IF YOU ASK most Australians who delivers Australian aid overseas, they’ll most likely list big, well-known NGOs such as Oxfam, World Vision or Caritas.
Most would be surprised to know that for nearly a decade
We’ve studied the records of one of
The central question at the heart of this web of complex company structuring is this: such set-ups for tax minimisation purposes are common in international company business, but is it acceptable for major recipients of Australian government contracts to operate in this way?
GRM International handles hundreds of millions of dollars worth of government contracts each year. Yet, according to its most recent financial statements, it doesn’t make a profit and hasn’t had any employees since 2005.
It’s just one of many surprises and inconsistencies that surround the company, which was sold by the Packer family to some of the company’s directors, managers and business associates last December.
GRM secured more than a billion dollars worth of AusAID contracts between 2001 and 2010, as well as income from its agribusiness activities.
A large amount of this money has been for “technical assistance” in the form of short-term contracts for expert advisers. This form of aid is more common in Australia than in other OECD countries and has been criticised by a recent review of Australian aid to PNG as often ineffective, wasteful and lacking in accountability.
GRM’s highest-profile jobs have been for managing the
civilian end of the Australian-led Regional Assistance Mission to the
Even the deputy managing director of GRM International, Darryn Purdy, who until the sale was its Asia-Pacific regional director, said he had no idea why GRM had filed accounts listing zero profit.
“Maybe ASIC data is not up to date,” said Purdy, and then suggested Consolidated Press should explain the anomaly…
AusAID’s contracts are managed according to the Commonwealth Procurement Guidelines. For large contracts, AusAID says it requires contractors to provide information on their financial status, ultimate ownership and other related entities and the previous three years’ accounts. It hires accounting firms to assess these.
ACIJ asked AusAID when it was aware GRM International was owned by CPIH and if it was aware it was based in a tax haven and that it owned casinos. A spokesperson said: “AusAID has been aware for many years that Consolidated Press Holdings was GRM International’s ultimate owner.”
It did not respond to the question about the tax haven or the casinos other than to say: “AusAID has had no direct commercial relationship with CPH. AusAID’s contractual dealings have been with GRM International.” ACIJ has contacted AusAID to confirm that it was not aware of CPIH’s role but as yet has received no reply.
ACIJ also asked AusAID about the company records showing no employees, to which it replied: “AusAID has regular direct dealings with GRM personnel. How GRM reflects this in its reporting to ASIC is a matter for GRM and ASIC.”
* Wendy Bacon is the director of the Australian Centre for Independent Journalism and Flint Duxfield has just completed a postgraduate journalism course at UTS. This investigation was a joint project between ACIJ and Crikey.com. Link to the full Crikey story here.