Newsletter – June 2 2017

Newsletter – June 2 2017

Ross Greenwood: “Alright, you’re talking tax again…what happened?

Paul Hogan: “uhh, god yeah…. The two boofheads, the two absolute boofheads, talking to each other about stuff they don’t know, subtly suggesting that I’ve paid my way out of the criminal situation…I mean they couldn’t have made it any more subtle, could they?”

The Week That Was…

This week has been one of a kind, I must say.

And it all came unravelled on Tuesday thanks to a Senate Estimates hearing.

This story starts with the largest attempted fraud on the Australian Tax Office.

The story now inexplicably includes Paul Hogan – Crocodile Dundee – former Australian of the Year, who was pursued by the Australian Tax Office (ATO) for more than six years for $150 million in taxes it alleged he owed. That case was settled five years ago.

It might end – depending on who’s right and who’s wrong – with the job of the most senior tax official in the land, ATO Commissioner Chris Jordan.

Here’s the background. Two weeks ago, a company called Plutus Payroll and its directors and employees were raided by the Australian Federal Police as part of Operation Elbrus.

Plutus was created by a self-described fin-tech expert named Simon Anquetil. He was arrested and charged over the $165 million fraud. Among others charged was Adam Cranston, alleged to be one of the ring-leaders.

The alleged fraud was pretty basic. The company offered pay-roll services to contractors. It was supposed to pay wages, tax and super on their behalf. But the allegation is Plutus directors skimmed the tax they were supposed to have paid on behalf of others.

Those matters will eventually be heard in court.

The bomb-shell among the arrests and charges was that of Adam Cranston’s father, Michael Cranston. Michael Cranston is a deputy commissioner of the ATO and the most senior tax investigator in Australia. His pending charges – which result from allegations he made inquiries inside the ATO to discover his son’s situation – have also engulfed two other senior tax officials.

There is no secret this sent shock-waves through the tax office.

At the time of those arrests, I interviewed a number of people. One of those was Andrew Robinson from Robinson Legal – Paul Hogan’s lawyer. The reason is that Michael Cranston was the lead investigator for Operation Wickenby, which pursued Hogan for six years.

In that interview, Mr Robinson said Hogan was completely exonerated. But he also noted the terms of the settlement are the subject of strict confidentiality agreements.

On Tuesday, for the first time since the Plutus Payroll raids and arrests occurred, Mr Jordan appeared in public. He fronted a Senate Estimates Committee and was grilled about the processes of the tax office and the specifics of Operation Elbrus (which inside the tax office was called Operation Crocodile).

Mr Jordan’s appearance was assured and measured, as you would expect of a professional of his standing. He said there was co-operation with the Australian Federal Police as the investigation unfolded; that no tax office files had been breached; that people could have confidence in the tax office and its administration.

He said Mr Cranston had committed a huge error of judgement.

But then Mr Jordan was asked a question by the National Senator John “Wacka” Williams.

Wacka is one of the best politicians in the house. He’s tough, and can spot a story in a heart-beat. He spotted one this time.

Wacka started by asking if he knew of the interview between me and Hogan’s lawyer on my radio program Money News. Mr Jordan said he did, but that he disputed Mr Robinson’s version of events that Hogan was exonerated from the investigation.

Tens of millions of dollars

As Wacka pressed further, Mr Jordan – who had the benefit of parliamentary privilege – inferred that Hogan paid tens of millions of dollars to have criminal charges relating to possible tax evasion charges dropped.

Though he spoke in generalities, his responses were interspersed with comments about Hogan. It was sometimes hard to separate them. Mr Jordan spoke about some people who pay tens of millions of dollars to make sure tax matters are settled. That charges are not pressed.

Senator John Williams:  And the settlement, did Hogan make payments the ATO? Yes or no.

Chris Jordan: Look I mean…

John Williams:  I think it’s in the public interest, being the tax collector you are…

Chris Jordan: I don’t want, I don’t want, look, you know, go …because all of say is, is, in the general comment…

If people aren’t taken to court and charged, doesn’t mean substantial amounts of money weren’t paid to settle issues…

But those comments made Hogan white with anger. The tax office, you suspect, might not have known he was in Australia.

He came out swinging on my radio program, describing Mr Jordan as a “boofhead” and saying that he did not pay tens of millions of dollars to have tax evasion charges disappear – along with his tax liabilities.

Paul Hogan: “The two boofheads, the two absolute boofheads, talking to each other about stuff they don’t know, subtly suggesting that I’ve paid my way out of the criminal situation…I mean they couldn’t have made it any more subtle, could they?

“The boofhead from the tax department said, ‘You know, we could go after people’ – inferring me I guess – ‘criminally, but that could take four or five years, so, if we’ve got the money, we rightly let it go.’

“Excuse me? They looked up my quoit for five years. They involved the IRS, the Australian Tax Office, the Chancellor of the Exchequer or whatever they call it in England, and they found nothing. They found that I had done nothing. So I didn’t pay them off, and I certainly didn’t pay them tens of millions so they would just let me go without sending me to jail.

