THIS is the mysterious billionaire property developer behind some of the largest political donations

Primrose Riordan had lunch with Huang Xiangmo at The Century, The Star, Sydney on Thursday 22nd July 2016.

A mysterious billionaire property developer has worked his way into the inner circles of federal politics just four years after moving here from China.

THE CHINESE GOVERNMENT has a geopolitical agenda … there should be an immediate stop to political donations!

IT beggars belief why a property developer, or anyone else for that matter, would make large-scale donations to a political party?

Other than … the bleedin’ obvious …

WHAT has happened to the ASIC Investigation of 2017?


THIS is the mysterious billionaire property developer behind some of the largest political donations

Wed 10 Jun 2015

A mysterious billionaire property developer has worked his way into the inner circles of federal politics after becoming one of Australia’s top political donors and just four years after arriving from China. So, just who is Huang Changran?


  • LEIGH SALES, PRESENTER: A mysterious billionaire property developer has worked his way into the inner circles of federal politics just four years after moving here from China.

Huang Changran is one of Australia’s top political donors, pouring money into the coffers of both the Labor and Liberal parties.

It’s allowed him to build ties to the country’s most powerful people and raises serious questions about a loophole in the political donations system in Australia.

Despite his influence, he’s remained out of the public eye – until now.

Dylan Welch and Jodie Noyce with this report.

DYLAN WELCH, REPORTER: He’s one of Australia’s top political donors.

ERNEST WONG, NSW LEGISLATIVE COUNCILLOR: If you want to rank him number one, probably you can.

DYLAN WELCH: But just who is the mysterious Mr Huang?

Hi. I’m Dylan Welch from the ABC. Do you have someone who can…?

For a man who arrived in Australia only four years ago, Huang Changran has made big strides. Not just anyone gets to do this:

(Huang Changran presenting trophy at 2013 Melbourne Cup Carnival)

He paid for Trade Minister Andrew Robb to go to the races that day. And Robb is just one among his many political friends.

It’s no surprise he’s got friends in high places. Since 2012, Huang and his company have donated just over $1.9 million to the Labor and Liberal parties.

NATHAN REES, NSW PREMIER, 2008-’09: It’s poisonous and that’s, that’s – that’s not just my view. That’s the view of many people on the street. They simply can’t understand why a property developer, or anyone else for that matter, would make large-scale donations to a political party.

ERNEST WONG: So I think that is that they just find making friends to them, particularly making friends to politicians, to them is a very normal, legitimate thing.

DYLAN WELCH: In about a decade, Huang amassed a $1 billion fortune in his home province of Guangdong. He came to Australia in 2011 and bought a $12.8 million home in one of Sydney’s richest suburbs.

Huang’s company Yuhu has made 18 donations to Labor and the Liberals, dropping as much as $200,000 at a time. Huang’s wife, Jiefang, has also donated $100,000. A person sharing Huang’s last name and his home address also donated $200,000.

The donations were mainly given in the weeks around the 2013 federal election. Before the election, Yuhu gave most of its money to Labor. After Abbott won, the money went overwhelmingly to the Liberals.

JOO-CHENG THAM, UNI. OF MELBOURNE: I think the AEC records indicate that Yuhu is a very significant donor to the major parties. In the 2013-2014 financial year, for example, Yuhu made $685,000 in donations to the Liberal and the Labor Party, various branches of the major parties.

DYLAN WELCH: Under federal election law, it’s an offence to make donations on some else’s behalf unless that’s declared on your donor return. Huang’s generosity appears to have inspired his staff, with two young employees making sizeable donations.

Anna Wu is a 25-year-old marketing manager with one of Huang’s companies. Her LinkedIn profile says until late 2012 she was a barista at a Sydney chocolate bar.

Last year, the day before the crucial West Australian Senate election, Wu donated $50,000 to the Liberals’ WA branch.

Zhaokai Su is a 29-year-old Yuhu office manager. In 2013 and 2014 he donated $130,000 to the New South Wales ALP.

7.30 asked Zhaokai Su and Anna Wu to confirm the donations were on their behalf. Both declined to comment.

So I just wanted to ask Mr Huang why it is he makes so many political donations in Australia.

HUANG ASSOCIATE: He has some next appointment, so we’re going to make an appointment with you.

DYLAN WELCH: OK. I’ll give you my card.

NATHAN REES (Nov. 14, 2009): From today, the NSW Labor Party will ban donations from developers.

DYLAN WELCH: Since 2009, property developers have been banned from donating to NSW politics, but they’ve found the ban easy to get around. Due to a blind spot in federal law, developers can still donate to federal campaigns run by the state branches.

JOO-CHENG THAM: I consider this a massive loophole because it allows for the entities to be regulated by NSW election funding laws, right? The NSW political parties to actually receive thousands of dollars, in this case hundreds of thousands of dollars, for campaign purposes.

DYLAN WELCH: Huang has developed particularly close relationships with two former heads of the ALP in NSW.

As NSW General Secretary, Sam Dastyari nurtured the ALP’s relationship with Huang. At last year’s launch of the Australia Guangdong Chamber of Commerce, Dastyari was effusive.

SAM DASTYARI, FEDERAL LABOR SENATOR (2014): The demonstration, Mr Huang, of how highly you’re respected, how much all of us respect you and the work you do.

DYLAN WELCH: Three weeks later, he declared Huang’s company had paid a legal bill that Dastyari incurred as part of his role as NSW General Secretary. The bill was in the area of $40,000.

ERIC ROOZENDAAL, FORMER NSW LABOR POLITICIAN (May 9, 2013): It would be fair to say that my time in this parliament has been a bit of a rollercoaster ride.

DYLAN WELCH: When former NSW Treasurer Eric Roozendaal left Parliament in 2013, hounded by corruption allegations, he was a man in need of a job. He found one with Mr Huang and Yuhu.

NATHAN REES: I don’t think it would surprise anyone that he went there, put it that way. Mr Roozendaal, in my view, had a very significant impact on the culture of the NSW Labor Party when he was General Secretary. He was a very effective fundraiser.

DYLAN WELCH: OK. But can I ask why it is that he makes so many donations?

HUANG ASSOCIATE: He wasting a lot of time. He’ll go to next appointment, so probably will do interview next time.

DYLAN WELCH: Alright. Well I hope to speak to you again soon.

HUANG ASSOCIATE: OK. Thank you very much.

FENG CHENGYI, UTS CHINA STUDIES: Political donation in China is one way to establish your status, you know, for the smooth operation of your business. He just simply might think that will deliver here as well.

DYLAN WELCH: Little is known about Huang’s background in China. By the late 2000s, he was a major property developer in Guangdong. He had a close relationship with the mayor of the city of Jieyang, Chen Hongping. So close, that in 2010, Huang donated a $32 million traditional pagoda to the city. A year later, Chen Hongping was charged with receiving tens of millions of dollars in bribes from local property developers. Huang was not implicated in the case, but migrated to Australia late the same year.

7.30 approached Sam Dastyari, Eric Roozendaal, almost a dozen federal politicians and several Labor and Liberal Party executives for this story. Not one was willing to go on camera and discuss the billionaire property developer.

NSW Upper House member Ernest Wong is a friend of Huang’s.

ERNEST WONG: He is actually one of the top 100 philanthropist in China, as a matter of fact. And then he – I shouldn’t say that – he thinks himself a “scholar”, which I think he is, because he’s very knowledgeable.

DYLAN WELCH: In the end, Huang also declined an interview with 7.30 and his lawyer only provided a short statement saying the billionaire is an Australian resident and businessman and holds no public office. It seems the man who’s become one of Australia’s biggest political donors is content to remain a mystery a little while longer.

LEIGH SALES: Dylan Welch and Jodie Noyce with that report.






