Centrecorp not on Minister Scullion’s radar

p2254-Joyce-Scullion-GilesBy ERWIN CHLANDA

 

Two interest groups are asking questions about the assets, believed to be worth about $100m, owned or controlled by the Alice Springs based Aboriginal investment company, Centrecorp.

 

One group are Aboriginal owners who want to know what’s happening with their money. Dozens of them have over the years asked the Alice Springs News Online to investigate this.

 

The other group are taxpayers who are wondering when the Centrecop wealth will finally be used to ease the burden on the public purse of Indigenous affairs in this region.

 

Federal Minister for Indigenous Affairs Nigel Scullion could easily answer those questions because Centrecorp’s largest shareholder, the Central Land Council (CLC), is a Commonwealth statutory authority that is under his control.

 

But Senator Scullion, in the interview published here, makes it clear he is not going to do that. (Senator Scullion, centre, is pictured with Barnaby Joyce, left, and Adam Giles, at the NT launch of the Agricultural Competitiveness White Paper in Alice Springs last week.)

 

So the real estate and business empire will continue to be run, behind closed doors, by a handful of people in charge of a Pty Ltd company which has minimal disclosure obligations, unlike stock exchange listed companies do.

 

And tens of millions of taxpayers’ dollars a year are continuing to flow not only to the CLC, which has an annual budget of more than $30m, but also to the Central Australian Aboriginal Congress and Tangentyere, which each have two shares in Centrecorp. (It has a total of seven shareholders.)

 

Elsewhere Senator Scullion is not hesitant about the need for transparency of Indigenous organisations.

 

Yesterday he announced a forensic audit of the Anangu Pitjantjatjara Yankunytjatjara executive board, with the purpose of ensuring that it is “properly accountable – not just to government, but also to communities on the APY Lands”.

 

But of course, he’s unlikely to be suffering electoral fallout from that: He is not a Senator for South Australia, but for the Northern Territory where about a third of the population is Aboriginal.

 

In November 2008, a performance audit of Centrecorp Aboriginal Investment Corporation Pty Ltd was carried out by the Office of Evaluation and Audit (OEA). At that time a Labor government was in power federally.

 

The audit report detailed “total Australian Government benefits” to the Centrecorp group of $25m, including a $19.6m transfer of shares in Yeperenye Pty Ltd and $800,000 worth of shares in the Peter Kittle Motor Company.

 

This financial involvement is surely another reason for Senator Scullion to show more interest in Centrecorp than he is currently displaying.

 

The report found no flaws in the use of government funds for businesses in receipt of them, made no comment on the group’s other businesses, but urged much greater public transparency: “Whilst acknowledging that Centrecorp is a private company it has received substantial support from the Australian Government over the years because it was established for the benefit of Aboriginal people in Central Australia.

 

“For this reason it is important that it take steps to significantly improve the transparency of its operations.

 

“Centrecorp should consider how it can provide more public knowledge about its objectives and strategies for providing benefits to Aboriginal people in Central Australia.”

 

While its “charitable donations” between 2000 and 2008 amounted to just $900,000, in the wake of the report the Centrecorp Foundation in 2012 donated $916,000 and in 2013 (the latest year available), $750,000.

 

The most recent enquiry about Centrecorp by the News was made in March this year when the CLC denied to us that there had been a change of shareholding in Centrecorp.

 

We replied by emailing back an ASIC company extract we had obtained in April 2006, which showed the original shareholding configuration, namely CLC three, Congress and Tangentyere one each. It was still the same during the 2008 audit. Yet the Centrecorp website shows now that there are seven shares, with a three, two and two split as detailed above.

 

We asked to discuss the reasons for the change. The CLC media office replied that they were too busy, and this was not a high priority for them.

 

Nothing heard since.

 

Our coverage of Centrecorp goes back to at least 1998. Our reporting, later picked up by national media, sparked a Senate inquiry (also covered extensively by the News) which cast light on significant aspects of Centrecorp, but fell well short of presenting a complete picture.

