The Goose who laid Federal’s golden egg

The article:
THE late Greg Farrell senior could not have known then, but when he and his then business partner, the late Gordon Barton, took over the Federal Group in 1969, he was getting more than Australia’s oldest hotel chain.

He was laying the groundwork for his five children to “own” an island — Tasmania to be precise.

A touch of hyperbole undoubtedly but the monopoly that the renamed Federal Hotels and Resorts — owned by the Farrell family through Mulawa Holdings — has over the state’s gaming industry, as well as being the biggest private sector employer. It is an influence that Greg Farrell junior, who lives in Sydney and is managing director of Mulawa, chooses not to discuss.

His media appearances over the company’s role in Tasmania are carefully stage-managed; on the public relations front, nothing is left to chance.

Typically only good news stories, such as the sponsorship of the Royal Launceston Show, get a hearing. But no-one should doubt the family’s sway in business and political circles in the state, or the money that gamblers (mostly) and tourists are making for them.

The family is on a winning streak that a pokie player can only dream of.

In the 12 months to June 30, 2005, Mulawa Holdings’ earnings were up 13 per cent to $32.7 million as a result of a 6.5 per cent increase inturnover to $395 million. On BRW’s calculations, the family’s wealth has jumped 24.7 per cent to $385 million. (Greg’s senior five children each own 20 per cent of Mulawa Holdings).

BRW lists Federals’ extensive Tasmanian holdings, from Cradle Mountain Lodge to Wrest Point Casino and quotes The Mercury as quoting Farrell: “Our vision is to become Australia’s defining five-star interpretive tourism development on a heritage site.”

Says BRW: Farrell has every chance of success; the Tasmanian Government will make sure of that.

Go to Federal Hotels’ and Pure Tasmania website and you find a warm welcome from the Premier of Tasmania, Paul Lennon, inviting you to “explore the Pure Tasmania website and to plan your next break in Tasmania.”

It is all very cosy. Lennon is a Labor Premier, but that did not stop him staying at the Country Club Resort in July 2004 while the Liquor, Hospitality and Miscellaneous Union (LHMU) was locked in an industrial dispute with Federal Hotels and was picketing the resort.

James Boyce’s analysis

Nearly two years later, the incident still rankles with the LHMU’s state secretary David O’Byrne. Choosing his words carefully, he says: “It was hard to explain to our members why a Labor Premier was staying there.”

But Lennon’s willingness to show solidarity with Federal Hotels, by ignoring a union or appearing on a company’s website, pale into insignificance when compared with the deal handed out to the Farrell family in 2003.

BRW then goes on to detail the deal on pokies Tasmanian Times readers would be very familiar with through the superb analysis of writer and social policy analyst James Boyce, starting here: Pokies: this is a scandal:

Says BRW: In that year, Federal Hotels’ 1993 agreement with the State Government granting it a 15 year monopoly over poker machine licences was to be reviewed.

The Bacon Labor Government not only renewed the agreement but extended it to 2018. The review took only six weeks.

The speed of the decision displayed little eregard for the social issues that are involved with this industry. It also showed how Tasmanian governments of all political persuasions feel so indebted to any serious investor that critical questions about probity are sometimes not asked.

BRW refers then to the failed 1989 Wesley Vale pulp mill bid, then reflects on the Tamar pulp mill bid, wryly observing that the independent Resource Planning and Development Commission (RPDC) to set environmental guideless should sideline the Government from the process.

But not in Tasmania … referring to the Pulp Mill Taskforce as open to accusations that it is little more than a propaganda unit.

BRW then lambasts the anaemic performance of the Parliamentary Standing Committee of Public Accounts into the pokies deal — again extensively detailed by James Boyce on Tasmanian Times: A mate’s deal: the cost of the Tasmanian Government’s special relationship with Federal Hotels

Comments BRW: Some of the exchanges between Farrell, the secretary of the Department of Treasury and Finance, Don Challen, and the committee were straight from Alice in Wonderland.

BRW says the roll over and have your tummy tickled performance of the committee “highlight the state’s supplicant mentality: Federal Hotels’ commitment to invest in Freycenit Lodge clinched the deal. The fact that Federal Hotles was investing in the project because it would be profitable — and should not be investing if it would not be — did not seem to dawn on the committee.

BRW quotes Bob Cheek’s Cheeky:Confessions of a Ferret Salesman “Farrell was so powerful he pulled off Tasmania’s deal of the century in the early 1990s when the then (Liberal) Premier Ray Groom caved into his threat to downsize his operations and granted Federl Hotels virutal control of Tasmania’s gaming operations: not only does Federal own the casinos, it also decides which other pubs and clubs can install gambling machines … a red-hot deal in anyone’s language.”

BRW concludes that successive governments have failed Tasmanians, ending with this quote from James Boyce on Tasmanian Times:

The Tasmanian Government has pulled off the worst of both worlds, a low tax return and little regulation. None of us knows how much money has been lost, how many urgent social, health, educational issues could have been addressed if standard government tendering guidelines had been followed.

Nor do any of us know how many human victims there have been from the proliferation of poker machines and how much harm could have been prevented with tough regulation, because the research has not been done.

And despite the one day of questioning, not even Mr Hidding nor any established Tasmanian media, newspaper, radio, television or inquiring individual members of the Fourth Estate, have shown any subsequent interest in finding out.

Mr Farrell, it seems, has just too many mates for that.

A mates’ deal: The cost of the Tasmanian Government’s special relationship with Federal Hotels