Problems for NSW Liberals

A corruption scandal threatens to engulf the O'Farrell government next year as it prepares to seek a second term in office after energy and resources minister Chris Hartcher resigned from cabinet following raids by investigators.

Mr Hartcher, who remains the MP for Terrigal, announced his resignation on Wednesday only weeks after the offices of his fellow central coast Liberal MPs Chris Spence and Darren Webber were raided by officers from the Independent Commission Against Corruption.

ICAC is believed to be investigating whether political donations were secretly funnelled through a front company for the benefit of the three MPs before the 2011 state election.

Last year Fairfax Media revealed the suspension of two of Mr Hartcher's staff - senior electorate officer Ray Carter and policy adviser Tim Koelma - after the Liberal Party referred allegations they had breached donations laws to the Election Funding Authority.

Mr Koelma resigned from Mr Hartcher's office shortly afterwards, while Mr Carter remains suspended on full pay more than a year later.

It was subsequently revealed a $5000 payment to a company owned by Mr Koelma, Eightbyfive, from Wyong builder Matthew Lusted, sparked the referral by the Liberal Party. Mr Lusted was a preselection candidate for the federal seat

of Dobell on the central coast. Fairfax Media has since been told Mr Lusted was approached for the payment by Mr Carter shortly before the March 2011 state election.

It is understood Mr Lusted's name and others were given to Mr Carter by Wyong mayor Doug Eaton. Mr Eaton has previously refused to comment due to ICAC secrecy provisions.

Property developers have been prohibited from donating to candidates in NSW elections since 2009.

The new Liberal MP for Dobell, Karen McNamara, has also been drawn into the scandal over questions surrounding her fundraising for Mr Webber's election campaign. During her preselection interview for Dobell, Ms McNamara claimed to have raised as much as $100,000 for Mr Webber's campaign.

But this was questioned at the time by Liberal state executive member Hollie Hughes, who had confirmed that official party receipts were far lower.

The discrepancy is believed to have prompted the Liberal Party to examine donations to Mr Webber and Mr Spence and later refer allegations about Mr Carter and Mr Koelma to election funding authorities.

Ms McNamara's husband, John McNamara, was a Wyong Liberal councillor between 2008 and last year. Ms McNamara has previously said she had complied with her obligations as Mr Webber's campaign manager "to the best of my knowledge" and would assist with any inquiries.

The investigation by the Election Funding Authority was referred to ICAC earlier this year. ICAC is believed to be preparing to hold public hearings into the central coast donations matter next year, complicating the Coalition government's preparations for its campaign to seek re-election in 2015.

In a statement, Mr Hartcher said he had resigned following "the issue of a search warrant by the ICAC against me" but that he was "confident I will be cleared of any wrongdoing".

"This is the first contact I have had with the ICAC and given that their investigations have thus far had an unknown timeframe, it is appropriate that I resign," he said.

Premier Barry O'Farrell said in a statement from India, where he is on a trade mission, that Mr Hartcher informed him of his decision on Wednesday. He thanked Mr Hartcher "for his services to the government and the state".

Mr Hartcher is the second casualty from the O'Farrell cabinet after Greg Pearce was sacked as finance minister over a perceived conflict of interest relating to a government board appointment.

Opposition leader John Robertson said the O'Farrell frontbench was "unravelling."

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Joe Hockey gets help from Greens over debt

Federal Treasurer Joe Hockey has mocked Labor’s response to a deal he struck with the Australian Greens to end the row of the debt ceiling, calling it "absolutely bizarre".

Mr Hockey on Wednesday reached the extraordinary last-minute deal with the Greens - once dubbed "economic fringe dwellers" by the government - to scrap Australia's $300 billion borrowing limit.

The rare Coalition-Greens alliance, designed to circumvent Labor's opposition, means the Treasurer will no longer have to seek parliamentary approval to lift the maximum borrowing cap.

The deal requires further debt reporting in the budget and its updates.

 Greens leader Christine Milne said the debt ceiling had been a "toxic political tool" that rendered the Australian debate around debt artificial.

The new agreement will allow for a "reasonable debate" to take place, she said.

But shadow treasurer Chris Bowen questioned how the new measures would improve the transparency over debt.

"More transparency is always welcome but the ultimate transparency is seeking parliamentary approval and having to answer questions," Mr Bowen told ABC radio.

To suggest that the new requirements would boost transparency "is a bit of a big call", he said.

He accused the Greens of an about-face on the debt issue, saying Senator Milne had originally opposed lifting the ceiling to $500 billion.

"She’s gone from saying that the increase wasn’t justified to ‘why do we have this debt limit at all’," Mr Bowen said.

Mr Hockey said that the reaction of Labor to the debt deal was "absolutely bizarre".

"It’s like a husband being upset that their ex-wife went off and had a cup of coffee with some other man," he said, in reference to the Greens support for the minority Gillard government.

Labor’s Kelvin Thomson joked that the Greens-Coalition alliance was "a bit more than a cup of coffee".