Chinese property developers turn to Liberal lobbyists amid ICAC storm

Image may contain: sky, skyscraper, tree and outdoor

DESPITE the NSW LNP having passed the Lobbying of Government Officials Act in 2011 never before has Sydney seen so much overdevelopment …in fact with the Planning Law changes from 2012/13 to date throughout the terms of the O’Farrell, Baird and Berejiklian Governments Sydney has been trashed beginning with the NSW LNP experiment … its first Precinct, the blight of the North Ryde Station Precinct with Country Garden’s “Ryde Garden” dominating the site …

It would seem that an independent investigation should extend beyond Mr Maguire’s dealings with property developers … to delve into that of other NSW LNP MPs, their politicised bureaucrats and all lobbyists during the terms of the LNP since 2011

Photo:  Country Garden “Ryde Garden” the LNP NSW Government experiment with community consultation whereby a group of residents was picked and sworn to secrecy … that was the consultation process … when the wider community learnt of this precinct it was already fait accompli!

This set the “Precinct” developments in train; a blight on what was Beautiful Sydney …

Chinese property developers turn to Liberal lobbyists amid ICAC storm

The Chinese developers at the centre of a scandal involving disgraced former MP Daryl Maguire hired a Liberal lobbyist firm just days after they came under the spotlight in a corruption hearing.

The NSW lobbyist register shows Barton Deakin was engaged by Country Garden Australia on July 20, just a week after a secret phone tap revealed Mr Maguire claimed the developers were his clients.

Mr Maguire resigned from Parliament on Friday and a byelection is expected to be held next month.

Disgraced former MP Daryl Maguire.
Disgraced former MP Daryl Maguire.Photo: Erik Anderson

Barton Deakin is one of several Liberal-aligned lobby firms that have property developers as clients.

The firm’s directors include former primary industries minister and Nationals MP Katrina Hodgkinson, who recently joined, as well as former Liberal MP for Davidson, Andrew Humpherson.

Another Liberal-aligned lobbyist firm, Crosby Textor’s property advisory CT International and Corporate Advisory, has had Country Garden as clients since April last year among other developers, the registry shows.

The former Liberal Opposition leader, Kerry Chikarovski, also appears several times on the Department of Planning and Environment’s register which lists contact between staff and lobbyists.

The register also shows Harry Hughes, the nephew of prime minister Malcolm Turnbull, became a lobbyist for property developers within a month of leaving planning minister Anthony Roberts’ office in September 2017.

Mr Hughes, who was an advisor to Mr Roberts, registered Axis Strategic Advisory in October last year and lists clients, including Atilol Holdings.

Atilol Holdings owns a 125-hectare parcel of land called “Luddenham Hills” in Orchard Hills which is currently zoned for rural use, but the company is eager to develop it into “a new urban settlement”.

The Opposition leader, Luke Foley, said there was a web of links between the government and developers that has become even more obvious since Mr Maguire’s downfall.

“Given revelations about Daryl Maguire at the ICAC, the community is entitled to be suspicious about the intimate web of connections between property developers and the Liberals and Nationals,” Mr Foley said.

“The Berejiklian Government has blighted many Sydney suburbs with over-development and the community is entitled to ask who has benefited from this approach.

“There needs to be an independent investigation into all of Mr Maguire’s dealings with property developers.”

The 25-storey tower in Campsie which Daryl Maguire lobbied in favour of.  
The 25-storey tower in Campsie which Daryl Maguire lobbied in favour of.Photo: Supplied

In the wake of the ICAC hearing, it emerged that Mr Maguire repeatedly pushed staff in government ministers’ offices for help to advance Sydney property projects.

The Herald revealed the disgraced former MP lobbied ministerial staff over a potential 25-storey residential tower in Campsie, and also over a parcel of land at Camellia on which more than 2000 apartments could be built.

Mr Maguire formally resigned from Parliament on Friday after being paid his $165,000-plus salary for several weeks despite having packed up his office and no longer representing voters in Wagga Wagga.

Several government sources said the premier’s chief of staff, Sarah Cruickshank, told staff this week that a byelection is likely to be held on September 8 or 15, depending on when Mr Maguire resigned.

“The only reason any of this information about lobbyists is available is the NSW Liberals and Nationals passed the Lobbying of Government Officials Act 2011,” Mr Roberts said.

“No one knows who was lobbying the previous Labor government. I’ve taken steps to insist the Department of Planning and Environment keeps fastidious records of contact with lobbyists and they ensure they are published.”







A man in a tie

‘We have to help our friends’: Daryl Maguire’s property lobbying revealed

Wagga Wagga MP Daryl Maguire repeatedly pushed staff in government ministers’ offices for help to advance Sydney property projects, one of which was owned by a long-time friend and another by a developer from whom he has admitted seeking commissions.

The Herald can reveal the disgraced politician lobbied ministerial staff over a potential 25-storey residential tower in Campsie, and also over a parcel of land at Camellia on which more than 2000 apartments could be built.

Disgraced Wagga Wagga MP Daryl Maguire.
Photo: Janie Barrett

The lobbying took place from mid-2016. Staff have described frequent phone calls, emails, and face-to-face meetings requesting assistance.

However the offices of the current and former planning ministers – Anthony Roberts and Rob Stokes – are also confident Mr Maguire was given no special help, other than the sort of information typically provided to MPs.

At one point in 2016 Mr Maguire was challenged by a member of Mr Stokes’ staff on why, as a rural MP, he was so interested in Sydney development. Mr Maguire’s reply to the effect of – “Don’t you know how this works? We have to help our friends” – put staff on notice to be particularly vigilant in their interactions.


Mr Maguire’s political career was effectively finished when the Independent Commission Against Corruption’s Operation Dasha played recordings showing him attempting to obtain commissions on deals involving firms he described as “clients”.

The 25-storey tower in Campsie which Daryl Maguire lobbied in favour of.  
Photo: Supplied

He was subsequently reported to have helped arrange an introductory meeting between Mr Roberts and developer Country Garden. That meeting was not to discuss a particular project, with Mr Roberts having a policy of not discussing individual planning issues.

It has not previously been reported that Mr Maguire, who has still not resigned from Parliament, used his government position to assist particular planning applications or projects.

One project about which Mr Maguire made numerous representations was a planning proposal at 124-142 Beamish Street, Campsie. The land owner, Joe Alha, started purchasing the site in early 2014. Mr Alha’s expectation was that the site would soon be rezoned as plans for the development of the Bankstown rail line were put in effect.

But following the compulsory merger of councils in May 2016, the new City of Canterbury Bankstown Council said it did not support taking the government’s draft Sydenham-to-Bankstown land-use strategy into account in considering the planning application. This has had the effect of frustrating the development, which may have contained about 310 apartments.

Mr Alha told the Herald he went to Mr Maguire for help because the two had been friends for 20 years and he needed assistance in determining the government’s policy.

“Did he make representations on my sites? Yes, he did,” Mr Alha said.

Mr Alha said he had “genuine problems” with his development and did not have other avenues for assistance.

But Mr Alha said he had never paid Mr Maguire. “Do you pay your friends?” he asked.

Mr Maguire, who was requesting meetings about the Campsie site as recently as May, helped arrange meetings between Mr Alha’s planning consultant in 2016 and 2017, Matt Daniel, and department staff.

However these meetings have not come to anything. Last week Mr Roberts said he would allow councils to devise their own land-use strategy for the Sydenham-to-Bankstown corridor, in effect further slowing the development prospects.

Mr Maguire also sought assistance with a site at Camellia owned by Charlie Demian.

In ICAC last month, Mr Maguire admitted to pursing commissions from property transactions involving Mr Demian’s development sites after he was made aware of them in May 2016.

In January 2017, Mr Maguire wrote to staff in the former Roads Minister’s office forwarding a request from Mr Demian for a meeting with Roads and Maritime Services staff about the Camellia site.