 

In the absence of answers from the CLC, these seem to be the processes in play for Centrecorp investments other than those dealt with in the OEA report of 2008:-

 

Money being invested in or by Centrecorp comes – initially – from mining royalties and presumably, subsequently from re-investment of dividends.

 

Mining royalties payable to Aboriginal people were mandated in the Aboriginal Land Rights (Northern Territory) Act 1976.

 

The CLC insists that the Centrecorp investments are not royalty money, but private funds, presumably because once the royalties have been transferred via the CLC to royalty associations, these can then dispose of the funds as they please.

 

The CLC has never given any indication from where else that investment money could have come from.

p2242-1721-Granites-mine-2

The News has received reports from people attending royalty meetings at which Centrecorp staff had urged recipients to invest in ventures.

 

Two royalty associations in the Granites gold mine (at left) region north-west of Alice Springs are Kurra ($46.2m total equity) and GMAAAC ($25.5m accumulated funds).

 

No doubt the intention of the land rights act was to achieve Aboriginal self-sufficiency rather than for the deleterious effects of sit-down money and passive welfare to wreak their havoc forever. Should Centrecorp start playing a significant role in this now?

 

For example, there could be a far higher proportion of local Aboriginal staff in Centrecorp owned businesses, or those in which Centrecorp has a substantial share.

 

But to see what happens to people asking questions about Centrecorp one needs to look no further than the CLC’s immediate past president, Maurie Ryan (google this site).

 

Or go to the CLC’s official website, type Centrecorp into the search field, and this is what you get: “No Results for ‘Centrecorp’. Sorry about that.”

 

The News spoke with Senator Scullion last week.

 

NEWS: Do you know what assets Centrecorp owns or controls?

 

SCULLION: I don’t have access to the exact numbers. That’s a matter for a private organisation. Centrecorp makes its own decisions about its investments. There have been some Parliamentary inquiries into that matter but I haven’t had brought to my attention any particular concerns of late.

 

NEWS: The CLC, which answers to you, has the biggest shareholding. Do you not have an interest to be informed about that?

 

SCULLION: I certainly do. The Central Land Council is a Commonwealth statutory authority. Perhaps you could put the question in a way of identifying the mischief. What particular mischief are we looking for?

 

NEWS: No mischief. Centrecorp is believed to be in possession or control of assets worth around $100m so they should be making around $10m a year in profits.

 

SCULLION: 10% dividend is nice if you can get it. I acknowledge that if they own a substantial amount of property, if they have invested it properly, then it will be making a profit, yes.

 

NEWS: Is that profit taken into account when you allocate money to the CLC, Tangentyere and Congress? They are the other shareholders.

 

SCULLION: We do provide a funding stream through the Aboriginal Benefits Trust Account (ABTA) to the Central Land Council. No, I am not aware that other income is taken into account with that, although the CLC, in their annual report, which is a public document, provides the total amount. I don’t see any income being provided to the CLC from Centrecorp or other income streams. There are some small recurrent income streams from mining companies in terms of administration of particular deals that are done.

 

NEWS: Should the amounts from investments be taken into account when public funding is given to these organisations? After all, when royalty entitlements for Aborigines were legislated for, the purpose was for Aborigines to have an income that would, at least in part, offset the need for public funding.

 

SCULLION: What I understand to be the case is that a third of the ABTA funds are [paid to] the two land councils, to run their administrations. As I understand it there is no legislation to hypothecate profits from Centrecorp nor from any other investment arms. The Northern Land Council have other investment arms that happened about the same time as ATSIC. They were set up to look after assets that Aboriginal people had. I am not aware that there is any requirement for them to hypothecate profits from that private organisation back to the land council. And certainly, the year book from the land council doesn’t reflect that would be the case.

 

NEWS: Should it be, in your view? We have a lot of people asking us, what’s happening to the money from Centrecorp? Who owns it?

 

SCULLION: The shareholders, ultimately, of the CLC should be the membership of the land council. I am not sure where the profits from Centrecorp do go. They are a private organisation and that would be a matter for the people who are on that board. From my perspective, and my responsibilities, there is no requirement for these profits to go back to the land council. Its members have a stake in that profit’s disbursement. I have little knowledge of it nor of any dividends. I’m not sure if it goes back to the members or not.

