By Liam Mitchell
ADELAIDE — Yet another report on the collapse of the State Bank has come and gone — again with neither concrete proposals for action nor suggestions on how to avoid future disasters.
The auditor general's report, released about a month ago, merely said that there were some questionable dealings involving the board members of the Beneficial Finance Corporation, a subsidiary of the bank.
The latest report brings the current cost of inquiries into the dealings of the bank to approximately $35 million. It follows on the heels of the royal commission's report into the collapse. The royal commission is still to make its final report on whether prosecutions should proceed, which is expected in September.
The auditor general found that Beneficial Finance contributed $1 billion of the $3.15 billion loss by the State Bank. Much of this was through funding speculation and property investments.
The report also details abuses such as a luxury apartment on the Gold Coast, furnished at a cost of $120,000, for the use of its directors when on business. This apartment was also used by the board for recreational purposes. The appointment and upkeep of a luxury yacht for the same purpose in WA came to $850,000.
Financial and property speculation were said to have been ill directed and not checked out thoroughly, with the report describing it as "gambling" with public money.
However, as if $35 million is not enough to say that there is a problem, the state government has announced another two inquiries, at a cost of a further $3 million, to gauge whether criminal or civil proceedings should be undertaken to prosecute someone (anyone!) for the disaster or to recover some of the money.
$38 million later, and the government might finally have a scapegoat it can run with into the state election, which is due by March 1994!
However, there are a number of issues that have not been taken up in the whole series of inquiries and claims and counter-claims.
While John Bannon accepted political responsibility for the disaster and resigned as premier — to the back bench, where he still draws a handsome salary — the question of accountability has not really been brought up.
During the 1980s, the State Bank, along with numerous other institutions, lent substantial amounts for speculative purposes. When the speculative market came crashing down, losing the money invested, the banks and their guarantors — in the case of the State Bank, the government — were left holding the bag.
For the Bannon government, this meant successive bail-
outs of the State Bank of $3.15 billion, as well as political dealings between the two to hold down interest rates prior to an election.
Bannon has now paid for his irresponsibility in dealing with public money (at least in terms of public face). There may even be a few of the top bureaucrats from the State Bank and Beneficial Finance prosecuted as scapegoats. However, this is only the tip of the accountability iceberg.
The Arnold government is seeking to distance itself from the problems with the bank. With an election around the corner, it must do its best to scapegoat a number of individuals to keep the attention away from the system that allows public money to fund investment projects for private companies.
The Liberals too are seeking to keep the issue of gambling on the stock and property markets off the agenda and are calling for the head of the Labor government.
Meanwhile government charges are increasing to pay for the massive budget deficit created by the bail-outs of the bank. Electricity charges for households are to go
up, while business actually gets a cut in its rates, and government charges and fees are increasing.
Add to this the imminent loss of another 600 jobs from the public service, on top of the 3000 jobs already cut since the crisis began, and a picture emerges of the government using taxpayers' money to pay for the bank's losses.
The issue of who pays for the bank's collapse has not been mentioned in the media or the inquiry reports. Who was it who benefited from the speculative boom that gave way to the crisis? Who made money from the bank's wheeling and dealings?
It is this section of the community — big business — that should be paying for the crisis, not ordinary working people who made no profit from the bank's speculation.