“This needs to happen,” Mr Maguire wrote to the staffer. “The response they gave was typical BS,” he said of another response provided to him.

The Camellia site has also not yet been developed. The government has committed to a light rail line near the site, and land owners at Camellia, including Mr Demian, are advocating for a rail station to be built there as part of the proposed Metro West project.

Mr Stokes said he had not met with Mr Maguire.

“I understand that my staff members provided information, as they would do for any MP who sought it,” the Education Minister said. “I have told my staff that if there were any conversations they were in that makes them feel uncomfortable in the light of the revelations at ICAC, they should talk to ICAC.”

A spokesman for Mr Roberts said Mr Maguire approached the Minister’s office in writing on two occasions, seeking meetings on behalf of property developers.

“The meetings were declined,” the spokesman said.

“Since Mr Maguire’s evidence before Operation Dasha, the Minister’s Office has reviewed and audited all contact from him concerning planning matters, and will make them available to the Commission if requested.”

The Herald attempted to contact Mr Maguire and Mr Demian.






IN NEWCASTLE …. was Jeff McCloy the “leader of the pack”?

In Newcastle anyway …

Jeffrey Raymond ‘Jeff’ McCloy is an Australian politician, who was Lord Mayor of Newcastle between 2012 and 2014. He has a degree in Civil Engineering from the University of Newcastle. Before entering politics, he ran his own construction company, which built John Hunter Hospital. In 2008 he won the Hunter Business Chamber 2008 Business Person of the Year, and in 2009 he won the City of Newcastle Medal.[1]

McCloy campaigned for the removal the rail line through the centre of Newcastle and, despite being nominally an independent, supported Liberal candidates in the Council ward elections.[2] Polling day in 2012 was marked by controversy when the running mate of an opposing candidate switched sides to support McCloy.[3]


Jeff McCloy

From Wikipedia, the free encyclopedia


Jeff McCloy
Lord Mayor of Newcastle
In office
8 September 2012 – 17 August 2014
Deputy Brad Luke
Preceded by John Tate
Succeeded by Nuatali Nelmes
Personal details
Born BelmontNew South WalesAustralia
Political party Independent
Alma mater University of Newcastle
Occupation Chairman, McCloy Group

Jeffrey Raymond ‘Jeff’ McCloy is an Australian property developer, who was Lord Mayor of Newcastle between 2012 and 2014. He has a degree in Civil Engineering from the University of Newcastle. Before entering politics, he ran his own construction company, which built John Hunter Hospital. In 2008 he won the Hunter Business Chamber 2008 Business Person of the Year, and in 2009 he won the City of Newcastle Medal.[1]

McCloy campaigned for the removal the rail line through the centre of Newcastle and, despite being nominally an independent, supported Liberal candidates in the Council ward elections.[2] Polling day in 2012 was marked by controversy when the running mate of an opposing candidate switched sides to support McCloy.[2]

In 2012, McCloy met the then Opposition Leader (and future Prime Minister of AustraliaTony Abbott to discuss the future of the Newcastle CBD.[3] In 2013, he held a joint press conference with Abbott and Newcastle victims of the Bali bombings in support of Abbott’s proposed legislation to assist victims of terrorism overseas.[4]

McCloy opposed rainbow crossings in support of Gay rights, referring to them as “nonsense”, and used council resources to remove them, despite claims they did not breach any laws. After Lake Macquarie and Cessnock councils expressed support for the rainbow crossings, McCloy attacked Cessnock as a “bloody mess” and threatened to arrange for Lake Macquarie City Council chambers to be “chalked with half a ton of chalk”.[5]

McCloy appeared at a hearing of the Independent Commission Against Corruption 14 August 2014 relating to Operation Spicer, an investigation into allegations of corrupt conduct in relation to the 2011 elections in New South Wales.[6][7] He was recalled to give further evidence on Friday 12 September 2014.

Tim Owen, the Liberal member for Newcastle, and Andrew Cornwell, the Liberal member for Charlestown, each admitted accepting amounts of $10,000 from McCloy. As a result, both Owen and Cornwell resigned from parliament on 12 August 2014.

On 17 August 2014, McCloy resigned as Lord Mayor of Newcastle, effective immediately. He said his resignation was due to ongoing controversy over his appearance before the Independent Commission Against Corruption, which he said “may effect [sic] the proper functioning” of Newcastle City Council.[8]

In 2015, McCloy’s attempts to overturn part of a New South Wales Act of Parliament, enacted to prevent developers from making political donations, were rejected by the High Court of Australia.[9] The case was significant in Australian constitutional law, as it clarified the extent to which the Constitution of Australia provides an implied freedom of political communication, and expanded on the proportionality test developed in Lange v Australian Broadcasting Corporation.[10][11]


Corruption findings by Independent Commission Against Corruption

In 2016, The NSW Independent Commission Against Corruption released a report[12] on their investigation codenamed Operation Spicer. Operation Spicer was an ‘Investigation into NSW Liberal Party Electoral Funding for the 2011 State Election Campaign and Other Matters’.

In 2011, Jeff McCloy, as a property developer, was a banned donor to parties and candidates in state elections as state governments have jurisdiction over land appropriations etc. in Australia. McCloy not only made political donations, he made so many large cash payments to Members of Parliament that he referred to himself in the Independent Commission Against Corruption hearings as a ‘Walking ATM’.[13]

The NSW Independent Commission Against Corruption sought to prove that Jeff McCloy intentionally made covert payments to state government election candidates and that McCloy was aware that his donations were illegal because of his ‘developer’ status.

It was reported by the Sydney Morning Herald[14] that Cardiff vet Andrew Cornwell was in the middle of an operation on a dog when he was summoned outside by McCloy. McCloy handed Cornwell $10,000 in cash, cash that was later used to fund Cornwell’s state parliament election campaign.

On 30 August 2016, the Newcastle Herald reported that MCloy called Independent Commission Against Corruption ‘A $20m waste of time’. 47% of Fairfax’s online respondents agreed with McCloy’s view. McCloy described the factual findings against him as ‘a parking fine, a speeding fine’.[15]

Correlation between the corruption findings and McCloy Group developments

Listed in the ‘Principal Factual Findings[16] made by the NSW Independent Commission Against Corruption in regards to Operation Spicer are the below references to Jeff McCloy.

Finding Reference Group 1: Regarding The Seat of Port Stephens

Quote page 22 of the commission’s report: “In 2007, Craig Baumann, the NSW Liberal Party candidate for the seat of Port Stephens, entered into an arrangement with Mr McCloy and Mr (Hilton) Grugeon to disguise from the Election Funding Authority the fact that companies associated with Mr McCloy and Mr Grugeon had donated $79,684 towards Mr Baumann’s 2007 NSW election campaign.”

Finding Reference Group 1 Correlation with Development: Craig Baumann held the seat of Port Stephens in the NSW Parliament from 2007 to 2015. McCloy Group has developments within the Port Stephens state seat areas including The Bower (Medowie, NSW) and Potter’s Lane (Raymond Terrace, NSW)

Finding Reference Group 2: Regarding The State Seat of Newcastle

Quote page 20 of the commission’s report: “In about February 2011, Jeffrey McCloy gave Hugh Thomson $10,000 in cash as a political donation to fund Mr Owen’s 2011 election campaign for the seat of Newcastle with the intention of evading the Election Funding Act laws relating to the ban on the making of political donations by property developers and the applicable cap on political donations.