“I would have been quite happy to go to court, to show the incompetence of the whole investigation, which has smeared me around the world. And now they’ve brought it up again, so I should have sued them in the first place.”

In other words – to some degree or another – somebody is not telling the full story.

The problem here is that Hogan’s settlement with the tax office is the subject of a strict confidentiality agreement. Nobody can go into too much detail without breaching that agreement.

So, a few things could happen from here. The Senate Economics Committee could seek to have Hogan’s settlement with the tax office tabled, under parliamentary privilege. I think that is most likely what will happen. I suspect Mr Robinson and Hogan would go one step further, and be willing to allow the documents to be released publicly.

Where that leaves the ATO Commissioner, remains to be seen. Was he right? Was Hogan right?

In Hoges’ own terms, he will be looking for revenge…

Paul Hogan: “I’m not a whingeing loser, I’m just going to extract revenge. Because this is not right. The whole business about confidentiality – I kept confidentiality, because that’s the pledge they make. You obviously can’t take their word for anything.”

Reputation… and high profile jobs are almost certainly on the line.

But this was certainly not all that happened this week.

Treasurer Scott Morrison is cracking down on bank executives.

What he’s doing is, basically, trying to stop the practices by which banks, or their executives, do the wrong thing by the consumers and then, ultimately, don’t pay any penalty whatsoever.

So the regime that he’s putting in place, along with this bank levy that the banks don’t want, is to put some personal accountability back into the hands of the bankers.

In other words, if they behave incorrectly, they can be deregistered; they can actually be banned from acting as directors, or in fact, officials of banks.

And there’s some merit to this because, in all of the Senate Enquires and the hearings we’ve had, they keep on being asked:

How many people have been sacked as a result of the misdeeds of the banks?

And the answer is, well actually, none.

And yet, the problem has been in the case of say Storm Financial and some of the financial planning scandals that hit the Commonwealth Bank – some of those people, who were involved in those, simply went to other banks and did the same thing.

And so the community was put at danger by the fact that the banks had not taken any action, whatsoever, against those people who had perpetrated these issues.

Now, it could go as far as even misdeeds for drugs and alcohol.

Now, this is a pretty big call in our society these days to do this, but there is no doubt that the Treasurer is quite keen to try and clamp down, on really what does seem to be anti-social behaviour inside of banks.

And there was a lot more this week – media reforms, house prices falling for the first time in 18 months…like I said, a very busy week.

One thing I will leave you with, however, is the New South Wales government making the announcement yesterday that they will remove stamp duty for First Home Buyers for properties up to $650,000 as well as doubling the tax on foreign investors.

Housing Affordability

In a housing affordability attempt by Premier Gladys Berejiklian, the new measures will give first home buyers a competitive edge when bidding against investors.

The measures, which come into effect on July 1, include:

  • Abolishing stamp duty for first home buyers on existing and new homes up to $650,000 and introducing stamp duty discounts for properties worth up to $800,000
  • Scrapping stamp duty charged on lenders mortgage insurance when it is required for first home buyers with limited deposits
  • Doubling the foreign investor surcharge from 4 to 8 per cent on stamp duty — overseas buyers will also pay a 2 per cent surcharge on land tax.
  • Local investors purchasing off-the-plan properties will no longer be able to access stamp duty concessions.

She said the measures were estimated to cost the State Government about $1.2 billion, but the increased surcharge on foreign investors would help pay for it.

These changes were welcome news to first home buyers and whilst a lot of the finer details need to be answered, NSW treasurer Dominic Perrottet and the Premier herself did their best to explain it themselves on my radio program.

And whilst this does not mean millennials can go ahead and have $19 smashed avocado and a $4 coffee every day, it will certainly be a bit easier for them.

But this comes at the behest of foreign investors. And one thing we all have to realise, we need those investors to keep our economy growing.

We do not want to scare those investors off, and whilst the tax increase is not much, it is still a tax increase.

How this will play out, it will be interesting to watch.

For all this and more, check out

9News –

Australian legend Paul Hogan is dragged back into the spotlight where a Senate Estimates hearing into the ATO Tax Fraud alleged that the actor paid tens of millions of dollars. Both Hogan and his lawyer deny this. Will the confidentiality agreement be tabled to find out the true answer?

Money News –

Australian acting legend, the “Crocodile Dundee” Paul Hogan plans to “extract revenge” following the ATO Commissioner Chris Jordan implies that he paid tens of millions in a tax settlement. Hogan not only calls the commissioner a ‘boofhead’; but explains his version of events

Work. Life. Money. –

He’s 86 years old. He’s a grandfather. He’s a father. He’s an Indigenous Elder. He’s a story teller. He’s an artist. He has also just graduated from university with a Bachelor’s Degree in Visual Arts. Listen to the incredible life of Dennis Seymour

9News: Paul Hogan and ATO stand off

Previous: Money Minute – June 2 2017 Housing Wobbles
Next: Money Minute – June 5 2017 Market Reaction

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

1154 More posts in News category
Recommended for you
9News: Power Share

Deborah Knight: The costly problem of extending the electricity network for new housing developments could...