It’s Time to Demand Your 70.3 cents back from the Government

China bled another 6.3% off its stock market while you were enjoying lamingtons and lamb chops on Tuesday. That means it might not be a great day on the ASX today.

I could bang on about all that again. Or I could bring your attention to other problems Australians face. Like the fact that the government is continuing to rip us off.

Today I’m going to push the market craziness aside — because it’s getting me down — and tell you about our sneaky, lavishly housed Aussie leaders…

A surprising account balance on your internet banking

Imagine waking up one day to find $681 million sitting in your bank account. Can you picture it? You log in to your internet banking and see the following,

Account Balance: $681,000,000.00

Clearly you would know straight away there was some kind of error in play. If you were the honest type, and I reckon you probably are, then you’d call the bank. You say, ‘hey I think you stuffed up here. You’ve put $681 million in my account.’

If you did nothing you know that soon enough the bank would catch on. They’d call you and say, ‘Hello, we made an error. Obviously that’s not your money.’ If you spent any of it, they’d want it back — and so they should.

But let’s really think about that amount, $681 million. If you look at the balance sheet of ANZ [ASX:ANZ], ‘Cash and due from banks’ totals $1.773 billion.

If ANZ were to transfer $681 million into your account it would be 38.4% of all their cash. It’s an incredible amount of money.

But if you’re filthy rich then $681 million isn’t much at all. In fact if you’re the Prime Minister of Malaysia, then $681 million is just a gift from a nice friend.

You wouldn’t expect a Prime Minister (of any country) to be so loaded with cash that he forgets to mention a $681 million gift to his personal bank account.

But that’s exactly what Prime Minster Najib Razak did last year. Early in 2015 it came to light payments had found their way into the personal account of Razak.

He’s since been under investigation from Malaysia’s anti-corruption committee. In June 2015, Prime Minister Razak sacked the Malaysian Attorney General, who was leading the investigation into the scandal.

On Tuesday news broke these payments were a ‘personal donation’ from the Saudi Royal Family. And the new Attorney General has cleared Razak of any criminal offences and corruption.

The new Attorney General also said $620 million was sent back to the Saudis. Still no one can explain why the Saudi’s decided to send the money to start with. Razak can’t. The Attorney General can’t. The Saudi’s wont.

But hold on, where did the remaining $61 million go? Your guess is as good as anyone’s.

Is this government corruption at its finest? Not according to the Attorney General. Even if this is above board (cough, cough) it’s a prime example of wasted money going who knows where for who knows what.

Paying for someone else’s renovations

Who else is blowing wads of cash on who knows what? That would be the Australian government.

While the economy flounders there’s been some big spending in government. Julia Gillard’s Labor government was at the helm when she approved renovations for The Lodge. If you don’t know what The Lodge is, it’s the primary government funded (tax payer funded) residence of the Prime Minister of Australia.

When Gillard commissioned the renovation she approved a budget of $3.19 million.

However the place has been empty since Kevin Rudd in 2013. It’s been sitting there for three years. And only just now have renovations finished.

Prime Minister Malcolm Turnbull is moving in to the newly renovated Lodge. And if you thought $3.19 million was ridiculous — guess what the final bill is?

Around $9 million.

That’s right, nine million dollars.

This isn’t the first renovation either. Menzies did one in 1939. Then Holt in ’66. Gorton in ’68, Frazer in ’77 and then in ’78, Hawke in ’87, Keating in ’91 and Howard in ’96. I wonder over the years exactly how much government money — sorry, how much of your money — has gone into The Lodge?

I can appreciate it’s important to keep an aging house up to date. If the leader of the country is going to live there it should be functional for them too. And it should be secure and safe.

But $9 million for renovations is absurd. Yet no one is being held to account for it. Why should we all foot the bill? Let’s not forget this is just the primary residence of the PM. Kirribilli House in Sydney is the secondary residence.

Real Estate blog, Movoto did a fictional real estate listing for Kirribilli House giving it a valuation of around $54 million. An article in Domain in September last year suggested that, ‘There’s been revived talk of ghosts at the official residence and even a $15 million sale to possibly a Chinese buyer.’

Two houses for one person with a combined value of around $69 million. And another $9 million spent on doing one up — that probably has ghosts in it…

Does any of this seem reasonable to you? Hell no. Of course it doesn’t. You foot the bill for that $9 million renovation. We all do. Our taxes go towards it. It doesn’t come from the personal account of Gillard, Rudd, Abbott, Turnbull or anyone else (maybe we can ask Razak?).

If you look at the numbers, you gave the government 70.3 cents for that renovation. With a $9 million job and 12.8 million taxpayers in 2013 that’s about 70.3 cents per taxpayer. Now that doesn’t sound like much. It’s not really. But you paid for it. So did I. And I want my 70.3 cents back.

I guess 70.3 cents isn’t as bad as $6,000…

Of course this isn’t the first time the government have taken cash from Australian’s for frivolous purposes. Every year they transfer ‘lost’ superannuation into the Consolidated Revenue pot.

The threshold was $2,000. This year it will be $4,000. Next year, $6,000. You could have money in a ‘lost’ account — maybe $5,999. If the account is inactive and you can’t be contacted (they might just not have your details) then that money is going to the government. And they can do with it what they please.

Now this isn’t corruption. Not like Malaysia or Brazil, China, Spain, Nigeria, Guatemala, Ghana, the UN or FIFA. But is it really that different to the financial scandals plaguing governments around the world?

According to latest figures from Transparency International, Australia ranks eleventh of 175 countries in the ‘Corruption Perception Index 2014’. Malaysia ranks fiftieth.

But is the gap really that big?

Who are the people taking charge of Australia? You work hard, save, invest, and try to build a financial future for yourself. Then government cronies go and blow a wad of cash on a home renovation.

Chances are, later this year, you’ll get a chance to have your say. It would be great if there was an option on the ballot sheet to kick them all out. But I don’t think that will happen.

Still, look hard and long at who’s going to be in charge. Who’s going to do the least damage to your way of life? Who might take Australia forward rather than fritter cash away or steal it from you. And then in the end, choose the best of a bad bunch.



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Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

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