Quote page 21 of the commission’s report: “Mr (Mike) Gallacher was responsible for proposing to Mr McCloy and Mr (Hilton) Grugeon an arrangement whereby each of them would contribute to the payment of Luke Grant for his work on Mr Owen’s 2011 election campaign. He did so with the intention that the Election Funding Act laws in relation to the prohibition on political donations from property developers and the requirements for the disclosure of political donations to the Election Funding Authority would be evaded…”

Quote page 21 of the commission’s report: Mr Owen, Mr Thompson, Mr Grugeon and Mr McCloy were parties to an arrangement whereby payments totalling $19,875 made to Mr Grant for his work on Mr Owen’s 2011 election campaign were falsely attributed to services allegedly provided to companies operated by Mr McCloy and Mr Grugeon.

Finding Reference Group 2 Correlation with Development: Part a

Jeff McCloy and McCloy Group has ongoing commercial development concerns within the Newcastle State seat locality, including ‘City Exchange’ and ‘Telstra Civic’. Both sites will benefit significantly from the highly controversial Newcastle Transport Interchange and Light Rail due for completion in 2019, a major infrastructure project implemented by the NSW Liberal state government.

Finding Reference Group 2 Correlation with Development: Part b

McCloy Group’s ‘City Exchange’ is tenanted by a gym owned by Wests Group. Wests Group are a not-for-profit gambling entity that, according to its 2017 Annual Report[17]‘, made $143m in revenue in the year ending January 2017. As a group whose business interests are primarily involved in gambling, Wests Group are an illegal donor to political candidates in NSW, and as Lord Mayor of Newcastle and proprietor of McCloy group, incomes from Wests Group to Jeff McCloy or McCloy Group are considered indirect political donations.

Other Hunter Street property concerns

Relative to the highly controversial Newcastle Interchange, McCloy bought the Blackwoods property at Hannell St, Wickham in December 2006, the former Hunter Water headquarters at 591 Hunter Street in October 2007 (since subdivided, with the 591-address property sold and the 593-601 address retaining its heritage exterior), and a half shareholding of 356 Hunter Street in 2009.[18] 591 Hunter Street and 356 Hunter Street are multi-block buildings that are on the Light Rail route, planned for completion in 2019.

The Newcastle Herald reported that in late 2007, McCloy bought the former Toymasters building at 615 Hunter Street, which was sold by McCloy in 2009.[18]

As of December 2017, 615 Hunter Street is tenanted by the NSW Department of Family and Community Services. The address 615 Hunter Street Newcastle West is on the Light Rail route.

Also in late 2007, McCloy bought ‘the former Churchills building’ at 633 Hunter Street Newcastle West, which he sold in February 2015.[18][19] In 2008, McCloy bought The Lucky Country Hotel, now known as The Lucky, which was one of only two of his Hunter Street purchases that saw development under his tenure.

Over a ten year spending spree which included Hunter Street properties plus other holdings (a commercial property in Brown Street, a stately ‘town’ home in Church Street and Bolton Street’s ‘Legacy House’ (now demolished and replaced with apartments) McCloy claims to have suffered $15.7 million in losses.[20]


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  8. Jump up^Nicholls, Sean; Gordon, Jason (2014-08-17). “Newcastle mayor Jeff McCloy quits before being pushed”. Sydney Morning Herald. Retrieved 2014-08-18.
  9. Jump up^“Former lord mayor Jeff McCloy loses High Court bid to overturn developer donation ban”. ABC News. 2015-10-07. Retrieved 2016-06-12.
  10. Jump up^“McCloy v New South Wales [2015] HCA 34”. High Court of Australia. 2015-10-07. Retrieved 2016-06-12.
  11. Jump up^Twomey, Anne (2015-10-13). “Proportionality and the Constitution: Prof Anne Twomey”. Australian Law Reform Commission. Retrieved 2016-06-12.
  12. Jump up^“ICAC Report August 2016: Investigation into NSW Liberal Party Electoral Funding for the 2011 State Election Campaign and Other Matters”. August 2016. Retrieved 2017-12-28.
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  14. Jump up^“SMH ‘Corridors of Corruption'”. The Sydney Morning Herald. 2014-08-16. Retrieved 2017-12-28.
  15. Jump up^“ICAC a $20m waste of time – McCloy”. The Newcastle Herald. 2016-08-30. Retrieved 2017-12-28.
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  17. Jump up^“Wests Group Annual Report Jan 2017” (PDF). Retrieved 2017-12-28.
  18. Jump up to:ab c “McCloy lays property interests on the table”. The Newcastle Herald. 2015-03-06. Retrieved 2017-12-28.
  19. Jump up^“McCloy lays property interests on the table”. The Newcastle Herald. 6 March 2015. Retrieved 2017-12-28.
  20. Jump up^Kirkwood, Ian. “McCloy lays property interests on the table”. The Newcastle Herald. Retrieved 2017-12-28.
Civic offices
Preceded by
John Stuart Tate
Lord Mayor of Newcastle
Succeeded by
Nuatali Nelmes



  • This page was last edited on 12 July 2018, at 20:15 (UTC).







ICAC: Newcastle lord mayor Jeff McCloy quits

ICAC: Newcastle lord mayor Jeff McCloy quits, photos


ICAC: Newcastle lord mayor Jeff McCloy quits

17 Aug 2014

Jeff McCloy: His time as lord mayor

THE Hunter’s political landscape has taken another dramatic turn with Newcastle lord mayor Jeff McCloy resigning.

The lord mayor sent an official letter of resignation to Newcastle council general manager Ken Gouldthorp on Sunday after a week of intense pressure produced by the state corruption inquiry.

His resignation follows that of state Liberal MPs Tim Owen and Andrew Cornwell, and a move to the crossbenches by Swansea MP Garry Edwards over donations made to their 2011 election campaigns by the millionaire developer. 

Jeff McCloy: His time as lord mayor

ICAC: August 2014 archive Operation Spicer

THE Hunter’s political landscape has taken another dramatic turn with Newcastle lord mayor Jeff McCloy resigning.

The lord mayor sent an official letter of resignation to Newcastle council general manager Ken Gouldthorp on Sunday after a week of intense pressure produced by the state corruption inquiry.

His resignation follows that of state Liberal MPs Tim Owen and Andrew Cornwell, and a move to the crossbenches by Swansea MP Garry Edwards over donations made to their 2011 election campaigns by the millionaire developer.

The Newcastle Herald can reveal that Mr McCloy has decided not to step aside from his role, but resign entirely, effective immediately, meaning the city’s residents will now be heading to the polls three times in the next seven months.

In his letter of resignation, Mr McCloy said the controversy surrounding donations he made to the 2011 election campaign ‘‘may  affect the proper functioning’’ of the council.

‘‘I believe that I am leaving the city in much better shape financially and physically than it was when I started,’’ he said.

‘‘I would like to personally thank the general manager and staff of Newcastle City Council and the thousands of Novocastrians who supported change in our city.

‘‘It has been a privilege serving the people of Newcastle, but now I will leave this to others.

‘‘I encourage the elected council to continue focusing on local issues of significance for the Newcastle community and the progression of our city,’’ he said.

Are you disappointed there will not be Liberal candidates in the upcoming state byelections? (Poll Closed)

Yes 55.25%

No 44.75%

The move means that the city’s deputy lord mayor, Liberal Brad Luke, will take over the mayoral reins until a byelection is held.

The Local Government Act requires that a fresh lord mayoral election be held because the position has been vacated more than 18months out from the next scheduled council election. Local Government Minister Paul Toole will be required to stage the election within three months.

Mr  McCloy’s move also follows news on Friday that Minister Toole was seeking legal avenues to remove the lord mayor after he admitted breaking political donations laws when he appeared before the Independent Commission Against Corruption on Thursday.

Then, Mr McCloy admitted to donating $9975 to the campaign of Newcastle Liberal Tim Owen, and $10,000 in cash to Charlestown Liberal Andrew Cornwell.

He also admitted to taking ‘‘about $1500’’ from his wallet and giving it to then-Liberal candidate for Swansea Garry Edwards, and writing a further cheque for $10,000 which was allegedly used to pay the wages of Liberal staffers running the Newcastle campaign.

