Investigations by the New South Wales Independent Commission Against Corruption around illegal political donations have uncovered a trail of emails that lead all the way to Tony Abbott’s chief of staff, Peta Credlin.
The suggestion is that Brickworks (which is a major brick manufacturer but also has a side interest as a property developer) managed to achieve some degree of sinister influence over Liberal Party policy to axe the carbon tax via $384,000 of donations to various Liberal Party entities from July 2010 to April 2011.
It’s rubbish. But the truth is far more sinister and, indeed, bizarre.
The interaction between the Liberal Party and Brickworks’ chief executive in fact provides an insight into how business representatives faithful to the Liberal Party were skilfully used to assist Tony Abbott in an elaborate lie to scare the Australian people into voting for him.
The emails released by ICAC essentially involve a Liberal Party official seeking to pass on to Abbott, via Credlin, encouraging comments from Brickworks chief Lindsay Partridge about Abbott’s already well-established scare campaign against the carbon price.
The email from Partridge says, “Tell Tony to stick to his guns on no carbon tax” and spurts a phrase tailor-made for sloganeering: “Business does want certainty. We want certainty that there is no new tax.”
Credlin — always on the lookout for another vacuous but catchy slogan for her boss — replied to the Liberal Party official, asking whether she could get in contact with Partridge to use his slogan and his business as an example of businesses’ attitudes to the carbon tax in parliamentary question time.
Labor is suggesting this shows a pattern of corruption where political donations buy favours. Brickworks was paying “cash for questions”, Labor’s Mark Dreyfus exclaimed. But actually, the favours are being granted in the other direction.
In the lead-up to Abbott’s election, the chief executive of Brickworks and other business executives and lobbyists aligned with the Liberal Party repeatedly put out claims to the media about how a carbon emissions trading scheme would lead to jobs flowing overseas and lead to significant increases in householder costs. In almost all cases the claims failed to materialise and were horribly exaggerated. But they served to provide vital ammunition for Abbott to scare the general public about the impacts of an ETS.
Thanks to Partridge, we saw headlines like “Carbon tax will make house prices soar”. The Brickworks’ chief claimed the carbon tax would increase the cost of building a new home by 10% while at the same time making the contradictory claim it would dangerously squeeze company earnings, putting business under threat from overseas competitors.
He boldly stated on the carbon tax:
“The end result will be an exodus of manufacturing industries and investment offshore, jobs will be lost, the cost of housing will increase and there will be no change to carbon emissions. The sooner the current plan is abandoned the better.”
Being a clever political operator, Credlin no doubt saw a fantastic opportunity for her boss to use a friendly business executive to help his campaign. Abbott visited Brickworks sites several times, donning the hard hat and fluoro vests while shrilly repeating Partridge’s claim the carbon tax would lead to a 10% increase in Brickworks’ costs.
But what we actually find within the hard data is all rather different.
“So what did Brickworks shareholders get for their $384,000 donation to the Liberal Party? It’s not really clear.”
The National Greenhouse and Energy Reporting Scheme is a wonderful thing because it tells us the quantity of CO2 emissions Brickworks, and a range of other businesses around the country, produce directly or via their electricity consumption.
This shows, in the year the carbon price commenced in 2012-13, Brickworks emitted 317,834 tonnes of CO2 directly and indirectly via electricity consumption. At $23 per tonne this was $7,310,182 in extra costs on revenue for the building products division that year of $568 million — or 1.3%. If we delve further into its annual report and another government emissions database — the Liable Entities Public Information Database — we find Brickworks was exposed to a direct carbon tax bill of something far lower — $2,765,221, or 0.5% of revenue.
How this was supposed to lead to a large surge in the cost of building homes is anyone’s guess. But the 2012-13 annual report reveals:
“EBIT [a measure of its profits] was $32.8 million, up 14.9 per cent on the prior year, driven primarily by a strong improvement in the Austral Bricks division. Good pricing outcomes in this division enabled margins to be enhanced despite flat volumes.”
