In 2013 – Federal Shadow MinisterMalcolm Turnbull says there would there would be no issues with holding the bonds if he became communications minister in a Coalition government’s cabinet. Source: News Limited
MILLIONAIRE Liberal frontbencher Malcolm Turnbull has an investment in a company that has received almost $2 billion in Federal Government contracts.
Mr Turnbull owns bonds in Defence Department contractor Praeco Pty Ltd, a consortium chosen by the Howard government seven years ago to build and maintain the Australian military’s central command headquarters for 30 years.
The secure site just outside Canberra has also been mooted as an alternative seat of government in the event of a national emergency and Parliament House becoming unavailable.
Tender notices show Praeco is contracted to the project for $1.54 billion but has also received another 30-odd contracts totalling almost $10 million to June last year for additional work on the command centre.
Mr Turnbull on Sunday said there would be no issues with holding the bonds if he became communications minister in a Coalition government’s cabinet which made decisions on Defence policy.
He said the bonds were declared at the time of purchase in March last year, the Commonwealth’s policy decisions relating to the project had already been made years earlier and the command centre contract was locked in and long-term.
However, he noted that the bonds could be disposed of easily if necessary.
“I cannot see what decisions a government could make which would affect the value of the bonds or what conflict therefore could arise,” he said, describing them as a “passive investment” with the bonds not repayable until 2020.
“But, in any event, there are well understood means of dealing with conflicts or potential conflicts and, of course, the most important factor is disclosure which has been done in accordance with the rules.”
The links to the government contractor have emerged amid tensions in Liberal ranks over Mr Turnbull’s recent public declaration he was more popular than Opposition Leader Tony Abbott.
In mid-2006, Praeco was chosen to build the $300 million headquarters under a public-private partnership deal.
Mr Turnbull was not a member of Cabinet at the time as he was a parliamentary secretary to then prime minister John Howard.
In March last year, Mr Turnbull declared on his pecuniary interests register “Praeco Pty Ltd bonds (M B Turnbull Pty Ltd)” but has declined to nominate their value.
FIIG Securities, which reportedly trades Praeco bonds to retail and commercial investors for at least $50,000 per bond, has previously said a bond from the vehicle offers a yield to maturity of more than 7 per cent.
A Defence spokesman said the extra contracts given to Praeco for the command centre related to “enabling utility services for the site and additional works since contract commencement, including internal fibre optic cabling, internal office reconfiguration, power upgrades, stationery, mail delivery, catering, site works, monuments and security works”.
Mr Turnbull, whose wealth has been estimated at almost $200 million, said he knew what Praeco was at the time of the purchase but did not see any issue with his parliamentary business.
“It’s all done and dealt with,” he said.
“It’s a totally passive investment. The price of this bond will really only fluctuate on its own.”