Premier Mike Baird had also called on Mr McCloy to ‘‘do the honourable thing and resign’’ or face being removed from office by the beginning of next month.

General manager Ken Gouldthorp released a statement on Monday confirming it would be business as usual but the city would miss Mr McCloy’s leadership.

“Our focus remains on supporting the local community with the full range of council services,” he said.

Mr McCloy spent Sunday with his family and said he would not be making any further comment because the corruption inquiry was still proceeding, and he wanted the council to be spared from any more political turmoil.

Mr McCloy is due to travel overseas tomorrow on a long-planned two-week  family holiday.

The Herald understands that Mr McCloy will continue with a High Court bid to overturn the laws which prevent him being a political donor.


The controversy surrounding donations I made in the lead-up to the 2011 NSW elections may affect the proper functioning of Newcastle City Council.

I, therefore, tender my resignation as lord mayor of Newcastle, effective immediately.

I believe that I am leaving the city in much better shape financially and physically than it was when I started.

I would like to personally thank the general manager and staff of Newcastle City Council and the thousands of Novocastrians who supported change in our city.

It has been a privilege serving the people of Newcastle, but now I will leave this to others.

I encourage the elected council to continue focusing on local issues of significance for the Newcastle community and the progression of the city.

Yours Sincerely

Jeff McCloy







NICK KALDAS returns to audit corruption risks in NSW planning system …


CAAN has more material to add to the “Corruption” Category!

You may wish to also view these categories in our Website:

-Compulsory Acquisition and Land Amalgamation

-Value Capture

-Developers Buy Access in NSW


Nick Kaldas returns to audit corruption risks in NSW planning system

The former deputy commissioner of the NSW Police, Nick Kaldas, will conduct an audit into corruption risks in the state’s planning system, following a string of high-profile scandals.

Planning Minister Anthony Roberts has handed Mr Kaldas a broad brief to scrutinise risks in the system and “make recommendations in relation to the decision-making governance” of state and local agencies.

The appointment of Mr Kaldas, who is to report at the end of November, comes on the back of the Independent Commission Against Corruption’s inquiry into the conduct of councillors and senior staff at the former Canterbury Council.

“This is about building a planning system that people can have faith and confidence in,” Mr Roberts said.

“We want to be held up around the world, that if you want a robust, strong and transparent planning system, have a look at NSW,” he said.


The terms of the review to be conducted by Mr Kaldas, who has also served as the Director of Internal Oversight at the United Nations Relief and Works Agency in the Middle East, require him to assess whether there are government issues that “risk the integrity of the system”. He is also charged with examining whether there are aspects of interstate or overseas systems that could be incorporated in NSW.


Mr Kaldas’ review is the latest in a number of anti-corruption measures adopted by the state government. One policy, championed by Mr Roberts, has been to strip councils of the ability to decide on development applications.

That function has been vested in mandatory Local Planning Panels, which enforce planning controls adopted by councillors.

One of the issues at the former Canterbury Council was that though the council used a local panel, known as an Independent Hearing and Assessment Panel, that body was empowered only to make recommendations.

On occasions, councillors voted to approve developments against the recommendation of the council’s IHAP. The corruption inquiry is addressing whether Liberal councillor Michael Hawatt and Labor’s Pierre Azzi had financial stakes in the developments on which they were voting.

The Canterbury inquiry, known as Operation Dasha, also claimed the political career of parliamentary secretary Daryl Maguire, who was caught on tape with Mr Hawatt attempting to secure commissions in property transactions for large “clients”.

'Crystal clear' message Wagga MP must go: Constance


‘Crystal clear’ message Wagga MP must go: Constance

View Source for video links


Daryl Maguire quit the Liberal party after it was revealed at ICAC that he had tried broker deals for a “mega big” client with a former Canterbury councillor.

But Canterbury is not the only council to have been embroiled in corruption scandals. A string of decisions at Auburn council prompted an inquiry under the Local Government Act, which concluded that multiple planning decisions lacked merit.

ICAC also this year submitted briefs of evidence against senior staff at the former Botany Council.

Mr Roberts said another anti-corruption measure would be securing updated local environment plans to determine the shape of development in local areas.

“The best way to prevent corrupt rezoning is to have strong local strategic plans,” Mr Roberts said. The government has promised councils $2.5 million to update their LEPs.

Planning Minister Anthony Roberts says he wants to make sure that the planning system is proofed against organised crime.
Planning Minister Anthony Roberts says he wants to make sure that the planning system is proofed against organised crime.Photo: AAP

If LEPs were updated, councillors would be under pressure to explain deviations from those plans.

Mr Roberts said NSW already had a strong planning system but this latest audit was about “strengthening it even further”.

“We want to make sure that the planning system is proofed against organised crime and that’s why having Kaldas in will further ensure we are that exemplary,” the Minister said.

“This is the legacy that I want to leave and this government wants to leave,” Mr Roberts said.

Mr Kaldas is also to hand a draft report to the Planning Secretary by the end of September.







‘My client is mega big’: ICAC plays secret recording of Lib MP

‘My client is mega big’: ICAC plays secret recording of Lib MP  


More about “Country Garden”  …

COUNTRY GARDEN’s Yang Huiyan is one of China’s richest people with a net worth of $7 billion … perhaps this explains why the community rights of Constituents of the NSW Ryde and Lane Cove Electorates were overridden …

Is this to be repeated in Canterbury, Parramatta, Camellia … Wagga Wagga?

VIEW CAAN Photo Album for the negative impact on the district established community.

Her wealth and influence appear to have been at a huge cost to the North Ryde community with the:

-loss of land for further development of the Macquarie Park Business and IT Parks

-no bus interchange or parking for local residents at the North Ryde Station

-increased congestion; Epping Road, Delhi Road, and Pittwater Road

-loss of amenity for the village of North Ryde and surrounds

COUNTRY GARDEN is also making inroads into Melbourne

 ‘My client is mega big’: ICAC plays secret recording of Lib MP

Mr Maguire has been drawn into the Independent Commission Against Corruption’s inquiry into the former Canterbury Council through his links to former councillor Michael Hawatt.

VIEW Source link for audio.
'I've caused embarrassment': NSW MP before ICAC


‘I’ve caused embarrassment’: NSW MP before ICAC

Veteran NSW government MP Daryl Maguire admitted he sought a dividend from the sale of a multimillion dollar Sydney property from Chinese developers.

Mr Maguire called Mr Hawatt on May 9, 2016, soon after both had returned from trips to China. The call was recorded by ICAC investigators.

“Joe and I have a couple of deals before a big developer,” Mr Maguire told Mr Hawatt. “A couple of ones we want to kick on.”

Mr Maguire, the parliamentary secretary for the Centenary of Anzac, counter-terrorism, corrections and veterans, asked for anything that was DA, or development application, approved.

“What I want … I just don’t want to f— around,” he told Mr Hawatt. “Have you got plans? Have you got the whole thing already done?

“My client is mega big, OK.

“If he’s interested my client is mega big and has got mega money and wants two or three DA approved projects right now. Today.”

The conversation then turned to the commission that Mr Hawatt, who is under investigation for dishonestly exercising his functions as a councillor, might receive.

“If he’s going to give you 1.5 per cent that’s not enough,” Mr Maguire told Mr Hawatt.

“1.5 per cent isn’t enough divided by two if you know what I’m talking about.”

The Independent Commission Against Corruption has aired a phone conversation between Wagga Wagga MP Daryl Maguire and former Canterbury councillor Michael Hawatt.

He went on the say that 3 per cent commission was better.

After the recording was played, Mr Maguire was asked if he could explain what he was talking about in saying that 1.5 per cent divided by two was not good enough.

