Inside Australia’s Secret Rich List

by | Dec 26, 2020 | Business, Secret Rich List Featured

Have Australia’s wealthiest old families bought off the political process? Despite myriad attempts over the years to repeal the cosy “grandfathering” exemption, the billionaires are still permitted – like no other Australians – to keep their companies “dark”. Today Michael West Media unveils the first in a series of investigations by Luke Stacy and Stephanie Tran involving more than 5,000 corporate searches to find the people and the labyrinthine structures behind the Secret Rich List. Luke Stacey and Michael West report.

It’s quite the cosy little arrangement that some of Australia’s “old money” billionaires enjoy, courtesy of the federal government. It’s a cosy arrangement afforded to no other Australians, and a number of the country’s wealthiest individuals have fought tooth and nail to protect their privilege despite repeated attempts by parliament, the corporate regulator and Treasury to end it.

Billionaires such as Gina Rinehart, Anthony Pratt, Harry Triguboff, Frank Lowy, Kerry Stokes and dozens of other “old wealth” Australian families are exempted from having to produce audited financial accounts to the Australian Securities and Investments Commission (ASIC).

A total of 1,119 large proprietary companies are on this secret rich list; a result of “grandfathering” provisions of the corporations laws that were introduced by the government of Paul Keating 25 years ago.

Our investigation has found at least 37 directors on the grandfathered list who also appear on the Australian Financial Review’s  ‘Rich List’ of the top 200 wealthiest Australians for 2020.

Over the years, a number of politicians have tried to abolish this elitist “temporary measure” – the latest being an amendment by independent senator Rex Patrick to two separate Treasury bills – but to no avail. The billionaires lobby is nothing if not powerful.

Indeed, Rex Patrick, speaking to Michael West Media, made the point that after 25 years “the Government still cannot offer a policy reason for the exemption remaining in the statute books”.

“Each time an amendment to eliminate the exemption has been debated in the Senate, the Coalition has come up empty handed in explaining the policy rationale for retaining it.”

Permanent transition

The grandfathering exemption was put in place to give these wealthy proprietary companies time to adapt to a new financial reporting law introduced in 1995.

Introduced as a temporary plan by the Keating government, the list of exempt companies was to be reviewed after a few years but the Howard government stopped that move. The Rudd-Gillard government passed laws to limit the exemption, but the Coalition overturned them.

In August 1995, the Parliamentary Joint Committee on Corporations and Securities (PJSC) issued a report on the amendments to the 1995 Bill, which included the grandfathering exemption.

While the Committee supported the small/large company test (see Explainer) to replace the reporting entity test, it had reservations about the grandfathering clause, concluding that:

“Although the provision will ease the transition for some companies from the existing legislation to the new structure, [extending this assistance indefinitely] is not justified on any policy grounds.”

The parliamentary committee recommended, “the Bill be amended to include a sunset period of three years from the date of commencement of the legislation”.

The Keating government did not agree to a sunset period for the grandfathering clause but acknowledged the need to review the provisions. Paul Keating is yet to respond to questions from MWM regarding his creation of the grandfathering exemption and refusal to implement a sunset period.

In the wake of Rex Patrick’s 2020 amendment, which got up in the Senate on two separate occasions but was foiled by the Coalition in the House, Michael West Media began investigating the 1,119 “Dark Companies” on the grandfathered list.

More than 5,000 searches unveiled a string of reporting irregularities by the billionaires; further, there exists a strong connection between their Dark Companies and donations to the two major political parties, which raises the question: have Australia’s wealthiest families effectively bought off the political process?

Over the following weeks, we will roll out a series of investigations into Australia’s Dark Companies and the ultra-rich family business empires that lie behind them. Their latent power and influence cannot be underestimated.

Over the past 25 years, both sides of Parliament, the cross bench and the Greens, Treasury, the corporate regulator ASIC, and a joint parliamentary inquiry have all called for the grandfathering exemption to be abolished. But every time a repeal looks likely, suddenly enough votes are cobbled together to knock it on the head.

