Citizens Electoral Council of Australia

Media Release Thursday, 5 June 2014

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

Who is terrified of Australia’s local councils supporting Glass-Steagall?

Australia’s peak local government forum has blocked from the agenda of its next meeting a motion supporting a policy to ensure, among other things, there could never be a repeat of the financial fraud that cost many councils tens of millions of ratepayers’ dollars in 2007-08.

The motion, which the Strathfield Council put forward for discussion at the Australian Local Government Association’s (ALGA) National General Assembly in Canberra on 16-18 June, opposes the planned “bail-in” legislation being drafted in Treasury, and supports instead a Glass-Steagall separation of the real economy from financial speculation. Similar motions have been passed in other local councils, including Beverley Shire Council in WA, and Glenelg Shire Council in Victoria; moreover, 166 current and former councillors and mayors added their names to a full-page advertisement in The Australian on 3 December 2013, entitled “To the Australian Parliament: Don’t seize our bank accounts—pass Glass-Steagall”.

Click here to read the motion.

The content of this motion is directly relevant to the financial security of local councils. The planned bail-in law as applied in Cyprus in March 2013, would seize funds from “unsecured creditors”, including a portion of every bank deposit, to prop up a failing bank. By necessity, local councils maintain large deposits in banks, and if such a law were used it would wreak havoc on the daily functions of all individuals and organisations, including, emphatically, local government.

The Glass-Steagall part of the motion presents a far better alternative to bail-in: It would keep Australia’s banks functioning without damaging individuals or organisations, by completely separating retail banking from high-risk, speculative investment banking that is currently threatening to crash the entire banking system. A Glass-Steagall separation will protect the retail banks, their deposits, and the real economy that they service, but the investment banks and their $23 trillion in derivatives gambling bets will be left to sink or swim on their own.

Who’s got something to hide?

Under a Glass-Steagall separation of speculation from the real economy, Wall Street and London banks would never have been able to prey on Australian local councils and charities, the way Lehman Brothers’ subsidiary Grange Securities, and others such as ABN AMRO and the investment arm of CBA, did before 2008, defrauding hundreds of millions of ratepayers’ dollars.

Why, therefore, would ALGA block a motion to debate a policy that would protect councils from such predatory and fraudulent financial practices?

In the CEC’s experience, the only opponents of Glass-Steagall are those with a vested interest in keeping the system in which financial predators are able to loot regular people and public finances!

Investment bankers preyed on local councils because they regarded them as easy touches to be conned into buying their toxic derivatives. To ensure that the municipal fund managers were oblivious to how risky the investments were, the banks would fraudulently structure the derivatives into very complicated products that could be passed off as gilt-edged; in the case of the CDOs (collateralised debt obligations) that cost Australian councils millions, ratings agency Standard & Poor’s was in on the sting, taking money from the banks to give the CDOs a triple-A credit rating.

Nobody in the banks or ratings agencies anywhere in the world has gone to jail for this fraud!

In the case of the two states where local councils lost heavily, NSW and WA, Lehman’s subsidiary Grange Securities had the added advantage of being officially recommended to its victims: the Western Australian Local Government Association appointed Grange as a “preferred supplier for investment advisory services to local government”; and in NSW the company that manages superannuation for local councils, Local Government Financial Services P/L, recommended Grange to its local government clients. Councillors have recalled to the CEC that Grange was very aggressive in its sales tactics, and that if councils didn’t respond to Grange’s deal promising two per cent interest more than similarly rated investments from other sources, their superiors at a state level would imply they were being irresponsible.

This raises serious questions that demand answers: How did this official recommendation of Grange et al. come about? Who was involved from the local government side, what are their connections to the banks, and are they involved in the decision to block this Glass-Steagall motion?

What you can do

Ratepayers who support Glass-Steagall and oppose the bail-in law should call their local councillors, and the executive members of ALGA, to demand that they allow the Glass-Steagall motion to be debated.

