Senator FAULKNER (Leader of the Opposition in the Senate) (1:27 PM) —Yesterday, in regard to Minister McGauran's gambling interests, Senator Alston said:

Let us put the facts on the record. It was Minister McGauran as the acting communications minister who announced the government's moratorium on interactive gambling. He was acting for Senator Alston, who was absent from Australia from 12 to 29 May 2000 on a swing through Argentina, Uruguay, Chile, Brazil and Mexico. As the acting communications minister, on 19 May 2000 Mr McGauran held a doorstop interview and on 25 May 2000 he issued a joint press release with Senator Newman. On both these occasions he actively and enthusiastically promoted the government's policy to introduce a ban on online gambling and to make that ban retrospective to 19 May. Mr McGauran said at his doorstop:

While it was clear this temporary ban was for 12 months, Minister McGauran expressed the view that the preferred course of action for the government was to extend the ban indefinitely into a permanent moratorium. We should be very clear about the commercial effects of such a ban. It directly benefited everyone with interests in the existing gambling industry. Interactive gambling represented a great threat to those who operated existing forms of gaming and wagering. What is more, those with the most to lose were those operating gaming that is most easily transferred to the Internet, such as electronic gaming machines that are currently in pubs and clubs—the pokies, the one-armed bandits.

Later last year Mr McGauran took the Interactive Gambling (Moratorium) Bill 2000 through the House of Representatives. At that stage, the public and most parliamentarians were unaware that the minister held significant and valuable interests in a poker machine gaming facility. Why? Because Mr McGauran had chosen not to disclose the holding on the register of members' interests and had hidden this holding and other assets through a complex web of family trusts and private family companies. All this comes from the public record. Gaming industry sources have informed us that while it is difficult to quantify the actual effect of competition to their industry from any commencement of online gambling, they estimate that Internet gambling would reduce their turnover by some 10 per cent to 20 per cent.

Let us turn to the trail of Mr McGauran's multimillion dollar interests, again using public sources including asset documents and the Victorian Casino and Gambling Authority web site. I am sure it will come as no surprise to anyone that Minister McGauran's commercial interest in 70 poker machines is held via a trust, the Peter John McGauran Family Trust in fact. Once again, a minister in this government has gone for the tax avoidance vehicle of choice, the family trust, in order to conceal a conflict of interest and to minimise tax at the same time. It is worth dwelling for a few moments on the exact nature and structure of Minister McGauran's holding so no-one can be left in any doubt as to his direct conflict of interest. The 70 poker machines are operated from The Millers Inn hotel situated in Altona North. The Millers Inn hotel is in turn owned by a company called McGauran Altona Pty Ltd, which I will go into in more detail in a moment. It is interesting to note that the Victorian government has recently capped the number of poker machines in the local government area of Bass Coast Shire within Mr McGauran's electorate of Gippsland on the ground that poker machines were too socially and economically devastating for that area. Mr McGauran clearly did not wish to have an interest in the social and economic devastation of his own constituents; perhaps he is a little bit more comfortable fleecing the battlers of West Melbourne. The Victorian Casino and Gaming Authority, the VCGA, lists McGauran Altona Pty Ltd as the venue operator of 70 poker machines, but even more importantly it lists Peter John McGauran, along with his brother, Julian McGauran, and five other members of the McGauran family as approved associates—in other words, Mr McGauran and six other individuals have been approved by the VCGA to hold and operate, as associates of McGauran Altona Pty Ltd, its 70 poker machines.

To properly appreciate the import of being named on the licence as an individual associate, you need to consider the meaning of `an associate' under section 4 of the Victorian Gaming Machine Control Act 1991, which states:

Named associate individuals and entities are subject to the full probity checks applying to the licence, and there is a range of measures taken to check on the probity of all those persons, including police checks and personal questionnaires. Mr McGauran would have been required to complete such a questionnaire when the licence was issued or renewed, and we know that this licence was originally issued on 12 November 1992 and was renewed on 12 November 1997.