Mr Maguire said it appeared an interested person would have to share in a dividend.

“Who was the interested person?” Mr Maguire was asked by counsel assisting the commission, David Buchanan, SC.

Sydney developer Charbel Demian on Thursday.
Sydney developer Charbel Demian on Thursday.Photo: Janie Barrett

“Well I suspect it was me,” Mr Maguire said.

Mr Maguire had earlier told the commission he had known Mr Hawatt since about 2008, when Mr Hawatt ran as the Liberal candidate for Lakemba.

Mr Maguire said he had approached Mr Hawatt about potential property opportunities for friends of his in the Chinese community. In particular, he was seeking opportunities for the Australian branch of the Chinese firm Country Garden. But he said he did not have an interest himself in making money.

Daryl Maguire, left, with Charbel Demian, (second from left with back to camera), an unknown male referred to as Ron (white shirt) and Michael Hawatt (right, back to camera) at a Sydney café.
Daryl Maguire, left, with Charbel Demian, (second from left with back to camera), an unknown male referred to as Ron (white shirt) and Michael Hawatt (right, back to camera) at a Sydney café.Photo: ICAC

“The approach wasn’t for me to do business, it was for others,” Mr Maguire told Mr Buchanan. Mr Maguire said that at the “back of his mind” was the idea that, if Country Garden could establish itself in Australia, it might look to develop in Wagga Wagga.

The ICAC heard on Thursday that Sydney developer Charbel Demian went on to meet Mr Maguire on multiple occasions. On one occasion, ICAC investigators photographed them with Mr Hawatt.

Liberal MP for Wagga Wagga Daryl Maguire outside ICAC.
Liberal MP for Wagga Wagga Daryl Maguire outside ICAC.Photo: Janie Barrett

On Thursday, Mr Demian told the ICAC he had met Mr Maguire through Mr Hawatt’s introduction. Mr Demian provided Mr Maguire a list of his potential development sites, including properties at Parramatta, Canterbury and Camellia.

Mr Maguire’s evidence before Commissioner Patricia McDonald, SC, has not concluded.

More to come

SOURCE … view also for audio:




‘Just got a call from MP friend’: inquiry hears of Wagga MP’s Sydney property interest

How many more NSW MPs are involved?

NSW Planning Minister Roberts met with 53 developer groups between January and September 2017 … and not a single resident …

Why? Cough … cough …

Read more:

Greens want donation reform after a look at minister’s diary


Daryl Maguire.


‘Just got a call from MP friend’: inquiry hears of Wagga MP’s Sydney property interest

The state Liberal MP for Wagga Wagga, Daryl Maguire, held multiple meetings with a Sydney property developer while facilitating the interests of potential Chinese investors, the developer told a corruption hearing on Thursday.

Contact between the developer, Charbel Demian, who is also known as Charlie, and Mr Maguire was organised by former Canterbury Liberal councillor Michael Hawatt, who is being investigated for dishonestly or partially exercising his public functions.

Daryl Maguire.
Daryl Maguire.Photo: Janie Barrett

“Just got a call from an MP friend of mine who is well connected in China,” Mr Hawatt texted Mr Demian in May 2016, according to evidence presented to the Independent Commission Against Corruption on Thursday.

The text continued: “He has a mega rich company who are seriously looking to buy 30 DA sites…. I told him about your sites including Canterbury Road. I said 160 plus per site. He is keen to talk about this and any other site you want to sell. They are keen, ready and cashed up.”

Mr Demian, who told ICAC the MP referred to was Mr Maguire, went on to have multiple meetings and contacts with Mr Hawatt and Mr Maguire.

A photograph of one of the meetings at a CBD café was tendered at the ICAC on Thursday. The meeting was attended by Mr Hawatt, Mr Maguire, Mr Demian, as well as an unnamed representative of Country Garden, a Chinese-owned development company.

Charbel Demian.
Charbel Demian.Photo: Janie Barrett

Mr Demian said that he had been led to believe that “there are a number of entities in China that have business conferences with the state government agencies or MPs and obviously they get introduced to other Australian businesses for business transactions”.

Mr Demian provided a list of potential development sites to Mr Hawatt, who in turn passed them on to Mr Maguire. The list included thousands of potential dwellings in places such as Canterbury Road, but also at Parramatta, Camellia and Waitara.

The focus of the inquiry is on whether Mr Hawatt, as well as former Labor councillor Pierre Azzi, former general manager Jim Montague, and former director of planning Spiro Stavis, dishonestly exercised their functions at the former Canterbury Council.

Companies controlled by Mr Demian benefitted from planning decisions undertaken by Mr Stavis. The inquiry has heard evidence this week of the close relationship between Mr Demian, and the former councillors and council staff.

However Mr Demian would not expand on why Mr Hawatt spent time and energy on attempting to introduce him to potential buyers of his sites – either through contact with Mr Maguire, or others.

Michael Hawatt.
Michael Hawatt.Photo: Brendan Esposito

The developer said he never had an agency or other agreement with Mr Hawatt. He also rejected the suggestion of counsel assisting the commission, David Buchanan SC, that his relationship with Mr Hawatt was so close that Mr Hawatt had an interest in Mr Demian making money.

“I say that is false and fabricated,” Mr Demian said.

Mr Demian rejected the suggestion of Arthur Moses SC, for the amalgamated City of Canterbury Bankstown, that he was stringing Mr Hawatt along because he had outstanding development applications before the council.

The developer said he did not ever have discussions about paying commissions to either Mr Maguire or Mr Hawatt. “Absolutely not,” he said.

Mr Maguire is due to give evidence before ICAC Commissioner Patricia McDonald SC on Friday.







CHINA obviously plans well …. it seems not so inscrutable now they have the Aussie game sewn up … with Turnbull guvmnt policies all skewed their way.


HAROLD MITCHELL sat down with a Chinese property developer who said he is looking for a place in Australia to build a village for elderly Chinese to take a break from time to time.

The village he built on the outskirts of Beijing houses 800,000 …

WHAT will this mean if he is to succeed? Further loss of farmlands, or urban bushlands, and habitat for another overdevelopment where we live?  Chinese healthcare companies now own many of our nursing homes and retirement villages … recall the Four Corners programme on “Aveo” …

Currently we are running out of cemetery space! How secure is our MEDICARE CARD?




China is better than us at an age-old problem

Today finds me in a very hot and steamy Beijing where the temperature has reached 32 degrees, with smog threatening. But this city seems to have brushed it off. It’s an exciting place to be.

Last night saw a brilliant performance by the Melbourne Symphony Orchestra to a very grateful and respectful audience as Sir Andrew Davis, one of the top 10 conductors in the world, took the orchestra through the works of Vine, Bruch and Tchaikovsky. The audience enthusiastically demanded two encores before we all went on to a grand reception. This country really knows how to entertain people.

China has 16 per cent of its population aged over 60 compared with Australia’s 21 per cent.
China has 16 per cent of its population aged over 60 compared with Australia’s 21 per cent.Photo: Supplied

Business is banqueting, and banqueting is business in China. Tonight’s banquet, I’m told will be no less than eight courses starting at 6pm and finishing at 7pm. Charlie’s quick mind works out that’s a course every seven minutes. I dare not ask for the vegetarian option for fear of having the same dish eight times over, as happened to a leading Australian educationist recently. I am also advised that there will be two speeches and six toasts of a fiery drink called Baijiu, the most consumed distilled spirit in the world.

This is a very organised place and as we arrived, the news broke that the Chinese government is planning to scrap control on families completely, having imposed the one child policy in 1979 and revised it in 2015 to allow a second child. Perhaps it is recognition that the modern Chinese woman cannot be controlled this way any more.