"I think it’s the candlelit dinner and flowers," he told reporters in Canberra on Thursday.

The Coalition, which railed against debt continually while in opposition, will have unrestricted access to credit, only having to issue a statement to both houses of Parliament every time it racks up another $50 billion in debt.

With just days to go before the existing legislated debt ceiling was reached on December 12, the Treasurer sealed the agreement late on Wednesday with Greens leader Christine Milne.

To do so, he has agreed to increased reporting requirements to Parliament on the nature of Commonwealth borrowings and the ongoing debt position of the government, but Parliament will have surrendered its capacity to veto government borrowings.

Mr Hockey praised the Greens for coming to the "sensible middle" on economic policy.

"The Labor Party is stuck in the basement on economic policy and all of their own making," Mr Hockey told Sky News.

Senator Milne was due to introduce the legislative repeal of the debt ceiling in the Senate on Wednesday evening with a view to the controversial bill being passed by the House of Representatives on Thursday.

The strange political marriage came after Coalition frustrations reached boiling point as Labor and the Greens used their combined numbers in the Senate to block an increase to a new limit of half a trillion dollars - a $200billion increase in one increment.

In a letter to Senator Milne on Wednesday, Mr Hockey wrote: "We have agreed to repeal the current legislative limit on the total face value of stock and securities on issue set out in the Commonwealth Inscribed Stock Act 1911."

Earlier in the day, Labor had sought to head off the deal which it knew would render its opposition to the proposed $200 billion debt increase irrelevant.

In response to a question from Opposition Leader Bill Shorten, Prime Minister Tony Abbott said he agreed that the Greens were on the economic margins.

"I agree, Madam Speaker, that the Greens have been economic fringe-dwellers, and that just means that [Labor] members opposite are worse," he said.

Labor brandished a photo of Senator Milne in the lower house to taunt the government, suggesting it was taking its orders from the minor party.

It was the second day in a row that her photo had been used after Immigration Minister Scott Morrison made the same case against Labor on Tuesday when it sided with the Greens to block temporary protection visas.

Under the arrangement, Mr Hockey has agreed to "comprehensive debt reporting" in the annual budget papers as well as in other regular economic statements and forecasts.

There will also be additional debt statements tabled in Parliament within three sitting days of a $50billion increase in debt, setting out the reasons, the extent of the debt incurred as a result of falling revenue, higher spending, capital purchases, or payments to states and territories.

Other transparency measures have been agreed to but the statements will not set out specific borrowing purposes in all cases, despite a Greens request for that level of detail.

Shadow finance minister Tony Burke was furious, and slammed the Coalition for breaching its intentions to reduce debt and its statements opposed to dealing with the Greens.

He said Mr Hockey "was no Peter Costello" and had even suffered the humiliation of not getting to announce the move, which had been announced first by Senator Milne.

"In one stroke today, they cut a deal with the Greens, to make Australia's debt allowed to be unlimited," he said.

"The level of hypocrisy today from the government is way beyond where I thought they would be."

Australian Industry Group chief executive Innes Willox strongly supported the removal of the debt ceiling, saying it was "good public policy".

He said the ceiling was an "artificial device" that imposes unnecessary inflexibility and creates unhelpful openings for political opportunism.

"It is vital that we have transparency of, and clear accountabilities for, public finances but the debt ceiling is a poor substitute for these and, at best, gives a false assurance that appropriate restraint is being exercised," he said in a statement.

The deal came at the end of a day in which a grim-faced Treasurer faced up to news he said showed the economy was "stuck in second gear".

The economy grew by just 0.6 per cent in the September quarter and grew 2.3 per cent over the year, well below the 3 per cent annual growth rate regarded as normal.

However Mr Hockey said the outlook was worse than the figures suggested.

So-called net exports accounted for 90 per cent of the growth over the past year.

They were unusually high because export volumes were climbing as imported machinery for mining collapsed.

"We have some challenges ahead as mining investment drops from around 8 per cent of gross domestic product to somewhere per cent over the next few years," Mr Hockey said.

That is going to create a growth hole in the economy.

On the positive side the exchange rate was coming down, interest rates were historically low and retail sales, consumer confidence and business confidence were lifting. But they weren’t yet lifting by enough.

The mid-year economic and fiscal outlook due within days would "clearly illustrate the full state of the books we have inherited". But it would not be used to unveil "a massive round of spending cuts,” other than those needed to pay for the extra $1.2 billion of spending on schools announced on Monday.

Questions of spending would be left to the May budget which would be drawn up after considering the report of the Commission of Audit due in January.

Even in the budget there might be fewer cuts than some have been expecting.  "We are not obsessed with cuts," the treasurer said.

"We've got to fill the hole. We've got to find ways to stimulate the non-mining side of the economy. That means re-tooling the nation. So much of what Tony Abbott and Warren Truss and myself are focused on is about how we can stimulate productive infrastructure investment."