 

NEWS: As the Minister responsible for the land councils, are you not able to enquire into any shareholdings the CLC has and what it does with any dividends? Have you asked them?

 

SCULLION: We have had a Parliamentary inquiry. No, I haven’t particularly asked them. I am not concerned about Centrecorp. I am concerned about the operations of the land councils and I have no issues with the land councils at the moment. Your statements appear to be correct. I am unaware how the membership of the land council receives dividends, whether they do or not. But I think the Parliamentary inquiry has already demonstrated that Centrecorp is outside of the purview of Parliament.

 

NEWS: Are you saying that the income stream the three shareholders may be getting from the investments would not affect the judgment of the government in allocating funding from the public purse?

 

SCULLION: The land council? No, it doesn’t. It is a separate organisation. Whether they have share in property, they might make money on a cattle property, that is also not taken into accounting in regard to the convention of funding for the land councils.

 

NEWS: And does that also apply to Congress and Tangentyere? In fact if these two got together they would out-vote the CLC four to three.

 

SCULLION: I am not aware of how the dividends would flow to any of the shareholders. I am unable to comment on that.

 

 

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12 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Julie
    Posted July 27, 2015 at 9:01 am

    If you go back over articles from when self governance for the Northern Territory came into play, this is where everything started to go downhill for Aboriginal people in the Central Desert Region.
    It began with Robert (Bob) Kennedy being in the Alice Springs council and having first hand knowledge of the upcoming Native Title agreements and the potential to develop Alice Springs through royalties (who funded the re-development of the mall? ARTICLE – Todd Mall: Are we finally getting it right?).
    When you look at mining agreements, the Aboriginal corporations get a small amount of the profits, being around 2.5% of the total profit of the mining company Newmont.
    Then break this down to corporations having to invest monies up to 50% of the 2.5%, this is worth millions over the last 20 years or so.
    This money is channelled through a Pty Ltd investment arm of the Aboriginal corporations and this money is put into Centrecorp (through the Central Australian Aboriginal Property Trust), by moving resolutions that have had prior discussions through the CLC and local business people (who have connections to the CLP, look at the businesses involved http://www.anao.gov.au/uploads/documents/Performance_Audit_of_Centrecorp_Aboriginal_Investment_Corporation_Pty_Ltd.pdf P16) and not involving the Aboriginal people (sounds like the old ATSIC way of things – under the table negotiations).
    This money has gone onto fund Peter Kittle, the Osborne Family Trust and others.
    I ask, when the Osborne Family sold Mitre 10 to become Bunnings, did any money borrowed go back to the Aboriginal Corporations?
    This is the transparency that the Aboriginal people want to see, the bank statements and other documents that show that Aboriginal moneys do come back to the most impoverished people in Australia.
    If you look at Foundation 51 and the payments (Electoral Commission; http://www.ntec.nt.gov.au/FinancialDisclosure/Documents/Disclosure%20-%20Annual%20Return%202010-2011%20%20Country%20Liberals.pdf), made to this organisation, the dots can be joined that all of this connected to the CLP Philosophy of: believe that the private enterprise system is the foundation for producing economic growth.
    But it only benefits the business people who have major conflicts of interest and personal relationships with the members of the CLP to get their business proposals through the Planning Dept of the NT Government.
    So why does Dave Tollner say that the government does not need an independent anti-corruption body? I wonder, perhaps all of these concerns may be uncovered and exposed?

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  2. Erwin Chlanda
    Posted July 18, 2015 at 10:21 am

    Sure, “Harold”: I rang Mayor Damien and asked him whether businesses linked to Centrecorp are paying council rates. He replied that they are, and that he is not aware of any rate exemptions for them.
    Erwin Chlanda, Editor.

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  3. Harold
    Posted July 18, 2015 at 9:22 am

    That’s interesting Erwin. The person who gave me that information would be someone who I would consider very reliable. Are you able to disclose how your question was framed and quote or summarise the Mayor’s response. Did the Mayor suggest that the organisations pay what a layman would consider to be “full rates”?

