Author: Michael West

‘Special purpose’ approach by accountants hides corporate secrets

The accounting profession has failed. It is a failure that comes at a cost to every man, woman and child in this country. No fewer than 20 multinational companies (see the list below) operating in Australia have mysteriously stopped providing full financial statements during the past few years; household names such as BMW, Avon, adidas, News Corporation. There has been no explanation. KPMG, Deloitte, PwC and Ernst & Young, the elite firms that audit these multinationals, proffer no explanation. The effect, however, of opting to report “special purpose” rather than “general purpose” financial reports is basic; it entails less disclosure. In turn, less...

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With coal going begging, it’s time to stop digging

Instead of splashing billions of dollars building their coal mines from scratch, instead of enticing governments with fees and the illusion of jobs, instead of battling bitter local communities and tearing up farmland, you have to wonder whether Shenhua and Adani have thought of simply buying one on the cheap – a coal mine that is. The notion must have dawned on them. It’s not exactly a sellers’ market. Vale, Anglo, Rio, BHP, Glencore, the Japanese – take your pick. All are sellers at a price, particularly Peabody, which reported this week a $US1 billion ($1.37 billion) loss for...

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Chevron parents leave ATO an orphan

Secretive oil major Chevron Corp has taken the art of tax avoidance to its ultimate form thanks to a scheme so aggressive that it goes beyond merely reducing exposure to income tax, but rather, has been designed to make a profit from the Australian Tax Office. These are the findings of a report, commissioned by unions in the United States and obtained by Fairfax Media, that describes Chevron’s Australian arrangements as “a sham”. Premier Colin Barnett (left) and Chevron manager Colin Beckett at its LNG project on Barrow Island.  By exploiting loopholes to claim tax relief on “artificially created interest payments”, Chevron has “actually profited from the act of borrowing money at the expense of Australian taxpayers. It goes beyond any commercial objective of providing debt finance leverage to the point where the value of its tax benefits from interest deductions exceeds the actual before-tax cost of the loan”. Chevron Australia declined to respond to detailed questions about the scheme. The report into its tax affairs is yet to be made public. The ATO is already locked in a landmark lawsuit against Chevron in the Federal Court where it is seeking to retrieve $322 million with penalties. The case alleges  Chevron spun out a complex corporate structure for the explicit purpose of avoiding $258 million in Australian taxes between 2004 and 2008. It created a US subsidiary of its Australian company...

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William Hill having a bob each way

If you were running a book for the Golden Hypocrites Bookies Stakes you would have to price William Hill at onerously short odds. Punter Richard Irvine got a letter from Australia’s largest online bookmaker asking him to complete a statutory declaration with 18 questions. Among other penetrating requests, these included a demand for “certified copies of your last three tax returns and mark those certified copies with the letter ‘C’.” And, “include certified copies of documents evidencing your income (eg your last three employee pay slips) and mark those certified copies with the letter ‘E’.” Irvine is one of those punters the bookies don’t care for … one who tends to win too much. William Hill has overpaid for its Australian acquisitions and is naturally keen to win back its losses.  “William Hill feels that no punter should actually be able to win off them,” says Irvine. “When Racing NSW forced them to give punters a chance to win, they placed this impost on all punters they had marked as winners – knowing that no punter would be able to source all this info let alone be willing to provide it.” These stringent “legal” requirements came replete with a threat of “imprisonment” should Irvine make any false statement. The bookie is not quite so pernickety however when it comes to its own statutory declarations. Take its financial statements for the year...

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Wise investment or fossil fools? Queensland backs coal as G20 moves the game on

The very day after the G20 concluded, with its recommendations about ending government subsidies to fossil fuels, it appears the Queensland government is poised to ramp up its subsidies for the humungous Galilee Basin coal project. The final communique of the G20 says: “We reaffirm our commitment to rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful consumption, recognising the need to support the poor.” Today however we have Queensland Premier Campbell Newman saying: “We’ll be saying, if necessary, we’ll be prepared to invest in infrastructure, core infrastructure, common-use infrastructure. We’ll be making the case that we...

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New Michael West Podcast

Created by PodcastOne, this 3 part series looks into how Australia has gone from one of the cheapest countries in the world for energy to one of the most expensive, and reveals just what has happened with our gas and electricity supply and why we are on the verge of an energy crisis.

Listen to THE ENERGY TRUTH on the PodcastOne website

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