Call or email the executive members of ALGA from your state (below) and tell them that Glass-Steagall is clearly a local government issue, and it must be debated at ALGA’s 16-18 June National General Assembly in Canberra.

MAYOR FELICITY-ANN LEWIS
ALGA President
Past President, Local Government Association of South Australia
Mayor, City of Marion, SA 08 8295 4663 or 08 8375 6611
mayorea@marion.sa.gov.au fel@marion.sa.gov.au

MAYOR TROY PICKARD
ALGA Vice President
President, Western Australian Local Government Association
Mayor, City of Joondalup, WA 08 9400 4450 or 08 9400 4000
troy.pickard@joondalup.wa.gov.au

CR KEITH RHOADES
ALGA Vice President
President, Local Government NSW
Mayor, Coff’s Harbour City Council, NSW 0408 256 405 or 02 6653 1507
keith.rhoades@chcc.nsw.gov.au

CR LYNETTE CRAIGIE
Deputy President, Western Australian Local Government Association
President, Shire of East Pilbara 0427 174 919 or 08 9175 0823 or 08 9175 3661
wpcnew@benet.net.au

CR WILLIAM MCARTHUR
President, Municipal Association of Victoria
Councillor, Golden Plains Shire Council, VIC 0437 984 793 or 03 5342 4360 or 03 5220 7111
cr.bmcarthur@gplains.vic.au

MAYOR BARRY EASTHER
President, Local Government Association of Tasmania
Mayor, West Tamar Council, TAS 0408 334 936 or 03 6323 9344
barry.easther1@bigpond.com

CR BRUCE MILLER
Local Government NSW
Councillor, Cowra Shire Council, NSW 0428 629 934 or 02 6340 2000 or 0427 300 144
Email contact via the Cowra Council
council@cowra.nsw.gov.au

MAYOR KYM MCHUGH
Past President, Local Government Association of South Australia
Mayor, Alexandrina Council, SA 08 8554 9551 or 08 8555 7000
kym.mchugh@alexandrina.sa.gov.au

MAYOR DAMIEN RYAN
President, Local Government Association of Northern Territory
Mayor Alice Springs Town Council, NT 0428 825 392 or 08 8950 0525
dryan@astc.nt.gov.au

MAYOR TONY JACK
Vice President, Local Government Association of Northern Territory
Mayor Roper Gulf Shire Council, NT 08 8972 9000 or 0428 793 132
tony.jack@ropergulf.nt.gov.au

CR MARGARET DE WIT
President, Local Government Association of Queensland
Councillor Brisbane City Council QLD 07 3403 8888 or 07 3407 0220
pullenvale.ward@ecn.net.au

MAYOR DARYL QUILLIAM
Vice President, Local Government Association of Tasmania
Mayor Circular Head Council, TAS 0408 543 927 or 03 6452 3008
dbquill@bigpond.net.au cr.dquilliam@circularhead.tas.gov.au

MAYOR DAVID O’LOUGHLIN
President, Local Government Association of South Australia
Mayor, Prospect City Council, SA 0408 598 863
david.oloughlin@prospect.sa.gov.au

CR GREGORY BELZ
Member, Local Government Association of Queensland
Councillor, Rockhampton Regional Council, QLD 0417 287 859 or 07 4928 7859
greg.belz@rrc.qld.gov.au

CR MARY LALIOS
Deputy President (Metro), Municipal Association of Victoria
Councillor, City of Whittlesea, VIC 0400 132 117 or 03 9217 2170
mary.lalios@whittlesea.vic.gov.au

Click here for a free copy of Glass-Steagall Now!, to find out how Glass-Steagall and national banking will ensure the common good of the people in the economy.

SPECIAL ANNOUNCEMENT: The ALP, Liberals and Greens are ganging up to make it harder for other parties to contest elections, by tripling the membership requirement. If you support the CEC’s ideas, it is time to act by joining as an Associate Member for 1 year, so the CEC can remain registered. Click here to join the CEC as a member.

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