In other words, Brickworks appears to have cleverly hiked its prices in the period the carbon tax commenced, well above any increase in its costs over this period. So, perhaps Brickworks isn’t at risk of being wiped out by overseas competition…
So, did the cost of new homes surge by 10%?
Thankfully for us, bricks aren’t the only input into building a house. The Australian Bureau of Statistics produces an index of the cost of residential house construction, which shows a rise of 3.7% from June 2012 to June 2013. This is almost spot on with the average annual rise in the cost of house construction since 1997.
What’s also interesting is that Brickworks’ 2012-13 annual report notes that it was slated to be a major beneficiary of funding from a program set up under the carbon pricing policy package called the Clean Technology Investment Program, a program the Abbott government abolished.
Brickworks is listed as the recipient of government grants totalling $17 million, which would support energy efficiency projects that, the company claimed, were expected to save it $11.7 million per annum on its energy bill. In other words, not only did Brickworks pass on price increases exceeding the carbon cost to its business but, in addition, it took funding from a carbon pricing initiative to save it money on its energy bill which was significantly greater than its entire carbon price liability.
So what did Brickworks shareholders get for their $384,000 donation to the Liberal Party? It’s not really clear.
Another email released by ICAC shows that Liberal Party official Paul Nicolaou invited Partridge to a “very private dinner” with Abbott and 10 senior business leaders in mid-2010. Partridge replied, “Send me the details, will I get a photo with Tony like I got from John Howard?”.
In spite of Partridge donating $250,000, the event was cancelled leaving him without a photo with Tony. But no doubt he got one later, when Abbott came visiting with his hard hat and fluoro vest.
*This article was originally published at Climate Spectator
Great piece, but a nasty situation indeed we find ourselves in.
A web of lies, cynicism and greed from the Liberal Party and its corporate interests. The BS from Partridge should be astounding, but sadly it will probably surprise few – such is Liberal Corporate Crony World.
I am not sure when and if I will need bricks, but I will remember to boycott Brickworks.
Resistance to carbon pricing by a brickworks demonstrates that carbon pricing works to reduce carbon emissions. He was being outcompeted by lower-carbon rivals, with the result that national emissions would drop.
If all builders only used crude solid bricks, the brick maker could simply pass on the cost of carbon onto his customers and shrug, business as usual. However there are alternatives.
Bricks need to be soaked at high temperature for some hours, perhaps a day. Extruded bricks can be made holey and thus much lighter than solid bricks. The smaller mass needs less fuel to heat up and the permeability lets the hot gases through them. But the extruders that make lighter webs cost more capital.
Tunnel kilns that run on gas are notoriously leaky, with most of the cost of fuel leaking away through ageing insulation. But new kilns cost money. Costlier, electric kilns are easier to seal too.
There are also non-fired bricks, glued together with bitumen or gypsum. And of course, there are cement-bonded bricks. That is quite apart from the growing interest in using concrete and glass.
Bring back the 1950s if you must, Mr Abbott, the interlude won’t last long.
So let me understand what Crikey is saying in the rarefied atmosphere of its editorial department.
The Coalition in opposition was drifting along wondering what sort of policy platform it should have for the election when, out of the blue, came Brickworks. Brickworks’ pitch was, Hey fellas, we’ll pitch $384,000 into your election campaign if you get rid of the carbon tax”.
Stunned by this fantastic idea, Credlin said “Can we mention your company in our campaign?”
“Of course you can, after all industry needs certainty”
“Wow” said Credlin. “Certainty for business!! Thank you for that insightful thought!! we’ll use that as well!”
Out here in the real world, it looks much more like a corrupt businessman trying to buy favour with a political party but having no impact at all on policy or favours.
Some amoral candidates took the money and they should go down for it and they are. That is the limit of this story.
Sinister and bizarre? Hyperbowl if you ask me.
And you couldn’t resist a dig at Gillard, David. You are so clever.
Headlines are such great things. Funny how they never scream “Business bribes to political parties will make house prices soar”.
Surely there’s an obvious typo in this piece? Shouldn’t the company’s name start with a P instead of a B?