Negative Gearing Takes you Backwards

24 July 2009

The failed Managed Investment Schemes Timbercorp and Great Southern (ore MIS's as their spruikers call them) highlight one of the many anomalies within the English language. If the S in MIS was for Scheming as opposed to Scheme, I doubt these debt laden disasters would of ever got off (or is that out of) the ground.

Yet our regulatory bodies, particularly the Tax department (who have since washed their hands of this mess) somehow allowed this merry band of rip off merchants to prey on vulnerable mums and dads. Everyone was winning. The MIS's did not need to produce any cash for years as it takes so long for the trees to grow, so there were few pesky inquiries from investors, the financial planners received fat commissions and investors dodged tax.

It is so depressing seeing this whole mess now play out in our courts. As mum and dad investors put the hat around to fund the no doubt exurbanite legal costs to prevent a complete fire sale by creditors, our regulators simply watch on the sidelines, along with hapless rural communities. The regulators tell us that they cannot get involved with an individual investor's decisions, whilst towns such as Robinvale in Victoria are left with a greater number of jobless and the associated problems this brings.

Like cockroaches; when you kill one of these spruiksters they seem to reappear abusing some other loophole in the legal system or within English literature. Yet we can now belatedly update our language to associate the words Scheme, Scheming, Tax and Money with the phrase Run Far Away.