Senator MURPHY (12:56 PM) —Today I rise to speak about a matter I have raised in the Senate before. It relates to an issue in my state—the former Trust Bank. The Senate would be aware, as a result of my raising some of the matters before, that an inquiry was conducted by the Tasmanian parliament's Standing Committee of Public Accounts, which delivered a report to the Tasmanian parliament on the sale of the Trust Bank.

There are just a couple of matters in respect to that report that I wish to raise today. One relates to a part of the report that actually refers to me. The report says that I did not seek to appear before the committee. On 3 May I wrote to the public accounts committee, asking them to advise me of their timetable so that I could seek to make a submission. I had already spoken to the chairman, Mr Tony Fletcher. He asked me whether or not I would appear before the committee. I said I would. I wrote to the committee and the committee replied, saying that they would advise me of a time for me to appear. As time went by, I did not hear anything from them. I got my office to chase them up, but I still could not get a time to appear before the committee. I had, of course, written to every Tasmanian parliamentarian raising all the issues that I felt ought to be investigated by the public accounts committee. One issue in particular was that in the last year of operation this bank, Australia's smallest bank, had unexplained expenditure of some $70 million—that is, outside of its wages and salary costs, outside of its rental costs and outside of all of its other costs it spent $70 million. The chairman wrote me a letter and said that—somehow—that was for pencils and paper and telephone calls. They could not really explain why because it might have a detrimental effect on the profitability of the bank. I do not know how.

Coming back to this issue with regard to my appearing before the committee, the public accounts committee wrote to me at the end of June and said they would like me to particularise my concerns for them to consider and then they would advise me whether or not I could appear before the committee. I do not know how to particularise $70 million of unexplained expenditure. I do not know how to particularise a whole range of other issues that really needed investigation. I wrote back to them on 28 June. I set all of this out in a letter to the chairman of the public accounts committee. At the end of the letter, I said:

Mr Fletcher seemed to want to ignore that, and in the report he says:

That is just a blatant lie—and this from a parliamentary committee that should report things accurately. I asked them to reconsider and allow me to appear before the committee. They did not. They did not correspond with me further. Those are the facts of the matter and the correspondence will support that.

Coming to the issues in respect of Trust Bank in the very short period of time I have, I asked the police to investigate a range of matters as well. In part, they have done so. No, they have completed an investigation and concluded a number of matters. But I think some of those issues are still unresolved and I have raised this with the police. The police have undertaken to relook at some of the issues. The reason I asked them to do that is this: in terms of its operation, in particular of its officers and directors et cetera, the Trust Bank is governed by the Trustee Banks Act 1985. Section 16C(5) of the Trustee Banks Act 1985 says this:

Here is a little story that I think, quite frankly, shows a prime example of how this has happened. Trust Bank gave a person known as Mr Owen Lindsay Parkinson $100,000 in the form of a sponsorship for a racing car. Mr Owen Lindsay Parkinson did not even own a racing car. Mr Owen Lindsay Parkinson then applied to the bank for a loan to buy a racing car, and the bank—marvellous bank that it was!—took it upon itself, as I understand it, at the direction of Mr Kemp, the managing director, to loan Mr Owen Lindsay Parkinson $90,000 to buy a racing car. That is okay. But what the bank then didagain, as I understand it, at the direction of the managing director, Mr Kempwas say to Mr Parkinson, `And by the way, you can pay the loan out of the $100,000 sponsorship money we have given you.' If that is not in breach of section 16C(4), I simply do not know what is.

Another matter I raised is in respect of a former officer of this bank who bought a repossessed car, that is, a car that was repossessed by the bank. There is nothing wrong with that. It does happen from time to time. I am not sure it happens with banks but I know it happens with insurance companies et cetera. In this particular case a very interesting set of circumstances occurred. I think it was a Mr Peter Spinks who took possession of this car, and he placed it in a shed that he rented—not far from where I live actually. The car was repossessed. It should have been sold. Both the customer of the bank and the bank should have sought to recover the money from the value of the car. Of course, as I said, there is nothing wrong with the bank selling an employee a car that has been repossessed. There are processes there to enable them to do that. The car could have been valued. Mr Spinks, if he had an interest in the car, could have said, not unlike any other bank employee, `I am interested in buying the car; I will put in a bid in for the car,' and the bank board could have either accepted or rejected that. But no, not in this case. Mr Spinks took the car and he hid it for over eight weeks. I wonder why.