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Senior public servant Tara McCarthy sacked for being a whistleblower, ICAC hears

The head of the NSW State Emergency Service, Murray Kear, sacked a whistleblower who raised concerns about the misuse of funds by one of his mates, a corruption inquiry has been told.

The Independent Commission Against Corruption heard on Tuesday that Mr Kear "allowed the importance of ... mateship to permeate the manner in which he administered a significant public entity".

Mr Kear sacked Deputy Commissioner Tara McCarthy in May after she initiated investigations into the use of SES funds by her fellow deputy, Steven Pearce.

The ICAC heard Mr Kear and Mr Pearce had known each other since at least 2006 and "the two men and their families holiday together".
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Counsel assisting the ICAC, Michael Fordham, SC, said Mr Kear faced a potential criminal charge if the inquiry found Ms McCarthy was "terminated as a reprisal" for investigating Mr Pearce.

Ms McCarthy was employed in November 2012 to review procurement contracts and deliver budget savings.

In his opening address, Mr Fordham said Ms McCarthy's moves to ensure "appropriate governance" relating to overtime, use of motor vehicles, parking and travel caused some "disquiet" in the SES ranks.

She had investigated the use by Mr Pearce of his corporate credit card to pay for roof-racks "to carry surfboards" on his SES vehicle and later to pay for electric brakes to be installed "for the towing of his camper trailer".

Mr Kear signed off on the installations on the basis the money was repaid 15 months and two years respectively after the events.

After further credit card statements were brought to Ms McCarthy, she engaged public service auditor IAB to do a "desktop audit", which uncovered potential irregularities totalling more than $11,000.

Ms McCarthy had also raised concerns about Mr Pearce approving $60,000 worth of overtime for one colleague, the private use of a company car by another, and entering into two consultancy agreements worth hundreds of thousands of dollars.

The inquiry heard Mr Pearce "provided badging and logos" so the contracts would look like SES documents. The contracts were later terminated.

"The 1902 short story about a cursed talisman that grants wishes, The Monkey's Paw, written by W.W. Jacobs, opens with the line: 'Be careful what you wish for, you may receive it'," Mr Fordham said.

"Commissioner Kear and the SES needed an efficient, process-driven person to guide the SES and improve its governance. That is exactly what it got in Ms McCarthy.

"Having got governance and accountability it began to interfere with what seems to have been regarded as an appropriate status quo."

Mr Fordham said Ms McCarthy saved the SES "significant amounts of money" during her tenure.

Despite the fact that there were "never any competence or performance issues" arising out of her employment, she was not given a chance to comment before she was sacked.

"It is telling that a cab had already been arranged to take Ms McCarthy home," Mr Fordham said.

"Commissioner Kear openly stated that one or both of his deputies had to go. He chose Tara McCarthy."

The inquiry heard that Mr Kear had made false statements to ICAC investigators.  He also failed to 'identify, acknowledge of appropriately manage the clear conflict of interest that arose out of his relationship" with Mr Pearce.

Mr Kear took leave earlier this year pending the outcome of the inquiry.

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CRICKET:

An unfortunate sense of humor

Many people find an Indian accent amusing and some are good at imitating it.  Jokes in public can be unwise, however.  Monty Panesar is actually England-born of Indian descent.  He is a Sikh



An Australian cricket announcer has been sacked on the spot after using an Indian accent to pronounce the name of Engand spinner Monty Panesar.

David Nixon was fired from his match-day duties by Cricket Australia after his announcement in England's tour match at Traeger Park.

He appeared to mock the cricketer, who plays for Essex, and was relieved of his duties after lunch on the second and final day.

There were reports that he used an Indian accent when announcing the name of England bowler Monty Panesar, but CA would not comment on the specifics of the dismissal.

But Nixon took to his Twitter account to explain that his 'style' did not work with the broadcaster.  He wrote: 'Really? I love Monty P - cult hero. He should bat 3. My style didn't fit theirs. That's all.'

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The announcer concerned was known for banter

Cricket Australia apologises for 'offensive' Monty Panesar tweet



I don't really see what's offensive.  Panesar is a Sikh and their turbans tell us that the guys in the picture are Sikhs.  And Indians are fonder of bright colours than Anglos are.  Why are we not allowed to mention that Panesar is a Sikh?  He even wears a Sikh head-covering while playing.  Sikhism is a religion, not a race

Cricket Australia has apologised for referencing England spinner Monty Panesar with a photo it tweeted of four bearded men wearing turbans.

CA posted the picture - taken from Instagram - on its official Twitter account late Thursday morning, day one of the second Ashes Test in Adelaide, with the caption: "Will the real Monty Panesar please stand up".

The men were dressed in bright purple, red, green and yellow clothes, depicting children's TV characters the Teletubbies and orginated from here.

The tweet sparked claims of racism and CA promptly deleted the post.  "We apologise for any offence caused by our earlier tweet. That was certainly not the intention. It has been removed," it wrote.

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