But it also reflects a concern about the future of the country’s demographic spread. The Chinese government has no expectation that the country’s fertility rate will reach replacement in the near future. China has 16 per cent of its population aged over 60 compared with Australia’s 21 per cent and it is set to continue to age dramatically just like Japan which now has 33 per cent of its people over 60. An ageing country is ultimately a shrinking country.

However, China is taking an approach to its older people that we could well learn from. I sat with a property developer who had built a village on the outskirts of Beijing, a city of 30 million people. This village has a population of 800,000, the majority of whom are about 100-years-old and he is looking for a place in Australia to build a village for around 20,000 so that his older people could take a break from time to time in our country.

I’m not sure that we in Australia are doing the best by our aged folk. Families are not the strength that they once were. Hugh Mackay, the great commentator and author, makes the point that one in two families are now breaking up with members often living miles apart across busy cities. Many families are scattered all over the country. We have a wonderful country but as Mackay says we’re a society that is overanxious, overweight, overmedicated and financially overstretched with a third likely to be affected by mental illness.

The Chinese are great planners. It’s nothing for them to have five, 10 or even 100-year visions and then apply the resources and energy to realise them. They also have a great sense of place and family. They can see the social and economic benefits of developing villages that we would call cities, which support the fabric of family life right through into old age.

Charlie and Louise are both travelling with me and remind me that the backyard with the bungalow where the aged uncle Jack spent his retiring years has all but disappeared.

“And so has the backyard,” laments Louise.

We need much more proactive policies to respond positively to our ageing population. We need to provide encouragement for people aged over 60 to continue working well beyond the traditional retirement age. This will require us to develop suitable roles and provide ongoing retraining. We also need to reduce ageism among employers. Some might argue that increasing net migration helps but it won’t because migrants age as well.

The other related challenge is suitable health care for those approaching the end of their life. As in all things, Australia’s provision of infrastructure lags behind the needs of a changing population.

This visit to Beijing makes me think China’s forward planning may well be better than ours. The Middle Kingdom has been a source of wisdom for many centuries, and the more time I spend in this country the more I realise that we have a great deal to learn from each other.

I’ll spend much of tomorrow looking further into the One Belt One Road initiative accompanied by another eight-course banquet I dare say.

“And I’m already looking for a bigger belt,” says Charlie.

“Before we hit the road,” quips Louise.





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THIS is a thorough report however, what escaped mention is that of the 100% sell off of Australian “new homes” to wealthy foreign buyers … perhaps that is the last nail in the coffin?

View for CAAN report on the 53 developer groups that met with the NSW Planning Minister from January to September 2017:

Australia’s Property Industry is Racked with Political Favouritism

by Andrew Heaton September 19th, 2017

If you wanted to strike it rich in property, one way would be to buy land on the outskirts of metropolitan areas, wait for it to be rezoned into residential use, and reap windfall gains by either selling to a developer or building on it yourself.

Ordinary mum and dad investors, however, stand little or no chance of doing this.

In a 2015 study, University of Queensland economists Cameron Murray and Paul Frijters looked at six selected areas in which decision making about rezoning was taken from local councils and assumed by the state’s Urban Land Development Authority.

The change in decision making authority took place over a six-year period spanning 2007 to 2012 under a program designed to boost housing supply and increase the speed and scale of residential development within those areas.

Murray and Frijters then used micro-level data from multiple sources to compare the relationship characteristics both inside and outside the ULDA areas and to compare outcomes for landowners who were considered to be well connected with those experienced by less well connected owners.

Their findings were revealing. ‘Corporate’ owners (i.e. property development companies) owned 75.3 per cent of the land which was rezoned but just 12.5 per cent of the land nearby outside of the rezoned areas.

Members of the Property Council of Australia and the Urban Development Institute of Australia owned almost 40 per cent and 23.5 per cent of the land within the rezoned areas respectively but owned just over one per cent of the land in the nearby surrounds.

Political donors owned 40 per cent of the land inside the rezoned areas but just 1.5 per cent of the land outside.

Hiring a professional lobbyist increased your chances of having your land rezoned by 37 per cent. Being part of a ‘connected’ network did likewise by 25 per cent. Of the $710 million worth of gains which Murray and Frijters calculated were derived from the uplift in values during these rezoning periods, around $410 million was captured by ‘connected’ landowners.

Well connected parties did not simply own land in the right areas. When they looked at areas which had been rezoned, Murray and Frijters found some strange shapes which could not be explained by rational decision making.

The above study underscored an ugly truth about how political decision making in Australia is influenced not just by public interest considerations but also the vested interests of powerful stakeholders. In the property sector, this includes the development industry itself but extends to other powerful groups such as existing home owners and residential property investors.

Less powerful groups such as renters, other would-be home owners and public housing tenants get a raw deal – as can broader public interest considerations. This extends beyond rezoning to policy areas which impact housing and rental affordability as well as public housing provision.

According to Murray and Frijters, this phenomenon affects more than just the property sector. In their recent book Game of Mates, the two economists argue that the idea of favouritism extends across many areas of the broader economy.

Nicolas Gruen, chief executive officer of economic consultancy and public policy advisory Lateral Economics, divides stakeholders into four categories: the development industry, existing property owners, those who would like to buy a home (renters or those living with parents) and the broader aesthetics of the built environment. The latter groups he said, often get a raw deal compared with the former.

As well as their lack of political influence, Gruen says part of the challenge for the latter groups arises from their interests being impacted not by single individual decisions but rather by the cumulative effect of a large number of individual decisions.

Interests of would-be home owners in terms of housing affordability, for example, are impacted not by an individual decision to approve or block any one development but rather by the overall impact of a large number of decisions which cumulatively effect available housing supply. As a result, he said, it becomes difficult for the public interest to inject itself into decision making mechanisms regarding individual projects notwithstanding the fact that these decisions will deliver an overall cumulative impact.

A particular area which Gruen says has not been well served is the aesthetic interest. Whereas many public buildings constructed from around the 1890s through to the 1920s and 30s had good character and were nice to look at, much of the new stock nowadays is bland. As a result, he says, cities such as Sydney and Melbourne in Australia and Paris overseas were beautiful places prior to the 1950s but are witnessing a considerable volume of new stock which is less aesthetically pleasing.

“The interests of both developers and locals are well represented and powerfully represented,” Gruen said.

“Local residents have been very successful at slowing densification and local development. That’s in their interests as they judge it but not in the interests of outsiders who might want to live in that area because it pushes up house prices. That represents a very large problem for us.

“Developers interests are well represented because there is a lot of money at stake and they make a large windfall from decisions about property – most particularly rezoning. That goes into all kinds of activities – legal and legitimate or otherwise and borderline.

“But through all that, the interests of the community get short shrift.”

According to Murray, the most affected area is land rezoning. Indeed, he talks of an industry which can be divided into two sides.

First, he says there is the ‘construction’ side of the industry which builds homes adds to housing supply.

Second, he talks of a ‘property development’ side. In this side of the industry, Murray says developers make large amounts of money by buying up agricultural or industrial land and then working their connections to have the land rezoned for residential use. This, he says, sees the value of land holdings multiply by several times and is where much of the money is made.

Once land has been rezoned, Murray says developers further lobby to have taxpayers fork out billions of dollars to put in roads, rail lines and utilities – a process which further inflates the value of developer holdings yet is paid for by taxpayers.

He talks of an industry mired in potentially illegal corruption but more so ‘grey’ corruption. This, he says, is where developers use legal means (such as employing lobbyists) to gain a decision-making outcome which is more favourable to them than would be the case with an ordinary outcome in which decisions were influenced solely by public interest.

“A lot of the time, it’s about buying land such as a farm or an industrial building, paying the value of the land for that use and then lobbying either the council or the state government to change what you can do on that land to then be able to build, for example, a high-rise apartment building on that industrial site,” Murray said.