A question of fairness

In September 1995 in a Senate hearing, Liberals Senator Michael Baume argued there was a need “to restore fairness in terms of obligation to report”. When the Howard government was elected, it refused to review the grandfathering provision.

ASIC’s review, released to the Senate in June 1998, suggested that the 1995 changes “has created an unlevel playing field between different types of entities in terms of their financial reporting obligations”.

ASIC raised concerns that because grandfathered companies did not have to abide by the legislative requirements of the Accounting Standards, this had led to practices such as “not recording liabilities for employee entitlements and not depreciating non-current assets”.

The parliamentary committee again advised in a March 2001 report that the exemption should be removed.

In 2006, Treasury reviewed the exemption and suggested it be removed. Again, the proposal went nowhere. Furthermore, the media release on the review has been removed from Treasury’s website.

Almost 10 years later, in a submission to the 2015-16 Senate Economics Committee inquiry into Corporate Tax Avoidance, ASIC again recommended abolishing the exemption.

It argued that the “reporting exemption means that certain companies are not subject to the same level of public scrutiny as other similarly sized companies … The lack of availability of public financial reports reduces transparency about possible indicators of tax avoidance or tax minimisation.”

In October 2015 the government of Malcolm Turnbull passed legislation that continued the grandfathering exemption – this despite Turnbull attempting unsuccessfully to remove one of his private companies Turnbull & Partners Holdings Pty Limited from the secret rich list.

Turnbull said the exemption made “absolutely no difference to tax collections”. However, given that the tax payments of these Dark Companies are simply that – dark – we can only take the former prime minister at his word.

In a December 2015 Senate hearing, another amendment to the grandfathering exemption was put forward by Senator Ricky Muir of the Motoring Enthusiasts Party. In arguing against the exemption, the then assistant treasurer Josh Frydenberg claimed it was a “real concern” that wealthy business owners would be targeted for kidnapping if the public became aware how wealthy they were.

Kidnap amendment helps old money billionaires keep their secrets

During this hearing, the then finance minister Mathias Cormann said the government did not support grandfathering but reiterated the Liberal Party’s view that “the principle of not making these sorts of changes retrospectively is a very important principle that ought to be upheld”.

However, if a change cannot be made retrospectively, when exactly can a change be made?

When asked by Senator Jacquie Lambie how many directors of these Dark Companies were donors to the Liberal Party and the amount they donated, Cormann replied:

“What I would say to Senator Lambie is that truthfully, I do not know and I do not care. We determine public policy by what is in the public interest.”

In 2017 Greens senator Peter Whish-Wilson moved an amendment to repeal the reporting provision and again it was knocked back by the Coalition in the House.

And so, we return to Senator Rex Patrick, who has vowed to attach the amendment to every Treasury Bill that is introduced to the Parliament. It is currently attached to Treasury Laws Amendment (2020 Measures No. 4) Bill 2020.

Senator Patrick told Michael West Media that the secret rich list “creates an elite status for particular companies that is inconsistent with Australian values … [and] that the loophole provides for or encourages aggressive tax minimisation through a lack of transparency.”

Similarly, Labor MP Andrew Leigh has also objected to the secrecy given to these Dark Companies.

“This loophole was never intended to be permanent. It was a transitional measure. There’s no rhyme or reason for letting firms keep their affairs secret merely because they were formed before a particular date.”

It is well past time that the government ended this exemption from basic corporate law, which aids some of Australia’s wealthiest billionaires, as being directly in line with the public interest.