I will now turn to the shareholders of McGauran Altona Pty Ltd. According to the latest ASIC records available, there are eight shareholders in this company. Seven shareholders are individuals, each holding one ordinary share. Senator Julian McGauran is listed as a shareholder but his brother, Mr Peter McGauran, is not. But it is the eighth shareholder, a company, which is the most important shareholder and provides the clear link between Mr McGauran and his commercial interest in the 70 poker machines. Rozinta Pty Ltd holds a total of 199,993 of the 200,000 shares issued, or 99.99 per cent of the issued capital of McGauran Altona Pty Ltd. It is the ultimate owner of The Millers Inn hotel and, therefore, the ultimate beneficiary of the profits that are derived from the 70 poker machines that the hotel runs. It is here that Minister McGauran's commercial interest in the 70 poker machines becomes apparent. According to Mr McGauran's own declaration of interests he personally owns one share in Rozinta Pty Ltd, but once again, more importantly, he lists the Peter John McGauran Trust as holding a one-sixth interest in 20,000 ordinary shares in McGauran Altona Pty Ltd. We do not actually believe that the 20,000 share figure is correct because there are eight shareholders in McGauran Altona Pty Ltd, seven individuals each with one share and Rozinta Pty Ltd with the remaining 199,993 shares. So we have to say we are slightly perplexed as to how there is a one-sixth interest in only 20,000 shares. It is our belief that this maybe should have read 200,000 shares and that perhaps an error has been made. No doubt Mr McGauran can clear up this anomaly. But I note in passing that Senator Julian McGauran has made precisely the same entry in his declaration and, given that the two declarations are in exactly the same format, it would seem that one simply formed the template for the other down to the same possible mistake. I further note that Senator McGauran's declaration was lodged some time before his brother's. It is also our contention that Rozinta holds the shares in McGauran Altona Pty Ltd in its capacity as trustee for the Peter John McGauran trust, given that there are six shareholders in Rozinta, of which Minister McGauran, along with his brother, Julian McGauran, and four other members of the McGauran family are also shareholders.

With six members of the McGauran family each holding one share in Rozinta it is quite easy to see how both the McGaurans hold individually a one-sixth interest in McGauran Altona Pty Ltd if, indeed, Rozinta Pty Ltd acts as trustee for six separate family trusts, including the Peter John McGauran trust, and each of those McGauran family members then holds one of the six shares issued in Rozinta.

In support of this, I also note that Senator Julian McGauran, through the Julian McGauran trust, also holds a one-sixth interest in 20,000 ordinary shares in McGauran Altona Pty Ltd. Likewise, if the contention that Rozinta Pty Ltd is the trustee of the Peter John McGauran trust is not correct, I would ask: who is the trustee of the Peter John McGauran trust? It is clear that Minister McGauran, through the Peter John McGauran trust and a web of family companies, has a direct commercial interest in 70 poker machines run and operated from The Millers Inn hotel. What is also clear, and worth stating for the public record, is that it was the National Party that led the charge to have the government's anti-avoidance measure, the taxation of trusts, stumped. Here we have once again a minister in this government—this time from the National Party—using the preferred tax avoidance vehicle of choice, the family trust, by which to minimise tax and try to disguise the most blatant of conflicts of interest we have seen since Senator Parer and his $2 million worth of coal shares. As one National Party backbencher said last week of his leader, `More Liberal than the Liberals.'

Finally, we used some public VCGA figures yesterday regarding the average player loss per poker machine in the local government area of Hobsons Bay to determine a likely income stream for the venue operator, for the family trusts and, finally, for Mr McGauran himself. The average player loss per machine in that area is $66,203. Multiplied by 70 machines in The Millers Inn hotel, that is a total player loss—that is, turnover minus winnings paid out—of $4.63 million. Minus the 75 per cent normally paid to the supplier of the machines—in this case, Tattersalls—that leaves $1.15 million for the venue operator. This is pure profit for the venue operator, McGauran Altona Pty Ltd, and its ultimate owners, the six McGauran family trusts.

I saw on television last night various shots of the exterior of the hotel, and a huge sign caught my eye proclaiming `pots of gold'. Too right. These poker machines are certainly pots of gold for Minister McGauran. Minister McGauran's one-sixth share of that profit stream is some $191,000 per year on 1999-2000 figures—and this is without calculating the extra bar and food takings from the patrons of the poker machines. To put this $191,000 profit stream in perspective, Mr McGauran's salary is $141,750 per year and, if we translate the industry's inside figure of online gambling threatening 10 to 20 per cent of their business, the existence of a ban on online gambling was worth between $20,000 and $40,000 to him personally. No wonder he was so enthusiastic in promoting the ban publicly while being acting minister. This is an open and shut case of a conflict of interest. This is a clear breach of the Prime Minister's code of conduct. (Time expired).