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Monday, 10 October 1994
Page: 1308


Senator MICHAEL BAUME (3.06 p.m.) —I move:

  That the Senate take note of the answer given by the Leader of the Government in the Senate (Senator Gareth Evans), to a question without notice asked by Senator Michael Baume this day, relating to the purchase of real estate by the Prime Minister.

In response to my question, Senator Evans chose not to ask Mr Keating to explain how he could afford to buy a Woollahra mansion for $2.2 million, which is more than the total take-home pay the Prime Minister has earned during his 25 years as a parliamentarian.

  There is no doubt that this chamber—in fact, the people of Australia—would like to know how Mr Keating has been able to avoid the effects of the `recession we had to have', that is, his recession, in which tens of thousands of ordinary Australians have lost their homes and businesses, particularly those in rural Australia, who note the extraordinary difference between the treatment of Mr Keating's piggery group where $4 1/2 million was provided for as a bad debt by the Commonwealth Bank, while at the same time the Commonwealth Bank appeared to be enthusiastically putting other primary producers off their farms.

  There is no doubt that the Prime Minister, as he promised in the 1989 budget, has brought home the bacon. He has brought home the bacon to himself and left the rest of the carcass very badly used for the rest of Australia. Continuing the analogy of bringing home the bacon, in order to get this sort of money he seems to have had some kind of snout in the trough. No doubt there will be enough room for many people at his Thai teak table. No doubt there will be plenty of room for French clocks and Gould prints in the Keating mansion. That is, of course, if he can magically find the money to borrow or acquire all these items, just as he managed to acquire his mansion.

  We hear from Senator Gareth Evans today that all this is simply a commercial venture—that he bought it in order to lease it out at a very high rent. We know already that this was a mate's price when he bought it because the former owner said, `Really, it is worth a lot more than $2.2 million,' and that this was just a mate's price to the Prime Minister. Quite frankly, no Prime Minister should put himself in a position where he gets a special price for something, because that implies clearly some benefit to the Prime Minister—he is under some obligation.

  If he managed to buy this mansion for a mate's price, we wonder what kind of a mate's lease will happen now. Will there be a mate's lease whereby someone pays some specially high leasing price, just as the Prime Minister paid a specially low purchase price? The Prime Minister should not be in a position where he would be under any such obligation, although I suppose that quite a few people would like to provide the Prime Minister with a benefit by paying him a handsome rent on his mansion because there are many matters where, in fact, people do stand to gain from governmental decisions.

  It may well be, of course, that this special mate's rent is high enough for the Prime Minister even to avoid the need for negative gearing, because one gets negative gearing, which would quite properly and legally reduce one's tax liability, only where one's rent is lower than one's interest payments. It might be appropriate in these particular and extraordinary circumstances for the Prime Minister, when he does make such a lease, to advise the parliament of it and of the terms of it so there can be no suggestion of any kind of impropriety, any kind of mate's rate.

  When one thinks of the times when the Prime Minister has criticised others—particularly those on this side—for having made quite proper arrangements with housing in order to minimise their tax liabilities by negative gearing, one finds it interesting to see whether this Prime Minister will admit, if it is the case, that he has negatively geared in, as I have said, a legally proper way to minimise his tax. He held himself up to be a puritan on the issue of tax when he attacked our former leader on this very issue. He said, `You can see that the tax I paid is totally correct and proper because it has been audited.' That was, in fact, false; it was his company that had been audited.

  I conclude by saying that I wonder whether the Prime Minister remembers telling a Sydney journalist, Jonathon Chancellor, `All you write about is fascist types upgrading their property or flash eastern suburbs types driving around in their second-hand Mercedes dragging their mortgages behind them.' Now that Mr Keating is adding a big mortgage to his longstanding second-hand Mercedes—that is the one photographed in Warren Anderson's driveway—by upgrading his property to a $2.2 million mansion, under which category should the Prime Minister be listed—a fascist property upgrader or a flash eastern suburbs type?