Luke Stacey

Luke Stacey

Luke Stacey is a contributing researcher and editor for the Secret Rich List and Revolving Doors series on Michael West Media. He has built our corporate database of grandfathered companies on the Secret Rich List. Luke studied journalism at University of Technology, Sydney, has worked in the film industry and studied screenwriting at the New York Film Academy in New York. You can follow Luke on Twitter @lukestacey_


  1. Avatar

    Awesome article, great to have a historical context to place against the ongoing failures of the Australian political process.
    Interesting to note that this impacts on both parties.
    The Greens and Independents are well placed to get this overturned. They’ve worked at keeping the issue alive.

  2. Avatar

    I am not surprised that the grandfathering clause was implemented by the neo-Liberal Keating, given his unhealthy associations with big business, like his predecessor Hawke.
    Labor doesn’t represent the working class, and hasn’t done since Chifley.

    • Avatar

      This association is mentioned in the Clinton Fernandes chapter in the new book about the influence of WikiLeaks on Australia. A Secret Australia by Ruby and Cronau. Much recommended. Hawke was a man who belonged to the US corporations.

      • Avatar

        “Duchessing” potential leaders and influencers has been a long established practice by governments and business by inviting them to be on worthy or influential boards or think tanks etc. I guess it is a cheap and easy way to influence directions of governments as their ego alone will take the bait! Bob Hawke, I believe from memory, was long ago invited to the US Ford Foundation and disgraced Governor General John Kerr was considered by the CIA to be “an asset.” They are but two of many. That is quite apart from the wealthy thus powerful Fossil Fuel lobby buying politicians and influencers.

  3. Avatar

    Thanks for a terrific piece of investigative journalism.

  4. Avatar

    For too long one rule for those with extreme wealth and another rule for the remainder. Look forward to more reporting on these Grandfather companies , and will wait with interest if any politician from the past will answer the Australian public why nothing has been done to change these laws for 25 years.

  5. Avatar

    Secrecy is essential for corruption

  6. Avatar

    Thanks for the great article – always appreciate being reminded of the hush money involved in politics

    i.e. Follow The Money to find out why decisions are made

    which continues until the mass of people learn about the selfish greed and corruption – and vote them out !

  7. Avatar

    Thanks for the great piece and ongoing work from MWM,
    How do we get the GG to intervene and dismiss this corrupt rabble? Surely there is more than enough evidence of potential corrupt and/or incompetence to warrant an intervention?

    • Avatar

      The GG is deeply embedded. He was chief of WarCrimes 2011 to 2014. Implicated in the cover up. Warned, did nothing. He’s in with the US companies.

      He must be boo’d with all opportunity.

  8. Avatar

    Surely this grandfathering can be overturned – there just has to be more public knowledge about the companies involved. The lame excuse of potential kidnapping is laughable. These companies should be paying taxes like every other company.

  9. Avatar

    They had no trouble in making the Foreign Relations Act retrospective so that they could ban Dan Andrews BaR agreement with China.

  10. Avatar

    Nothing will change without the voter’s calling for change. At each gathering of a politician th equestion should be directed to them about the change being temporary.

  11. Avatar

    It’s a Big Club – and you’re not in it. You’re not a member of the Big Club (George Carlin).

  12. Avatar

    No NO, “we are all in this together” not financially and not with this years Wuhan Virus and its atrocious state and federal handling No wonder people across the world are speaking out, or non compliant….

  13. Avatar

    BRILLIANT journalism that most Aussies will never read due to incredible media bias PROTECTED by the politicians here involved

  14. Avatar

    Great article, Luke. Looking forward to reading the followup stories. Especially informative to read the history of efforts by the Coalition to repeatedly protect their plutocratic patrons. Keating will no doubt remain silent as to why he did what he did.

  15. Avatar

    Fantastic article Luke Stacey, we knew these 1 per centers got special treatment but this suggests that ASIC reporting laws discriminated against all other AU companies and corporations. And to define ‘old money’ as somehow more worthy of special treatment than ‘new money’ one must therefore extend that same reporting exemption to all of our first nation people.

    • Avatar

      ‘Old money’ is where the assets are buried.

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