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  4. Bev
    Posted July 17, 2015 at 9:38 am

    Why is Scullion not answering questions? A few years back there were questions as to why Centrecorp was not paying tax. I don’t remember any proper answer being made about this either.
    Seems the Aboriginals get away with whatever they want. I wonder if any answer was ever given as to where the money that was given to Yirara College went – $43 million.
    If it is used legally and all legal requirements are followed then there should be no problem with the government departments answering questions that white people answer.
    I believe that certain white people in high positions try to cover up illegal activities by the Aboriginals because of the benefits they receive if they do.
    Those that expose them find themselves chucked out of town. Shareholders, if they get money from shares, should be paying tax on it, and it should be assessed as income by Centrelink.
    If they are getting it cash in hand to avoid tax and to get away with reporting it to Centrelink, they deserve to get caught.
    Maybe Warren Snowdon should be questioned. Also I remember the Aboriginal man in the white hat who came into the Lutheran charity shop when I was volunteering there.
    He told me he had no money – luckily someone who knew him was in the shop too and demanded he pay.
    Turned out that he had a thousand dollars in his pocket and it was not the first time he had said he had no money just so he could get something for free.
    He is not the only one doing this sort of thing. Many of them do.

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  5. Harold
    Posted July 15, 2015 at 3:05 pm

    Fair drain on the average ratepayer from what I understand.
    I have been led to believe that Centrecorp, Yeperenye etc get a full exemption from council rates.
    If this were to be true, it would be interesting as to whether it’s a requirement under an act of Parliament or whether just an ASTC policy.
    I would have thought that it be better left to higher government levels to provide support to these charitable organisations.
    Why should it be a burden on the average ratepayer?
    [ED – No, Harold, they are not rate exempt. I just checked with the Mayor. Erwin Chlanda, Editor.]

    View Comment
  6. Greg
    Posted July 14, 2015 at 11:51 am

    Conflict of Interest! How do people get away with this? Oh, it’s because the people who are responsible for “policing” it are mates and it all gets swept under the carpet.

    View Comment
  7. Sandy
    Posted July 13, 2015 at 8:40 pm

    Appalling responses from Scullion.
    He says he doesn’t know what is going on with Centrecorp and clearly he doesn’t want to know.
    How he has changed his tune, from change maker to running scared.
    Makes you wonder what has been going on behind the scenes.

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  8. Fred the Philistine
    Posted July 13, 2015 at 2:24 pm

    I would have to ask what sculduggery is going on? If I were helping the Aboriginal people, walking the streets with their ass out of their pants, I would not hesitate to tell people.
    I can say it, no wonder Tony Abbott cut Indigenous funding. What is there to hide? I can remember with the Hindmarsh Island bridge in SA the Aboriginals hid behind sacred womens’ business. It turned out to be garbage. If the Aboriginal land council, Aboriginal congress are there for their people, what’s to hide? The average Aborginal person does not know what these people do, other than getting rich at their expense.

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  9. The Barkly Magpie
    Posted July 13, 2015 at 11:37 am

    I am sure Nige has 51 good reasons not to answer any questions on this subject.

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  10. Anonymous
    Posted July 13, 2015 at 9:32 am

    Are these the guys who bought the Memo Club?
    It concerns me that Aboriginal corporations are able to make investments into ventures that contribute to social and family issues. Financial benefit to Aboriginal people should not be the only consideration if it is a tax / government funded corporation.

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  11. Dave
    Posted July 13, 2015 at 6:37 am

    The link to a government report is below, and just for the record Congress and Tangentyere whilst shareholders do Centrecorp do exist for the benefit of Aboriginal people.
    http://www.anao.gov.au/uploads/documents/Performance_Audit_of_Centrecorp_Aboriginal_Investment_Corporation_Pty_Ltd.pdf

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  12. Sean
    Posted July 12, 2015 at 8:34 pm

    Same as Giles, just does whatever he wants, when he wants.

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