“What you are getting is a different property right than what you paid for. You paid the seller the right to run an industrial warehouse. What you are getting when you make that rezoning application, is that you are surrendering one property right and getting one which is worth a whole lot more to build a high-rise building or whatever you propose. You paid the previous seller for one right at one price and you make an application and the government grants it on behalf of everybody – the right to use it for something which is worth a whole lot more.

“This is the whole industry. This is how the big developers make money.”

A means by which this happens, Murray said, involves a revolving door in terms of employment between the public sector and private sector developers. He says many employed in state or local government planning roles have either previously worked for private developers or have gone on to do so after leaving public office – a process he says enables implicit favours given to private developers whilst the person was in public office to be repaid.

Professor Peter Phibbs, a planner and social economist at Sydney University, says the degree of vested interest influence over land rezoning was borne out by the Murray and Frijters.

Phibbs agrees about the revolving door. In New South Wales, he says, the number of those who go from working within the planning department or from being on planning panels to subsequently working for private sector developers is concerning. He is aware of one case where a person was serving on a planning panel one month and the following month after leaving was engaged as a consultant to a developer who was trying to get a decision through that panel. Whilst emphasising that he was not suggesting wrongdoing, Phibbs says such situations reinforce negative perceptions amongst the public.

“If you look at New South Wales, a number of people have rolled out of the Department of Planning and ended up working for private companies and developers,” Phibbs said. “I don’t think that’s a great look.

“I think if you are a member of the public and one month you go there and a person is sitting on a panel and next month they are arguing the case for the developer for a planning proposal, it’s not a good look.”

At a broader level, Phibbs says many feel there is an imbalance of access to decision makers. Such fears are not unfounded. A scan of appointments in the diary of NSW Planning Minister Anthony Roberts over three months from April to June this year, for example, shows that around half of his meetings about policy which were not with other ministers or MPs were in fact with private companies or industry lobby groups. Whilst again there is no suggestion of wrongdoing, this does suggest that influential stakeholders enjoy access to ministers at a level beyond that enjoyed by ordinary members of the public.

Beyond land rezoning and infrastructure, favouritism also impacts decisions housing and rental affordability decisions.

Assuming you hold income levels and monetary policy settings constant, there are effectively two ways in which housing can be made more affordable.

First, you could encourage greater volumes of new housing at lower pricing points. This could be achieved by opening up new greenfield areas, delivering more housing in regional cities or by encouraging units and flats rather than detached houses.

Beyond that, housing can only be made more affordable by making houses cheaper – reducing the value of property or at least limiting the pace at which it is increasing. This might be welcomed by the 30.9 per cent of Australians whom the ABS says currently rent their homes or by others who want to enter the market but would be opposed by two more powerful groups.

First, the cashed-up development lobby has no interest in housing being cheaper as this would mean their stock would sell for less. Moreover, there are existing home owners for whom reduced home values would lead to a lower base of net wealth. Comprising almost two-thirds of all Australians, this voter cohort outnumbers renters and those wanting to enter the market by more than two to one. Compared with their renting counterparts, owners are also typically wealthier and more politically active.

The upshot, Murray says, is that politicians might want to make housing more affordable but will not do anything to make housing cheaper.

In this environment, Phibbs says, politicians make noises about affordability but have done little other than first-home-buyer handouts – a phenomenon he says will change as renters grow in number and existing home owners increasingly see their children locked out of the market.

In rental affordability, as well, Murray points out that the needs of tenants for affordable (and thus cheaper) rents butts up against those of the wealthier and more politically active cohort of investors who want to maximise the return they derive from their investment.

Not only is the power of existing home owners and investors a factor in politicians not wanting to make housing cheaper, it is also a direct factor in decisions regarding tax concessions and planning.

On tax concessions, the Coalition at least does not wish to remove these for fear of backlash among a significant part of their voter base.

On planning, development within urban infill areas and especially in established middle suburbs often encounters fierce resistance from local property owners irrespective of the broader need for greater housing supply in these areas.

Again, the wealthy and politically active are favoured.

When new residential zones were introduced throughout Victoria in 2013, local councils in wealthy Melbourne municipalities such as Bayside, Glen Eira and Boroondara rushed to apply the most restrictive of the zones to three quarters of their municipalities despite their municipalities being well serviced by transport links, cultural and education facilities and having close proximity to employment opportunities.
Finally, there are the least powerful stakeholders: social housing tenants. Over the five years to June 2017, the number of public sector houses approved for construction throughout Australia came in at just 17,012 – the lowest rate of building for several decades and less than half of the 38,448 public houses approved over the same period 20 years earlier. This is happening as around 200,000 sit on social housing waiting lists (AIHW statistics, June 2016).

The quality of that housing is not great. In a recent survey conducted by the Australian Institute of Health and Welfare, half of all public housing tenants reported at least one structural problem such as major cracks or rising damp with their dwelling. One in six dwellings had three or more serious structural problems.

These people are too few in number and too politically inactive for their voice to be heard. Numbering around 817,300 (excluding those on waiting lists), social housing tenants comprise less than four per cent of the population. Moreover, with this cohort being seen as largely ‘Safe Labour’ voters, neither major party expends much energy in battling over their vote.

Because of this, Murray says there is ‘no political appetite whatsoever’ for public housing investment.

Murray says the consequences of all this are serious. In regard to the land rezoning and infrastructure provision, he says taxpayers are handing billions of dollars’ worth of gains each year to private developers.

Due to influence associated with political favouritism, these decisions are not necessarily reflecting the best interests of society.

Spending billions in taxpayer money to put railways out to some wasteland where influential developers have land holdings is wasteful, he said.

Finally, favouritism of toward existing home owners and the consequential failure to address housing affordability is leading to a significant social divide.

He says action is needed across several areas. First, he would like to see the removal of tax concessions for residential property investment.

More social housing should also be constructed, and this should be done according to a needs-based system.
Rights of long-term renters should also be improved along the lines of models adopted in some European countries which limit the ability of landlords to increase rents.

Beyond that, he would like to see action to reduce the opportunity and incentive for favouritism and corruption to occur.
To address the ‘revolving door’, he would like restrictions upon the ability of those who work in public sector planning roles to accept private sector work in the development industry for a set time after they leave public office.

Moreover, to reduce the overall incentive for grey corruption to occur, he would like to see the implementation of value capture measures. In particular, he would other states and territories to follow the current system in the ACT, whereby landowners who apply to have their land rezoned pay an upfront charge equal to 75 per cent of the assessed uplift in land values which occur from the rezoning.

Under that system, the gains associated with the revaluation are split 75/25 between taxpayers and the developer. Merely doing across all other states and territories, he says could raise $11 billion per year for taxpayers.

Likewise, additional value capture mechanisms such as taxes on the unimproved value of land would enable taxpayers to automatically capture back part of the uplift in land values which occurs as a result of public sector infrastructure investments.

He says the best way to tackle corruption of any kind – legal or otherwise – is to reduce the size of the value which can be gained from such activities.

Phibbs agrees that restrictions on the ability of those involved in public sector planning decisions to work for private developers for a period after leaving public office are needed.

To improve transparency, meanwhile, he would like every rezoning decision to be made public along with an assessment of the uplift in land value associated with that decision and contact details of those involved with the decision.

This, he argues, would make gains associated with land rezoning more transparent and would make those involved in decision making more accountable.

Gruen agrees that capturing back the value of any gain is essential. He says a betterment tax like that first proposed in the 1890s by American Economist Henry Gorge under which tax is levied on increases in the unimproved capital value of the land would be one of the few taxes which did not harm economic efficiency and was fair.

Australia relies on its politicians and public-sector staff to act in the public’s best interest at all times.

Despite the best efforts of many, it seems that decision making is largely impacted by the vested interests of powerful stakeholders.

by Andrew Heaton