the cost of the current welfare payment system. That money will be paid to Indue, or to any other private card provider or crony of the LNP Government that it wants to lavish with public funds, but not to those in need. That is $3.2 billion that could have been used to reduce the budget deficit or spent on health, education and work programmes for all Australians. If the recipients of other types of benefits, such as pensioners and family tax benefit recipients, are also compelled to participate in the card programme, then the cost to the taxpayer and Government coffers would be billions more again. Remember, these are additional administrative amounts on top of the welfare payments that need to be made to recipients and that these additional administrative amounts per person are paid to Indue as the manager and operator of the Welfare Card system and not as income support or on services to those who need it.
2. While incurring these additional costs, the card programme does not displace any existing welfare costs to the Government or taxpayers because Centrelink and Department of Human Services staff, who are responsible for welfare payments, were retrenched en mass years before the Welfare Card was introduced. Despite having this reduced staff, the Department still managed to maintain welfare services and payments without the need for intervention by a private operator such as Indue. On that basis, the card programme is more costly than the current system it is intended to supersede and replace as it requires the Government to pay high per person administration fees to the private operator Indue without displacing any existing costs sustained by the Government. Rather than reducing the alleged budgetary deficit, the card programme in itself worsens the budget deficit and creates no savings for the government at all. With this in mind, it is now clear that the true purpose of the $4.5 billion amount that the LNP Centrelink ‘Robo-Debt’ claw back campaign is targeted to recover from welfare recipients is the cost of implementing the Welfare Card across the whole country to recipients of welfare of all forms and not just to the unemployed. The cost of implementing the card nationwide is more or less proportional to the estimated savings generated by the ‘Robo-Debt’ claw back.  This clawback would enable the Department of Human Services to balance its departmental budget by offsetting the increased outgoing administrative costs of the Welfare Card paid to Indue with reductions in outgoing payments to welfare recipients. These administrative costs are funds from the Department of Human Services and welfare budget that were obtained from Government coffers for the purpose of providing income support to the people who need it and not for the purpose of passing those public funds on as profits and fees to private corporations and individuals with close connections to the LNP.
3. Under the LNP, Government contracts are now being awarded on a ‘limited tender basis’ at a frequency greater than they have ever been in history. This enables the LNP to award Government contracts to their crony mates on ‘commercial in confidence’ terms, and, thus, with an immunity from freedom of information laws, who then donate some of the profits earned from those Government contracts back to the LNP as tax deductible donations. The multinational KPMG is a major beneficiary of public funds under Government contracts, a major donor to the LNP and is also involved in the Welfare Card programme. The latest Government contract to Indue was with the Department of Human Service for $850,000 worth of ‘benefit cards’ for the whole of 2017. This is an amount of money that could produce cards for all unemployment benefit recipients with some left over. The latest contract between the Department of Human Services and Indue was awarded on a ‘limited tender basis’ sometime before 1 January 2017, that is, before the trials for the card had concluded and been assessed. In fact, it was awarded without any tendering at all.
4. The contract for the issuing and management of the card was awarded before the trials for the card programme’s operation were completed and before the merits and outcomes of the card programme were assessed. Hence, if the real objects and purposes of the welfare card programme were positive health and social outcomes as claimed, then the trials would necessarily need to have been completed and their health and social outcomes assessed before the recent contracts to Indue could be awarded. This is not what occurred. Rather, the contracts were awarded to Indue before the trials had even been completed, let alone before their outcomes were assessed. It is open to conclude from this that the Government contracts were going to be awarded to Indue regardless of whether the purported health and social outcomes and objectives of the card programme were achieved. This indicates that the positive health and social outcomes stated for the card programme are not, and could never have been, the actual purpose of the card programme nor the reasons why a Ministerial decision was made in late 2016 to award contracts to Indue for 2017.
5. There is no evidence that the health and social outcomes claimed for the welfare card have been achieved. Despite touting cherry picked colloquial ‘evidence’ about declines in poker machine use and alcohol sales in areas where the card programme has been tested, reports of increases in other serious crimes in those areas, where robberies, break ‘n enters and assaults have increased by up to 200%, have been ignored and gone unreported as desperate people seek cash or valuables, such as jewellery and electrical goods that can be traded for cash, to make necessary purchases.

In the light of the facts raised above, the question is then, ‘what is the real purpose of the Welfare Card programme?’ There can be little doubt that the answer to this is the provision of donations to the LNP and to benefit its members, donors and supporters.  Larry Anthony continues to benefit from the Government contracts with Indue even though he is no longer its chairman as he shares in the profits earned by it and other companies that he has interests in, SAS and UniDap, by way of their dealings with Indue.

In effect, LNP members and supporters are obtaining benefits from government funds that are intended for the welfare of Australian citizens. Public money is being transferred to private individuals and corporations with deep connections with the LNP in exchange for no apparent benefit to the public and in exchange for donations to the LNP. Given that the legal definition of corruption includes the conduct of a public official who uses his position to procure some benefit for himself or for another person, contrary to his duty and to the rights of others, and that may involve collusion, it is open to conclude that the LNP Welfare Card programme is little more than that. That is, corruption.

Unfortunately, with the very weak democracy we have in Australia, there is no way to hold those involved in this scam to account or to have any corruption independently investigated or prosecuted at a federal level. No federal ICAC or anti-corruption body exists. Only the Federal Police can investigate corruption as the criminal offence of defrauding the Commonwealth. Given that the Federal Police are controlled by the LNP Government and beholding to the LNP Government for their funding, and given the LNP and its cronies are the beneficiaries of the card programme, any such investigation by the Federal Police is unlikely to ever occur.

However, the Ministerial decision to award the contract to Indue is not excluded from review under the Administrative Decisions (Judicial Review) Act 1977 (Cth). It may be possible to challenge the award of the contract to Indue under that Act on grounds of ‘unreasonableness’ and, perhaps, ‘bias’. The decision was ‘unreasonable’ on the basis that the trials were not completed or their outcomes assessed before the contract was awarded to Indue. This means that the decision to award any contract to Indue at the time it was awarded had no factual basis or evidence to support the alleged purpose for the card programme or, hence, to provide any reason to award a contract. That is, no reason existed or relevant facts regarding the appropriateness of the card programme were known by the decision maker when awarding the contract to Indue. On that basis, the Minister’s decision to award the contracts to Indue was ‘unreasonable’ at the time the Minister made it and, on that basis, that decision should be reversed. The decision was ‘bias’ because no open tender was used to award the contracts and because Indue is a donor of the Liberal Party and its members are LNP members or supporters. Hence, when awarding the contracts for the issue, implementation and management of the welfare card programme, the Ministerial decision-maker preferred Indue to other possible suppliers due to the association of Indue with the LNP, that is, the political party in which the Minister for Human Services, Allan Tudge, who made the decision to award the contract to Indue, is also, necessarily, a member. As is Larry Anthony one of the beneficiaries of these contracts.

This is not a proper use of Commonwealth revenue and the Australian people would not support such conduct.

It is corruption disguised as philanthropy