Corporate welfare and the fall of
South Australia's Premier

by Bob Briton

South Australians are used to seeing headlines about grants, loans and 
other inducements to big business to settle in the State. After all, it is 
only by these means that the struggling transnational corporations can be 
persuaded to choose South Australia over a whole planet of competitors and 
bring those jobs with them. That's what we are told, anyway.

For a long time the Adelaide Advertiser has carried stories about 
Mitsubishi's shaky commitment to the State and how the Government had given 
$20 million to the car manufacturing giant to stay. The Federal Government 
topped that with an incentive scheme worth $200 million over five years.

Wheel manufacturer Castalloy got an undisclosed amount to keep making 
wheels for Harley Davidson in Adelaide. Cake and pie manufacturer Balfour's 
were also kept afloat with a cash injection from the State. They have now 
moved to new premises and are even exporting to Singapore, thanks very 
much.

According to Parliamentary sources, Westpac got incentives to the value of 
$30 million to set up a call centre at Lockleys. This didn't stop them 
outsourcing the work to the Texas computer company EDS, however.

The latest is Exxon Mobil, the oil transnational with worldwide profits of 
US$17 billion. The State Government announced last week that it will spend 
$3 million on Exxon's behalf to fund emergency accommodation and community 
support, repair erosion at Witton Bluff and Port Noarlunga and other monies 
to develop the region around the Port Stanvac refinery for the company's 
benefit. As part of the bargain, the Onkaparinga Council will be 
compensated for cutting the refinery's annual rates by $700,000. The Labor 
Party is reported as "opposing" the measures, but won't vote against them!

The list of corporate welfare recipients goes on and on. On this background 
it is a little surprising that John Olsen felt obliged to resign as Premier 
recently because of the strong reaction to the release of the full story of 
a sweetheart deal with the US communications corporation, Motorola.

A 230-page report from an inquiry headed by Dean Clayton QC left the entire 
Government looking shame-faced. Clearly some code of honour had been 
broken.

The arrangement with Motorola provided that, in return for establishing 
their Australian Software Centre in Adelaide, the Government would give 
Motorola the contract to supply radio equipment for the State's SMCS 
(Shared Mobile Communications Service). The deal was valued at $247 
million.

For some reason, the Premier became defensive about this arrangement and 
even denied that Motorola was considering it. Correspondence from mid-1994 
went missing when required by an earlier inquiry into the "Motorola 
Affair". It seems that if you are going to distribute corporate welfare you 
have to be bold about it and not seek to hide the details.

It seems that John Olsen had to resign because he covered-up and told lies 
— not because of the obscenity of doling out huge amounts of taxpayers' 
money to the already rich TNCs.