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Thursday, 14 August 2003
Page: 18624

Mr McCLELLAND (9:46 AM) —In the years before he placed the Metro group of companies into voluntary administration, Paul Caughlan went to his accountant and arranged an asset protection scheme quarantining his family's extensive property interests through an intricate web of transactions. In the months before the administration, Paul Caughlan and his sons, Craig and Jason, transferred their employees to subsidiaries that had no assets. In the weeks before the administration, Paul Caughlan and his sons presented a financial report which said that the subsidiaries had promised not to call on the holding company should they themselves collapse. In the hours before Metro Group collapsed, Paul, Craig, and Jason Caughlan spirited their luxury cars—including Mercedes and cruisers—away from the family's million-dollar waterside mansion at Burraneer Bay.

With the scheme in place, Paul Caughlan was prepared to sign off on an enterprise agreement with the AMWU, which represents around half their work force. The imminent administration had never been mentioned during six months of negotiations. Despite his family's massive financial resources, when Paul Caughlan finally announced the administration on 10 July he said that there was no money to pay the more than $9 million his 300 employees were owed in entitlements—including more than $800,000 in superannuation which had gone unpaid for a year. Last week several of his other unsecured creditors, small businesses and tradespeople who had been supplying Metro Group, announced that they themselves would be forced into administration because of the non-payment of debts by Metro.

Australians are entitled to ask why, after nearly eight years of John Howard's government, so many hardworking battlers can go to work one morning to find that without warning they have lost everything—their income, their accrued entitlements, their superannuation, even their payroll deductions to health funds and the Child Support Agency. Why is it that these honest Australians worry about how to pay the mortgage, support the family and put the kids through school while those they trusted to run the company appear to have amassed a fortune and placed it beyond the reach of the law? This is not the secure and stable country that John Howard promised Australians eight years ago. More than ever, hardworking Australians are vulnerable to financial devastation because of corporate misbehaviour. John Howard promises security but delivers insecurity. The Australian Labor Party has put its plans on the table to establish a national scheme to protect employee entitlements and to strengthen the Corporations Law to protect vulnerable employees and creditors from losing what they are owed. Without these policies we will see a lot more hardworking Australians hurt by the sorts of disgraceful rip-offs that occurred at Metro.