In the circumstances where a person has an interest in purchasing a vehicle that has been repossessed by the bank, there is a process there you could quite easily go through. The bank could have said, `Yes, Mr Spinks, we'll take an offer from you for the car.' They could have said, `We'll put a holding order on the car.' They could have advised the car yard, which is where it was supposed to be, that the car had an offer on it and it was not to be sold. There is nothing wrong with that. But no, it was not the case here. Mr Spinks, who was a senior officer of this bank, took the car and hid it. Again, why did Mr Spinks do that when there was a genuine process available to him and to any other member of the bank staff to buy a car? Why did he do that?

I suggest that he did that for the very reason that is set out here in section 15C(5). He sought to gain an advantage for himself. There is no other explanation for somebody taking a car and hiding it in a shed that they rented. I can deal with, and I will deal with ultimately, the value of the car and the price that Mr Spinks paid for it. As I said, this bank had very clear guidelines under which its officers and directors were obliged to operate. They had a position of trust in the Tasmanian community. They had a very significant responsibility. It is not for them to take advantage of their position, and they should be held accountable for that. Likewise, nor should they provide the type of opportunity that was provided to Mr Owen Lindsay Parkinson in respect of giving him $100,000 for a sponsorship deal for a racing car he never had and then lending him the money, $90,000, to buy the car, which he paid them back with the money they gave him for the sponsorship. That is a fact. If that is not in breach of the Tasmanian Trustee Banks Act, I do not know what is.

Of course, I have raised another issue in relation to the managing director of the bank selling his personal car into the bank's car pool. It could be said that maybe this was an arrangement the managing director had with his former employee, being the old Savings Bank of Tasmania, but of course no record would show that. The bank records, that is, the assets register, show that only one car was ever sold back into the car pool. This was a car that, according to the recognised valuers of secondhand cars, had a value of somewhere between $28,000 and $32,000. That was the top end of the scale. It was a Rover Stirling. According to my information, it was a 1989 model. This bloke sold it into the bank's car pool for $44,000.

Of course, the explanation received for that is that the bank used for the vehicle, which was bought for $50,000 two years before, a depreciation figure of 15 per cent. Why? Depreciation is about taxation. The bank would depreciate its own assets for the purposes of taxation but you would not use a depreciation of 15 per cent—let alone the fact that it should have been much higher than that for a secondhand vehicle anyway—to determine a price you would pay somebody for a vehicle. That is simply not the case. Again, just on that brief explanation, because there is still much more detail to come out about this, I would ask anybody how that is not in breach of section 16C(5) of the Trustee Banks Act 1985, which says:

In the very short period of time I have left, I want to say with respect to people in the banking industry—and they come under enough flak as it is—that for this sort of thing to occur in a small state-based bankand it was the smallest bank in Australiais outrageous. The fact that it has been allowed to go almost unchallenged, except by me, is a travesty of justice. It is a disgrace that the state government will not take this issue up. Instead, what have they done? They have rewarded people. The chairman of the board has been given another chairman's responsibility in a paid position. This is a bloke who was with a board of directors who paid themselves half a million dollars in retirement benefit allowances. (Time expired)

The ACTING DEPUTY PRESIDENT (Senator McKiernan)—Senator Murphy, earlier in your speech, you made a comment about a member of the Tasmanian parliament which could have been taken to be reflecting on a member of another parliament. That is not allowed in the standing orders. I ask you to withdraw that comment that you made.

Senator Murphy —I would withdraw any comment in that respect. What I said was that what was in the report was a lie, and it is a lie. That is a fact. There is documentation that will support that. I will not withdraw that. I do not believe I should be asked to withdraw it, because it is a fact. If I am to be asked to withdraw what is a report that reflects on me as a result of a lie, then I will not withdraw it.

The ACTING DEPUTY PRESID-ENT —As we heard it at the timeand I must say I missed the words at the timeI thought you were making the comment in relation to a member of parliament. If you are making the comment in relation to a report, there is no need to proceed further with a withdrawal.

Senator Murphy —If I did reflect on the member, that would be the case, but I am talking about what was in the report. What is in the report is a lie.

The ACTING DEPUTY PRESID-ENT —Thank you, Senator Murphy. I appreciate your candour.